Large Scale Central

GE to sell 101 year old appliance business

General Discussion
#21
Ken Brunt said:
Labor's cheaper overseas, but lately transportation costs have made it cheaper to make here. Trade deficit's aren't always a bad thing. It means we consume a lot of stuff.........
Hi Ken, ken try to look at it this way, the trade deficit is the amount of money which walks out the door never to come back. It means that we drain the money (gold reserves) we have here in the USA, and it creates inflation. If we drain that high amount for years and years, there will be a day where the US $ is not backed, we will be like a third world country. Thinking even further in to the future, the US $ might not be anymore the currency to determent oil Price. If things like that change, the downward spiral will go even faster and faster. It is the job of our government to balance the trade, i see it like my employees do not a great job, or with other words not a job in the interest of the average citizen.

Think global Pius

#22

To complicated for me to explain simply so :

http://www.ibdeditorials.com/IBDArticles.aspx?id=278028687267492&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=156356&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=156849&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=155722&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=267058785139593&kw=trade%20deficits

You guys listen to the MSM too much…:wink:

#23

Sorry,
These are opinions I do not agree with.
“Analysis show that foreigners now hold roughly $12.5 trillion in U.S. assets - a 190% rise from just 10 years ago.”
You can put any kind of spin on this you like, but I do not think this is a good thing.
And I just can’t get that warm and cozy feeling about the trade deficit being 472 billion for 8 months.
This doesn’t include the billions we borrow from foreign sources.
All that cash is coming back into the country. We don’t produce enough for them to spend it on. So they are buying our assets.
The money started here. We buy the foreigner’s merchandise(oil,clothes etc.). The foreigners buy our land and business.
To say this brings more money in is Voodoo Economics to say the least. The money STARTED HERE. WE sent it all out for oil and merchandise we could have made.
We are paying it back with our assets.
Ralph

#24
Ken Brunt said:
To complicated for me to explain simply so :

http://www.ibdeditorials.com/IBDArticles.aspx?id=278028687267492&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=156356&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=156849&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=155722&kw=trade%20deficits

http://www.ibdeditorials.com/IBDArticles.aspx?id=267058785139593&kw=trade%20deficits

You guys listen to the MSM too much…:wink:

#25

Hey Ken,
easy to read papers because there are lovely news, and it might be the future, but maybe not. If it would be that easy to predict the economy, we all would be filthy rich, but we are not. It is a fact that my 401K lost last year, and why do you think that happen, because it is so easy to predict the economy. right now we have so many folks which can’t hold their homes, why do you think we are confronted with this problem, because it was so easy to predict where the economy goes.
what i do miss in your papers are things like the fact that we spend lots lots and lots of money for this ongoing war, what influence does that have on our economy. Having a big trade deficit means that we help others to strengthen their economy, changing the influence of other countries. How ever you turn it, there are to many loose ends, things which no one can predict.
we all know how sensitive the economy is, don’t we all remember the stock crash, yeah i here you, that was then, today everything is better. I belief that to many cooks destroy a meal, to many players may just have a inversed effect. and going for global economy is just the same game, to many cooks.
how ever it was nice to read the papers you linked, sometimes it is great to have a positive outlook on things.

think global Pius

think global Pius

#26

I’m not putting a spin on any thing. I’m just showing how a professional investment magazine that millions of investors read reports it. I don’t think they have much to gain if they didn’t tell investors the truth. They wouldn’t be in business long.

The land is here, they can’t take it anywhere. The businesses must be doing good or they wouldn’t invest in them. They’re investing their money in this country. They must see something they like. Investors don’t pour money into declining assets. I know I don’t.

Does that analysis show what percentage of our assets that 12.5 trillion is? I’ll bet it’s a very small percentage. Or what the total growth in assets were in that 10 years? I’d say a lot more than that %190. Or what the breakdown is of those assets?

The words “trade deficit” doesn’t give me a warm and fuzzy feeling either, but there’s a lot more to it that just the words.

So your answer is too keep the money in this country? No more TV’s, No more radio’s, less choices for personal vehicles, no more construction and a host of other things? Sure we could have made it here, but the fact is it would cost us more to buy it and we’d buy less.

The world’s shrinking…

PJ
Sorry about your 401k…mine made money.

#27

Ken,
It is simple. Spend more than you make and you will eventually go bankrupt.
For years the dollar was strong. It was used as a global currency and held by foreigners as an investment.
We got away with the trade and budget deficits for years because the money was circulating abroad.
Now the dollar has tanked and nobody wants it. The US is the only place they can spend it.
So the money from all these years of deficits is pouring back into the country at rates faster than we can absorb . They are buying our assets.
And the “deficit” dollars are pouring into the commodities markets. The reason our energy and food costs are climbing so fast.
You can believe the “spin doctors” if you chose. I know better.
Ralph

#28
Ken Brunt said:
I'm not putting a spin on any thing. I'm just showing how a professional investment magazine that millions of investors read reports it. I don't think they have much to gain if they didn't tell investors the truth. They wouldn't be in business long.
Ken, These magazines "sell" investments. They do the PR work for the investment community. Investing is no different than gambling. For every winner, you have a loser. When we were the industrial powerhouse and had trade surpluses we were buying foreign companies and land. Doesn't that tell you something? Ralph
#29

I guess we’ll just agree to disagree.

#30
Ken Brunt said:
I guess we'll just agree to disagree.
I guess that's all we can do Ken. Ralph
#31

I’m no economist, but there are things about cost I don’t get. Is it really cheaper to make someting in china and ship it here? I’m not sure

There’s a company called Englehardt, in Indiana, that makes band and orchestra instruments. They make a range of upright basses. They ake them all in the US, and the cheaper ones sell for under 1000 bucks, which is really cheap for an upright bass. I played ne for years–rugged, reliable, tough, sounded good. Paid for itself many times over. Student bands all over the country have englehardts- Rockabilly bands, swing bands–they are as common as mud and clearly competing with China even though they are all made in the US.

In th same world, there’s Fender musical instruments–a classic American success story, founded by a guy with a great idea. Fender makes a lot of giutars and basses, but most of them are made in Mexico or east asia. Why? labor costs, they say. Except Fender, like most American companies, is constantly buying up other companies and expending its product line. They bought a drum company, a keyboard company, a bunch of other guitar companies, a couple of different amp makers. So whose labor is too expensive–the guy on the production line, or the ten levels of management needed to manage the acquisition team? How does Englhardt manage to make an competitive product while Fender can’t?

it seems like the first move is always blame the guy on the line–he wants too much. When they say American labor is too expensive, how come they never seem to mean the salaries of management? CEO Pay? How much of “labor costs” is the demand for expansion in order to satisfy shareholders who want quick gains?

#32

Mike,
It is always easy to blame the lowest on the totem pole.
In 1968 my Dad bought a new Pontiac Catalina for less than $2000. It was $1800 plus tag,title and license. Auto workers were making around $10 per hour.
Today the equivalent car is more than $20,000, probably $30,000.
Workers today are not making $100 an hour plus on the assembly line. And in 1968 the workers had better benefits than they do now after all the “give back” years.
Ralph

#33
Ralph Berg said:
Ken Brunt said:
I guess we'll just agree to disagree.
I guess that's all we can do Ken. Ralph
Ken, We can call each other names and talk about removing body parts from body cavities.:lol: Ralph
#34

Nah, sounds too painful to me…besides I like a friendly discussion better than an antagonistic one…but I’m still weighing your opinion against theirs, and theirs does make more sense to me.

#35
Ken Brunt said:
Nah, sounds too painful to me...........besides I like a friendly discussion better than an antagonistic one.........but I'm still weighing your opinion against theirs, and theirs does make more sense to me.
I'm happy you did give some consideration to what I said. I can't ask for more than that. If nothing else we both got to exercise the brain a bit. Ralph
#36
Ken Brunt said:
I'm not putting a spin on any thing. I'm just showing how a professional investment magazine that millions of investors read reports it. I don't think they have much to gain if they didn't tell investors the truth. They wouldn't be in business long.

The land is here, they can’t take it anywhere. The businesses must be doing good or they wouldn’t invest in them. They’re investing their money in this country. They must see something they like. Investors don’t pour money into declining assets. I know I don’t.

Does that analysis show what percentage of our assets that 12.5 trillion is? I’ll bet it’s a very small percentage. Or what the total growth in assets were in that 10 years? I’d say a lot more than that %190. Or what the breakdown is of those assets?

The words “trade deficit” doesn’t give me a warm and fuzzy feeling either, but there’s a lot more to it that just the words.

So your answer is too keep the money in this country? No more TV’s, No more radio’s, less choices for personal vehicles, no more construction and a host of other things? Sure we could have made it here, but the fact is it would cost us more to buy it and we’d buy less.

The world’s shrinking…

PJ
Sorry about your 401k…mine made money.


Hey Ken,
here a different way to roll up the problem. In my home, if i pickup anything to 90% it is always made in china, made in Korea, made in Taiwan, made in ect ect. look at the cars driving on our streets, what amount are made in the USA. Be aware, even if it is a US car like mine, the engine might be made in Japan.
I own a machine shop with tons of gadgets, here again, what ever i take in my hands is made somewhere, but not in the US. here my question, where is the stuff we produce here in the USA?

Think Global Pius

#37

This is from rense.com and was posted in 2002 on a story about the pending implosion of the US dollar.

“Thus the USA has been able to run a trade deficit for years and pay for it in US dollars. It doesn’t take a rocket scientist to figure out that this trend is unsustainable. At some point foreigners will either lose confidence in the US dollar or be unhappy to purchase US assets with the surplus US dollars that they accumulate or, worse still, both. At this point there will be an implosion in the US dollar, the mechanics of which are explained later.”

The foreigners have lost confidence in the US dollar. At this point, they are still purchasing our assets.
Ralph

#38

Sounds Logical Ralph if the shrinking dollar value was related to the foreign confidence, but it’s not. The gov’t has devalued the dollar in order to shrink the trade deficit and that doesn’t work either because Jimmy Carter tried the same tactic in the 70’s and look what that brought us. Foreign investors haven’t lost too much confidence in us if they continue to invest the money here.(which is what I think you mean by "purchasing our assets?) Our economy has been booming for the last 20 years. Why wouldn’t they invest it here. Europe’s economy has been stagnent. What other country has as dynamic an economy as we do? Where else would they invest that money? I mean it’s not as if the money was shoveled out the door, never to be seen again. It comes back as Capitol, so businesses can expand and grow.

So now my question is this? How do we reduce the trade deficit? By not buying as much as we did before or as often. Like you said there’s a lot of stuff not made in the US any more, but a lot of it’s made by overseas workers for American Co’s. So who do we buy this stuff from? And who created the technology so they could make it? China? Korea? Who buys the stuff you make in your machine shop? Look at the housing market the last ten years. Those people had to have been making a living doing something in order to buy a house. I worked for Verizon for 36 years. Look at all the companies they bought out in the last 10 years. Another thing to remember is where does our oil come from? Less than %6 comes from this country. The rest we buy from overseas. We consume 8 billion barrels a day. At $100-140 a barrel that adds up. Do you think those middle eastern oil shieks are investing that money in middle eastern companies? They’d like a good return on their money too.

I haven’t heard any good ways to reduce the trade deficit other than what amounts to 'Isolationism". and you can see where that got us.The only people worried about it are politicians because it makes a good sound byte and it sounds bad in their gloom and doom speeches. I haven’t heard of any good ways from Capitol Hill on how to do it, Have you?

#39

Just ask any foreigner if they still have confidence in the US dollar.
Yes, the economy was growing…on borrowed money.
The money coming back now purchasing our assets is not a good thing. It boosts the economy in the short term, because John Q Investor now has cash instead of 10,000 shares of XYZ.
But John Q Investor’s cash value is rapidly shrinking and he owns NOTHING.
It is no different than you or I borrowing enough money every year to live high on the hog. Eventually when we can’t make the payments we have to start selling our assets. If we still make payments after selling everything, we have cash left to live high on the hog…for a while.
Soon enough we can’t make the payments and have nothing left to sell.
Those same economic experts are the ones who got us in this mess. They are not going to admit they were wrong. That’s why things will get much worse. They will sink with the ship rather than admit they were wrong.
I have grown men telling me the answer to our financial problems is to continue buying more than we sell and that is a good thing.
It is no different for nations than it is for individuals. Spending more than you make leads to financial disaster. This is basic economics.
Ralph

#40

Ralph, the money coming back in is the money we spent on “stuff” we bought from outside the US. It’s not 'Borrowed", it’s invested in our businesses. It’s like buying a house. The money goes out, but it becomes an asset to us. It makes more money in the long run. Granted we spend a lot to keep it up, but that’s our choice.If I did absolutely nothing to improve it would still be worth more than when I bought it. If I 'improved" it and made it into an apartment, it would make even more eventually. You keep saying the money goes out and doesn’t come back. It does come back. As an Investment. It isn’t coming back as something tangible like a TV, but it’s still comes back here. What difference does it make if they only buy part of a business with so many shares of stock or the whole thing. They didn’t buy it to loose money on it. It’s not going to disappear. It’s still here. It has a different owner. He’s not going to tear it down and take it with him back to whatever country he lives in. He going to employ the same people who have been making money on his investment so he does make money on it. It’s been happening since man invented money. The trade deficit measures the the amount of TV’s coming into this country against the amount going out. Sure we have a deficit, we don’t make TV’s anymore. But I and a lot of other Americans have stock in the companies that do. We’re not spending more than we’re bringing in. The money comes back in as an investment.