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Author: Subject: Fear, Fear, Fear!!!
Terry28
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[*] posted on 3-8-2009 at 11:59 AM


Some interesting opinions, Rush would be proud of some of you...BUT, what the hell does this have to do with Baja?????



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[*] posted on 3-8-2009 at 12:20 PM


Quote:
Originally posted by morgaine7
Quote:
Originally posted by BajaGringo
My theory is that going to a global economy will level the playing field and wages/buying power will reach a global mean. Good news for third world nations and bad news for countries like the USA.

OK, got it, thanks. I haven't lived in the US since 1982, so I guess it escaped me that Americans were living significantly better than people of comparable socioeconomic levels in other countries. What I have noticed in the US is that cost of living has become very high, and that there's a tendency to take on more debt, which may have fired an illusion of greater purchasing power. I certainly don't doubt that will level off. I'm more skeptical about a "global mean" but will have to think about it.

Kate


When I said the standard of living of the average working joe in the USA was among the highest in the world, I only based that on the fact that I have seen up front and personal the comparison of how a teacher, plumber, doctor, secretary or factory worker earns and lives in many third world countries on the planet throughout Latin America and Asia. When compring those same professions in the USA the last several decades it becomes obvious the great disparity. I will never forget a surgeon I got to know in Argentina years ago. He invited me out for coffee and to take a spin in his new car. He had worked as a surgeon for 10 years, double shifts even several days a week and was finally able to buy the very first new car he had ever owned in his life. He was so proud of that fact and wanted to share the moment with me.

The car? It was a Fiat 600. For those of you not familiar with the Fiat line it was equivalent to the Yugo. But as far as he was concerned it was a Mercedes-Benz S Class. The surgeon lived in a very small and simple home out in the suburbs with his family and his wife would now have her own car, a fifteen year old Citroen that broke down on a regular basis. She was ecstatic and proud. They were actually a two car family - a rarity. Funny part of the story is that the good doctor hardly drove the car. He would take the bus or let his oldest son drive him to the hospital in the old Citroen. He didn't want to put too many miles on the new car and wear it out too fast.

Much of the world has lived this way and with this standard of living and many have lived much worse on average yet. Going to a global economy doesn't happen overnight. There is still a lot of ebb and flow to this model but I don't see any way possible that manufacturing will suddenly come back in any form to the US under the current wage/regulation climate that exists in the US. Why would business do it? They can build a factory in other parts of the planet at a fraction of the cost, with little or no regulation and cost of labor at a fraction of the cost when compared to the USA.

When the USA ceases to manufacture anything what will happen to the US economy? You cannot build a serious long term economic model all based on service and government jobs. Something has to be produced of value and in the quantities necessary to export and begin to pay off the incredibly huge debt we now carry.

I am still waiting for somebody, anybody to explain to me how going to a global economy will not drag us all down to a global standard of living.

I have posted this question here many times as well as on other forums. I have been called names, called un-American, an alarmist, fear monger and worse. But I still have yet to hear one person explain an economic model in a global economy where that is not true.

What does this have to do with Baja? Many of us here living in Baja are deeply affected by what happens to the US economy via business and retirement investments. The two economies are tied very close together and it only makes sense to me that we talk about such a subject here. If you only visit Baja from time to time, maybe not as much.

Rush? Who cares what he thinks? He is just an entertainer like all the other hacks out there trying to make a buck while stirring you up from their left/right slant. I stopped listening to him many years ago when I realized that was all he was.

Sorry if this thread topic / content upsets some of you...

:rolleyes: :rolleyes: :rolleyes:

[Edited on 3-8-2009 by BajaGringo]




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[*] posted on 3-8-2009 at 12:46 PM


Quote:
Originally posted by BajaGringo
I am still waiting for somebody, anybody to explain to me how going to a global economy will not drag us all down to a global standard of living.


We do not yet have a global economy like you are asking about. If we ever create a true global economy that has been levelized to a single standard of living, it will be a marxist utopia that has abolished the bad aspects of capitalist greed and it's disparities in income and standard of living (if leftist ideas prevail). Or it may be anarchy of small warring states (if conservative ideas prevail), where 99% of people live in poverty and 1% of people live in royal style, based on indentured servitude and slavery.
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[*] posted on 3-8-2009 at 12:51 PM


Bajagringo,
The reason I never answered to your Global standard of living question is that I thoroughly believe that you hit the nail on the head. It's inevitable. As soon as 3rd world countries have to crank up production to meet demand, labor issues will come into play, like they did in the USA and Europe in the early 20th century. The time of our (just for exemple) assembly line workers unreasonable wages are over forever, and they will ,in the not too far off future, glad to work for less then a quarter of what they earn now. If they have a job to go to, that is. Except for some high tech items, the Western world will not be able to compete. It will take some time, but rising incomes in Latin America and Asia will eventually equal or maybe even surpass ours. This is not a doomsday scenario, but a down to earth fact.
Better prepare your kids and grandkids.




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Barry A.
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[*] posted on 3-8-2009 at 12:54 PM


BajaGringo said------

"Rush? Who cares what he thinks? He is just an entertainer like all the other hacks out there trying to make a buck while stirring you up from their left/right slant. I stopped listening to him many years ago when I realized that was all he was."

Personally, I don't listen to him, haven't for years. But how can you just dismiss him when he has an audience of roughly 20 million, I believe? No matter how you feel about his content, he DOES matter, in my opinion.

My brother-in-law & sister, both definite Moderates, knows him personally-----both say he appears to be a very quiet, thoughful, and nice man.

On you Global standard of living model-----a very interesting idea, and I tend to think you are onto something. I have always looked at it from an "investment" perspective, and I like what I see. I am about 60% overseas in my investments at this time. Will my standard of living go down in the future, probably not, but I certainly see what you mean. I live very frugally now, so am not too worried, about THAT anyway. I did not own a "new car" until about 2 years ago (my Nissan X-terra) , and have only had one in my life. My 48 year old daughter, a CPA and teacher, has never owned a new car-----my son (a lawyer) 1 new car------my other 2 sons never had a new car----all live very well, by my standards. We are all Conservatives.

Barry
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[*] posted on 3-8-2009 at 01:09 PM


Alas BG I think that the lack of response is because you are right. I sometimes am wrong and at others wish someone would prove me wrong.

As China, India and Brazil rise, we fall, simple equation, in some ways a zero/sum game. It happened to England and it is now happening to us. In some ways for us it's a race to the bottom and amazingly in many cases supported by working people who oppose the wages and benefits paid to union workers.

Ronald Reagan's first act of office was to break the Air Traffic Controllers’ Union and then deregulate industry after industry. So we have been shooting ourselves in the foot for years on this issue.

How all this relates to Baja is that government is developed and maintained by people who are human beings and have a cultural, social, economic and political history that affects their choices and how they deal with the real politic of the day. It is said that those who do not learn from history are destined to repeat it. Remember the French in Viet Nam, the USofA in Viet Nam, the Russians in Afghanistan, the aftermath of the fall of Tito in Yugoslavia and the fall of Sadam Hussein in Iraq? There are dots to connect if one takes the time and it is possible to learn valuable lessons if one does one's homework.

I for instance don't believe that the Mexican populace will rise up against the Drug Oligarchy, but co-opt it as has been done historically with opposition groups in Mexico. The government will side with one of the combating sides and it will become their enterprise also. The Fox/Calderone governments are a new animal in Mexico as these men were USofA educated and bring Norte perspective to the issues they address. In the USofA with its "cowboy" history and mentality you find that the USofA frequently resorts to violence as a way to deal with social problems where Mexico tends to incorporate the "problem" element into the government. I think it is important to understand these differences. If it has "War on...." in its title, it probably was initiated in the USofA. If it has "ni modo" or something about a "tropicalized" agreeable (someone else will need to insert the proper Mexican term) in it then one could suspect Mexican etiology.


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[*] posted on 3-8-2009 at 01:22 PM


I agree with much of what both you Barry and vandenberg say.

Wages in third world countries will certainly rise as market forces set in. The problem is that we are starting from a point where the bar is set so very low. Any of you know how much factory workers earn in China on average today? The average US worker makes more just from the time they clock in until they actually sit down and start working.

I don't think it will take a Marxist state utopia mtgoat66 to make that happen. Market forces will take us there and I suspect that in general we will become a much more migratory society for awhile, people moving to where the new jobs are starting and to earn a buck or two more a day with some cheaper housing. When that local model adapts and changes business will move to another, cheaper region and labor will follow. Eventually the playing field will level off and we will reach a general, global standard of living. There will always be peaks and valleys, no possible way to avoid that I suppose and there will be some of the same old players, moving the real money and controlling what happens on this global economic model. They are the ones who are pushing us towards this model and I have a suspicion that some of them think they are doing it for humanitarian reasons. Someone earning less than a dollar a day currently in meager conditions would probably like that idea.

Is it fair? That answer changes based on your perspective and it doesn't really matter anyway. It is coming and like Barry and vandenberg say, we need to prepare ourselves and our families today.

I am doing just that. It isn't fear, just smart IMHO.

YMMV...




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[*] posted on 3-8-2009 at 01:26 PM


Great post Iflyfish. No argument here...



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[*] posted on 3-8-2009 at 02:40 PM


Barry, it's interesting that you invest more outside the US and also drive a foreign car. While China and others are buying up America, American's are buying up stock in other countries.

We add to their prosperity by investing elsewhere, that in turn benefits you and them. Do you think that overall, America benefits also? Do you really care as long as your income and portfolio prevails and makes you money?

Do you think that that has become a relevent part of connecting the global economic dots?

For the sake of argument et's say that a median global economy can be based on these facts and use it as a template. It makes the argument seem more plausible, but isn't that part of the conundrum?

We have opted to let others become the beasts of burden. Manufacturing and so many other out-sourced jobs have left us domestically incapable of competing in these arenas.

It's a capitalists' World we now live in.

But like you say, it's all about generating income so why wouldn't the bulk of knowledgeable investors/capitalists look elsewhere to emerging countries to make them bucks.

That may seem sweet and so easy to do but the shift has caused us to lose valuable ground maintaining our historical engineering and manufacturing prowess.

It may seem petty that that most all retail goods come from somewhere else but in reality it means that millions of blue collar jobs have sailed away in the meantime.

Of course this is old known factor. Putting your money on others because you believe in them is and has always been a gamble but hopefully one you based upon due diligence.

The stock market is a very slippery slope fueled by a daily barrage of negative media sensationalism and angst. It isn't at all shocking to watch it even though it's so significant.

If you play the global market you become an enabler, not only for that other country but also for the ones that seals your deals. It doesn't make you a bad guy just part of the global situation.

I can imagine someone well invested in China might be doing great. I saw their unemployment was around 5%. Something to think about when you want to compare apples and oranges.

When the day comes that we are at the mercy of the rest of the world to supply all our worldy possessions we will all belong to the same club, like it or not.

The question is, do you want to?:?:




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[*] posted on 3-8-2009 at 04:28 PM


I'm not afraid of crap anymore. It has been that way since 1985 during a split second change of life. That crap includes death, the economy, the Mexican cartel, person(s) or thing(s). And yes, that goes for the P-nche asteroid if it is hurtling toward us. This is not bravado speaking it is a fact. That is who I am. When the end comes I will be giving it the middle finger as that little mouse did when the hawk was swooping in to kill it and eat it.



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[*] posted on 3-8-2009 at 05:00 PM


Sharks--------all good questions, and points.

I have owned Chevys (3), AMC Rambler (1), Fords (2), Cryslers (1) , Dodges (1), and then I went to German cars (2), then to Japanese cars (3)----all but one used-----------I had/have good luck with all except the two German Cars, a used Mercedes 240-diesel, and a used Audi 5000 Turbo. Both cost me a small fortune to keep running, but they were fun. Never again, tho. I buy what is reported to be the "best" in that class-------lately that has been Japanese-----I still own 3: an Isuzu Trooper, a Toy Camry, and a Nissan X-terra. I also own a '94 Ford F-250 4x4. All 4 cars I still own are basically flawless, so I keep them.

4/5ths of my Stock investments are handled by 2 professional Managers, and they make all the selections. The remaining 1/5 I manage (mostly ROTH-IRA's) and they are all domestic. My "managers" think the best opportunities mostly lay overseas at this time----both totally restructured my portfolios to reflect that thinking last December.

Maintaining my portfolios for my children and grandchildren, etc. are paramount in my mind-----I want to take care of my family first, then me, then my Country. I suppose that is selfish of me, but I honestly think that is my main responsibility.

I am a "free trader", and a "globalist", and believe it is inevitable-----------but I expect everybody to "compete" for my investments. The USA has done that well over the years, but they are now failing to keep up, for a variety of reasons, some not necessarily of their own making.

I try to consider all the impacts of what I am doing, but mostly I am "potential-profit" motivated-----I feel that is my responsibility as "caretaker" of a portion of the "families" investments, and I owe it to the rest of the family.

I hope that covers most of your questions. You make some very good points, and I do think about the things you say, and I thank you for saying them.

Barry A.
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[*] posted on 3-8-2009 at 05:04 PM


Jesse I feel it dude. I stopped the gringo NEWS 6 mos. ago and as of 4 weeks ago I stopped my Mexican cable for the same reason. I can get my a.p. news on the net, movies at the tiagis and rent from el norte. Lifes good!!!!
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[*] posted on 3-8-2009 at 05:58 PM


In a true, free capitalism model, market forces will prevail. Borders and national allegiances will become eventual victims in that model and to call someone out because they don't buy a national product which may be inferior in quality and/or price is to hinder a true free market.

Did any of you here really believe that the USA would be able to live in a bubble forever with substantially higher wages, real estate values and standard of living compared to the majority of the people living outside her borders on this planet? Even if you tried to protect that model with protective tariffs, border walls and military action, the global economy will eventualy bring it down.

I am convinced that most of the leading business and political figures in the USA have understood this coming reality for a long time. I suspect that nobody wants to be the one to give the patient the bitter medicine of what lies ahead...




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[*] posted on 3-8-2009 at 11:43 PM


Kate says volumes. In the USA, expectations have been thoroughly hyped by marketers, i.e. advertisers. So much of the revenue changing hands has been, for year, on behalf of crap that is unnecessary. Think of things like bluetooths, I-phones, viagra. People go into debt to obtain unnecessary crap.
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[*] posted on 3-9-2009 at 06:36 AM


Quote:
Originally posted by Bajahowodd
Kate says volumes. In the USA, expectations have been thoroughly hyped by marketers, i.e. advertisers. So much of the revenue changing hands has been, for year, on behalf of crap that is unnecessary. Think of things like bluetooths, I-phones, viagra. People go into debt to obtain unnecessary crap.


yup...people work all of their lives just to have the $$$ to buy things they do not need. the people that will have the hardest time adjusting are those that over-consume.

we don't own stuff...stuff owns us!




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[*] posted on 3-9-2009 at 07:59 AM


People... there is such a thing as 'personal responsibility'! Blaming 'marketing' for people spending beyond their means?

People need to get some control over their own lives... and not blame cool ads or whatever for them buying stuff on credit they don't really need or can't pay back.... right?

I mean all we really need is 'Peace, Love, and Fish Tacos'... right???:biggrin:

[Edited on 3-9-2009 by David K]




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[*] posted on 3-9-2009 at 08:12 AM


Quote:
Originally posted by David K


I mean all we really need is 'Peace, Love, and Fish Tacos'... right???:biggrin:

[Edited on 3-9-2009 by David K]


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[*] posted on 3-9-2009 at 09:02 AM


Living beyond their means is something that the USA has been guilty of and is now paying the price for. The US government has been one of the worst offenders and that blame is shared equally by both political parties.

The ones who will survive the coming storm best are those who learn to "downsize" their spending habits / lifestyle. The problem is that is the very thing that kept the US economy moving. Quite a catch 22...




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[*] posted on 3-9-2009 at 09:19 AM


Quote:
Originally posted by BajaGringo
Living beyond their means is something that the USA has been guilty of and is now paying the price for. The US government has been one of the worst offenders and that blame is shared equally by both political parties.

The ones who will survive the coming storm best are those who learn to "downsize" their spending habits / lifestyle. The problem is that is the very thing that kept the US economy moving. Quite a catch 22...


I believe your correct, on both counts. I also believe that the sooner we face the pain, the sooner we will work our way thru it--------Warren Buffett says 5 years before the economy is pumping along again (???).

Most of the bail-out's now being provided will just prolong the pain, IMO. Big "adjustments" coming, like BG says. But keep in mind that their billions of folks out there that still are way behind in Standard of Living, and they will be buying for a long time, barring a catastrophy.

We'll survive, but just not in "present form".

Barry
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[*] posted on 3-9-2009 at 10:28 AM


That is correct Barry. This is not the end.

Just the end to the way we know things now...




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