Outsourcing Comes Full Circle & Rescues Economy?
The dollar’s been plunging in value. No big secret there. We Americans don’t feel it’s effects much in our day to day personal commerce, but that could change, with overseas goods like $19 Wal-Mart end tables or 100K+ luxury sedans skyrocketing in price.
For now however, the worth-less dollar is hurting our foreign trading partners, who can’t raise prices on an already pinched American consumer, and therefore have to accept what amounts to less purchasing power for their goods.
The one way the Chinese, the Japanese, the Europeans, and even the Russians (see the pending sale of the New Jersey Nets) can take advantage of our plummeting fiat currency is by using it to buy up goods, services, and properties here in America. Between the flame-out in property values and a stock market that’s far cheaper than it was 10 years ago, bargains can be had, as worth-less dollars can buy assets on the cheap.
So if the rest of the world wants a stronger US economy to help pull us all out of the global slump, they ought to take their stockpiles of dollars and build factories here, using what’s now cheap American labor, as folks will work for less and get paid in a currency they don’t realize is worth less as well.
Imagine the Chinese making durable goods for their own consumption overseas, overseas being here. Imagine foreign car companies building factories that build cars with, what is to them, cheap foreign labor. And that cheap foreign labor is us.
Economic karma. What goes around comes around. 25 years ago we began rejecting our own workers in exchange for the instant gratification of improved profit margins; margins that grew due to outsourced labor and manufacturing.
As a result, we ended up with our middle class on life support.
The irony is that if anyone, foreign or domestic, has the foresight and the boldness to act on this paradigm shift, we’re poised to become a low cost producer of goods.
Our penance and our deliverance, one and the same.
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