The first Chinese Vehicles are to hit the US showrooms in 2008, but wait now both DaimlerChrysler and BMW are suing, because they say that their cars are copies – but of course they are. Why wouldn’t they be China copies everything and steals proprietary designs, patents and displays an unending thirst for corporate espionage, with some 6,000 spies in the United States alone. German Chancellor spoke out stating that copyright infringement and plagiarism are also huge issues with Beijing. Toyota is also upset as the Chinese have copied their Rav4 model as well.
How can we have free-trade without fair trade, I 420 Culture can hear Lou Dobbs now. Yes, I know China is growing into their new shoes, but they are growing fast and lax on controls. The Chinese Stock market just passed the Nikki even as the Nikki climbs back again. Chinese stocks are still trading above 50-67 times earnings on average, as the US stock markets trade at about 15-17 times earnings. The Chinese Stock market is in a precarious place and the last re-adjustment saw 25% loss in under a month.
Still China’s middle class is emerging and wages are rising [about 15% NYT reports in some areas], which might slow down trade deficits and increase US products as much of what is sold here is made in China. It will also assist in helping other nations with lower wages emerge as well. China will have to deal with their inflation and they have another problem, not enough people to work in all the areas.
What if the US Middle Class stops all the purchases of all these Chinese products? Not likely you say – maybe not, but there are changes in the US also, as the US is seeing credit tightening, we also see credit card late payments rise. Good for credit card companies so they can raise rates to consumers to 2 times usury laws maximums, but it shows that the game is over for many of those living on credit and failing to produce anything. The perceived entitlement is coming to a head. Credit Card late pays are up four percent in the last 6 months.
If the United States Middle Class feels poor and hits a credit max you can bet it will affect their buying behavior. After all, Consumer Confidence is down to the lowest point since July 2006. Credit crunch in subprime lending, stock market wobbles, and housing is causing it. It is definitely showing in retail sales. There are some issues in many sectors with employment as well. Wal-Marts sales are down somewhat and their sales in Mexico are down considerably. Of course World Economics also affect US economics, it is a small World and it is all connected now.
Indeed, economists note also that the War in Iraq is costing a chunk of change and the Middle East is in limbo with Mushareef losing his power and control and the new President in Turkey who is starting off on shaky ground, their military not amused and stated it will protect secularism. The new President is a devout Muslim and won by a considerable margin of parliamentary votes 339 of 550.
Luckily, in the US, poverty is down to 12.3% from 12.6% and still many complain that 47 million people do not have health care insurance. If we were to lower the poverty threshold by a couple of thousand dollars per year that number would dive drastically or it could increase with layoffs and US economic slow down. Citizens are not the only ones looking for more cash; the ACLU has taken to the streets to raise money in major liberal areas such as San Francisco, Westside Los Angeles, Boston and New York. Many of the workers are asking for donations and securing on average $300 per day. Not bad for begging?
Why should anyone in the US have to beg anyway? If people go into foreclosure due to bad choices in credit, or corporations lose for making risky loans why should the FED them all out? Can the FED slow down the water fall of an incoming business cycle? Who knows can China shore up their issues and growing pains? They need more infrastructure, but it would take the entire world’s GDP to fund all the infrastructure they need and repair their mistakes.
What about damming up the water along with the inflation fears – three Gorges Dam in China is causing worry at the Online Think Tank and we believe that a complete collapse is possible and if it goes will cause havoc and flooding for a 100s of miles. I guess they will need more engineers, scientists and smart graduates to help. Of course, the US needs more of those types too and haven’t you heard? SAT scores are down slightly, no one knows why, but the Online Think Tank thinks it is obvious.