And, yes, if you look at the tags on your shirt and pants, your DVD and CD player, and most probably your TV set, it’s likely they have been made overseas. It’s one of the reasons that you can buy a shirt for $5, a CD player for under $100 and $200 will get you a really nice TV set.
But your much vaunted “collapse of US manufacturing” is probably news to GM and Ford, as well as the Japanese auto plants springing up like mushrooms after a rain in places like Tennessee.
And regarding the collapse of the service market: the Chinese still haven’t figured out how to serve me a meal made in Taiwan and delivered by a Korean direct from the Far East.
And that power plant in India I was referring to is not a hypothetical example. Yes, I suppose it could be built without American participation, but with the dominant US market share in power generation equipment and financing, it’s likely to involve us.
The decline of the British Empire was not the result of a “Great Depression” at the end of the 19th century. It is the almost inevitable result of the growth of other world powers, most prominently the US, with its larger population, land mass and natural resources. It was also the result of World War I, which cost old Europe not only a generation of young men but also its treasure. And, as the aftermath of WW I, the British, who were on the winning side, suffered a crisis of confidence. And without self-confidence, you cannot hold an empire. It is this lack of confidence among a minor, but growing segment of the American public, that is debilitating to the future of the country.
Finally, you are simply wrong about the British becoming “more imperialistic” (your exact words) in the late 19th century. The jewels in Britain’s imperial crown were India and North America, which it won well before that time. They lost – of course – the US (sometime in the 18th century if memory serves me) but continued their hold on Canada and India. Their African colonies were a sideshow. However, Africa was not a sideshow to Germany, which had only recently become a unified nation. The last Kaiser demanded his nation’s place in the sun, especially because of his relationship to the British royal family and the fact that it was a European great power. It’s one of the things that led to World War I.
Finally, with regard to Bill Gross. He is a fine fixed income manager, one of the best. Given the fact that we have had a bull market in bonds since about 1980, all bond managers have good track records, especially if compared to equity managers during the last 3 years. (Someone once said that you should never confuse brains and a bull market. How true.) However, like a Hollywood star, Bill has allowed his success go to his head. He will now share his opinions of the stock market, politics and the rise and fall of empires with anyone who will listen. I will let Bill manage some of my fixed income money, but I will take his pronouncements on areas in which he has not demonstrated his expertise with a large grain of salt.
Question: if interest rates, which are at 50 year lows, start to rise, how will Bill make money in bonds?
Love and peace.
If you told the U.S. economic leaders 100 years ago that less than 5% of the population would be involved in agriculture in the future, they would have predicted famine and economic collapse. Instead, through technology, that 5% not only meets most of the needs of our country, but feeds a good chunk of the rest of the world as well.
As far as the trade balance issue goes, if this is such a bid deal, I must be in terrible personal financial trouble. Ya' see, I shop at my local grocery store a couple of times a week for food. I give them currency for the food. I sell nothing to the grocery store. My trade imbalance with them is horrendous! I must file for bankruptcy tomorrow!
If I have to listen to one more doom-sayer predict the economic end of the U.S., I think I'll barf.
By the way, what was that Chinese-based fast food place I ate at last week? Oh, yeah, there are no Chinese based fast food restaurants. What about that great Mexican blockbuster movie? How about that Indian company producing the operating system that runs on over 90% of the world's computers?
I'm not saying that there aren't countries that do things better than us, but I am saying that the U.S. has an impressive track record in leading the world in innovation that keeps us a world leader. I would say that bio-tech, nano-tech, alternative fuels, exotic materials, and anything Dean Kaman is working on are potential earth shakers.
Let's hear it for continued American Hegemony!
The colonies in North America and India were acquired in an earlier episode of imperialism during the 1700s. For example, French Canada and Ohio were acquired by Britain in the French and Indian War. British control of India was solidified by Lord Clive's victory over the French at the Battle of Plassey, although it was a couple decades later that complete control moved from the East India Company to the Crown. Both of these are during the Seven Year's War, prior to the general conflagration of the Napoleonic Wars.
From the Napoleonic Wars until about 1870, Britain acquired few new possessions. For example, even though Britain defeated Chinese forces in the Opium Wars, she acquired trading rights and the port of Hong Kong, rather than acquiring full political control over larger parts of China. But after 1870, the "scramble for Africa" was on, and Britain was the most successful contender. This is the second episode of Imperialism, in which leading figures like Cecil Rhodes play their part.
Germany was contender, but not so successful. My recollection is that it was limited to Cameroun, SouthWest Africa (Namibia), and Tanganyika (part of Tanzania).
The British Empire did not disolve following WW I. It took WW II to enervate Britain to the point were it fell apart. In this respect it is similar to the experience of Spain and Portugal, who were a battleground during the Napoleonic Wars, and who lost their Latin American possessions to independence shortly thereafter.