High Prices and Chinese Manufacturing

[stinkmeaner]

Forgive me if this post is long and gets a little off topic but I wanted to get this off my chest and most of my friends are morons.
I wanted to start this thread to give people a place to discuss pricing and overseas manufacturing, I feel obligated because I am the one who started the interrogation on pricing and outsourcing in some other threads and I feel like a created a beast. I feel we made our point over there and over here we can discuss in great detail without offending members and taking a thread off topic, feel free to discuss any pricing and outsourcing from any country.

I have a simple little theory on why many goods are becoming so expensive in the USA, I think it comes down to greed in many ways and I feel it is not all our fault.
The reason it is not our fault is because society molded us that way, our country molded us that way, based on our countries belief of debt and overspending we as Americans naturally think it is normal while many foreign countries look upon us with discontent.

Our nation has slowly became greedier over the years which in turn leads to higher prices, inflation, higher debt, and outsourcing. Many manufacturers feel they need to get rich from every unit they sell based on some belief that because they start a business they are now the boss and entitled to extra money. You can't really blame them, like I said before 'our country encourages this', just look at how in debt our country is and it is no surprise why average Americans are in debt and we have the highest margin between rich and poor out of any other country. Our country even encourages us to spend when we are in a recession, to get out of a recession no less.

We have media and reality TV shows that worship the rich and famous, hell the rich get famous just because they are rich, I am not saying that hasn't happened in the past because it has, but not with TV & internet it has grown out of control. Kids don't even idolize people with talent, now they are brought up with people like Paris Hilton. How does all this relate to the topic you ask? Well it doesn't really but I needed to get it off my chest, Well it does a little, high prices can sometimes relate to how the owners want to live and how they want to live is like the rich they see on TV, so there debt and spending is out of control and the prices reflect. Sure everyone wants nice things but that doesn't mean it is okay to price garage made soldering irons at $300.

Many people complain goods can't be made in the USA anymore, they claim they NEED to send manufacturing overseas, well I got news for these people; a business is not started overnight and you don't need to double or triple your money from every product, do you really think China is tripling cost on products? I assure you their not, instead they deal in bulk and make a small mark up on each unit.
How would we not be able to make products in the USA, I already stated earlier that we have the highest margin between rich and poor, which in turn makes our minimum wage low so they can't say that workers cost too much to employ because there are plenty of unemployed and statistics prove you don't have to pay them much. For instance, Florida minimum wage is $7.25/hr and obviously building vaporizers with the components of a soldering iron is exactly not rocket science, so out of all the unemployed it shouldn't be too hard to find workers.

As for building space, well the US property prices are far from the highest in the world, Germany & Japan both have some of the highest living cost & property prices but they still manage to sustain a manufacturing industry. Everyone has a cheaper part of town with space they can lease, however you might not even have to do that to start or at all, some of these vaporizers are so simple that they can be made at home if you have a shed or garage since it is mostly putting together pre-manufactured components anyway. I think you would be surprised on how many vaporizer companies actually make the vapes in a home workshop or at least started the business at home.

All in all most Americans are going soft and actually believe this propaganda, they actually believe products NEED to be made in China, as if there is no other way. Some I have seen come on this board actually defending this ideal which is ludicrous, do they not realize that a strong manufacturing sector is the backbone of an economy, not services which can nearly bankrupt or disappear overnight as proven with big companies like AIG and Lehman Brothers.

Thanks for listening and feel free to rebuttal or debate.

 

[toxicc]

I agree on all this.

 

[Progress]

Very nice read, stinkmeaner.

The outsourcing trend also speaks to larger global/economic issues (like people recognizing and accepting the existence of would powers along side of third world countries, billionaires along side of the starving and shelterless, etc.).

I am glad I finally scored some free time to browse and contribute (it feels like it has been a while).

Who would have thought that vaporizers would be so intimately entangled in global political/economic issues and so representative of the problematic nature of our societal difficulty recognizing the symbiotic nature of the world in which we live (and conversely the destructive nature of greed and competition diminishing altruistic efforts).

However, I still think that you could 'stink meaner' if you tried harder (or showered less). Just kidding (I am sure that there is a story behind the name--there is obviously a brain and heart behind it).

 

[aesthyrian]

It's just capitalism without regulation. Dumbest idea ever.

 

[lwien]

The way I see it, this recession, as bad as it is, is necessary. Things have a funny way of balancing themselves out and if it takes a catalyst like a recession to get the pendulum to be begin swinging in the other direction, than that's what will happen. Nothing like another country threatening our economic dominance as well as our stagnant unemployment numbers to help get us to the necessary WTF moments.

That greed that you speak of is a form of self-cannibalism and when one finally realizes that, a lightbulb will eventually go off.

 

[stinkmeaner]

Very nice read, stinkmeaner.

The outsourcing trend also speaks to larger global/economic issues (like people recognizing and accepting the existence of would powers along side of third world countries, billionaires along side of the starving and shelterless, etc.).

I couldn't agree more, the US Government and most of its brainwashed citizens are oblivious to the fact that other Countries are gaining power, they have to realize we are not in the 50's anymore and other people are gaining political and economic power, but with this is military power and our government thinks everything is a threat and the media feeds our citizens to much propaganda so that we blindly follow that logic. Europe has became more united over the years and has not just caught up but surpassed us in many areas, like transportation for one, when is the US going to get public transportation that people actually WANT to use.

The way I see it, this recession, as bad as it is, is necessary. Things have a funny way of balancing themselves out and if it takes a catalyst like a recession to get the pendulum to be begin swinging in the other direction, than that's what will happen. Nothing like another country threatening our economic dominance as well as our stagnant unemployment numbers to help get us to the necessary WTF moments.

That greed that you speak of is a form of self-cannibalism and when one finally realizes that, a lightbulb will eventually go off.

Yes I also think that these recessions are necessary, the housing market became so expensive that the average person could not afford a house.
I wish people were more proactive but instead the younger generation has become so passive, back in the 60' people would have rioted in the streets over what our government is doing today, just like in France over this retirement issue.

I just wish I could see into the future to see what China will be like in 20-30 years, they seem like they are just on the cusp of what they can accomplish economically.

 

[lwien]

I just wish I could see into the future to see what China will be like in 20-30 years, they seem like they are just on the cusp of what they can accomplish economically.

Such a strange hybrid, eh? Who ever would have thunk that Communisim and capitalisim could live side by side. They have a lot of social issues that they need to address, but they have one major advantage in how they accomplish things over the way we TRY to accomplish things. When they want to change something, it can literally happen overnight whereas with us, we will debate and argue endlessly in the political arenas of the Senate and Congress, and shit can take forever to get resolved. Their ability to react quickly to economic issues gives them a HUGE advantage.

 

[OO]

greed results in alot of jobs being sent offshore, that is true.
oftentimes though, all your competitors have done the same and many feel that the only way to remain competitive is to do the same, we know that isn't true though, look at things like the volcano, super expensive, and still successful. probably due to marketing through the correct channels.

what many small businesses would like to see is the abolishment of minimum wage, because that way production costs would go down, and jobs wouldn't need to be sent to china when people are doing them here for so little.

you could say that minimum wages drive up inflation, and you wouldn't be far from the truth.


as for spending money to get the economy working, that makes sense to me, because the economy is the buying and selling of goods, and if noone is buying, than you have a dead economy no?

 

[OO]

I just wish I could see into the future to see what China will be like in 20-30 years, they seem like they are just on the cusp of what they can accomplish economically.

Such a strange hybrid, eh? Who ever would have thunk that Communisim and capitalisim could live side by side. They have a lot of social issues that they need to address, but they have one major advantage in how they accomplish things over the way we TRY to accomplish things. When they want to change something, it can literally happen overnight whereas with us, we will debate and argue endlessly in the political arenas of the Senate and Congress, and shit can take forever to get resolved. Their ability to react quickly to economic issues gives them a HUGE advantage.

american's are such a diverse group, that many have vastly opposing beliefs.

that's one reason why we have so much resistance to change.

if you have a nation in which the vast majority shares a similar belief structure, than you can impose radical changes overnight.

but i like this nation's diversity.

 

[crawdad]

a bit on topic to this is a documentary film call "Manufactured Landscapes" and i suggest getting a good quality version and watching it full screen, some of the scenes are stunning.

http://www.zeitgeistfilms.com/film.php?directoryname=manufacturedlandscapes

 

[bcleez]

I would just like to add a few points on the devils advocate side... that not only does it cost more for the American Worker hourly, but the corporate tax rate is also higher, If the money from over seas never comes back to the USA, it is never taxed. The USA also requires workers compensation insurance, breaks and lunch for workers. Most manufacturing jobs unionize and cost even more money. American Labor is quite expensive.

However, not that it helps the worker much, I believe that we are in a time period that is transitioning to cheap automated manufacturing. When the price of robots/machines comes down, more and more manufacturing will come back to the USA but not in actual workers, but robo-production lines.

Plus, outsourcing is a very easy way to help prop up foreign governments and nation build. It makes it so the government is not subsidizing all of the growth with straight up checks, let the people work for it and build their economy.

 

[2clicker]

I believe that we are in a time period that is transitioning to cheap automated manufacturing. When the price of robots/machines comes down, more and more manufacturing will come back to the USA but not in actual workers, but robo-production lines.

paradigm shift

the transition has indeed begun

 

[stinkmeaner]

I wanted to add something to this thread that I should have said in the first post: This thread was not intended to be racist or prejudice against the Chinese, instead it is purely dedicated to USA and other countries sending all production to China.

The Chinese have a highly adaptable and incredibly smart population, so much so that over the past few decades they have transformed their simple farming based, agricultural nation into one of the most most advanced, industrialized nations in the world. I do however wish they would stop counterfeiting products and in-act better labor and product regulations so that other countries can compete with them.

The USA also requires workers compensation insurance, breaks and lunch for workers. Most manufacturing jobs unionize and cost even more money. American Labor is quite expensive.
.

Many countries or should I say most First World Countries have the same or more benefits as cited above, it is just propaganda from the media that makes Americans think that these things are costing too much. The real problem with these billion dollar companies is that they spend ungodly amounts of money on advertising, endorsements, corporate perks, and all around top executive pay, these companies can not put the blame on Joe Blows coffee breaks when he is making under $10 per hour.

 

[lwien]

I believe that we are in a time period that is transitioning to cheap automated manufacturing. When the price of robots/machines comes down, more and more manufacturing will come back to the USA but not in actual workers, but robo-production lines.

paradigm shift

the transition has indeed begun

Sounds like a preamble to Skynet.

 

[tdavie]

Over the last 14 years, I've worked with ~12 Chinese graduate students. Three have gone back to China, but the others have stayed and become Canadian citizens, paying taxes Two have become good, personal friends. One (wife) comes from the small town (as she puts it) of Tianjin, pop 13,000,000. I've learnt a lot about life in China, and although there is increasing opportunity, things are still very messed up. As an example, my friend was 'cited' for falling asleep during the Chinese national anthem at her high school (bout 12 years ago). Also, the 'average' citizen knows nothing of Tianamen Square or Falun Gong.

My friend finally points out that 'there are more of us than you'.

It costs about $100 US to get 10 people to work for you for a week. However, I was also told that China will never be able to afford to educate more than an infinitesimally small fraction of it's population.

Didn't mean to rant; just wanted to comment on a few things I've learned about China.

Tom

 

[stinkmeaner]

It is always nice to talk to foreign people about their home countries, I love to pick their brains for the real scoop on the homelands.


It has begun
http://www.skynet.net/

 

[bcleez]

Stink, you brought up 1st world countries have the same benefits... well don't most first world countries buy from china and owe them a ton of money? Yes, they do. Plus you were comparing USA labor vs Chinese labor. The fact is that it is unfair because the Chinese labor laws and the currency manipulation.

Another comparison is Indian labor vs US labor. I worked at a design firm and American work could run 60-80 an hour. Indian designers would do it for dollars AND you could kick it to them when you leave work and it would be done when you walked in the next day due to the time difference.

 

[bones]

In other places around the world negotiating for the best price is a common thing and a welcomed custom. The sellers need to make money for.. well to eat to live raise family etc right? and the shopper wants to find the best price so this creates competition and etc...

Only in USA we don't allow negotiating except in private or what? Ok if money is leaving the country that's one thing but still it's a heating element that gives the desired effect. Shapes and sizes of all kinds but at the end of the day we are working with a specific temperature range and that's all that matters the rest is preference. :/


--

@outsourcing

It's simple the jobs are going out but it's all moving towards globalization or I like to call it a more single minded one consciousness all over. (human + truth)

Consider this once everyone has enough education and very specific things are common knowledge (example: 10-20+ years from now w/e) then? most truths will be known and mostly everyone will think more similar. Don't do this, this will happen etc... anyway we should just all merge we could do more together like visit other planets and fix things around the planet. imo

However remaining independent nations and not just human beings then it will not work out to move the jobs out, etc.

 

[bones]

All in all most Americans are going soft and actually believe this propaganda, they actually believe products NEED to be made in China, as if there is no other way.

The thing is that is the way money is working right now in the world... like positive and negative they work together for some reason. Look how much we are in debt in the west (we are consumers) and now look at china's money they are in the positive not negative (forget the term, they are the manufacturers)

It was set up this way for a reason perhaps everything is kind of order created thru chaos. It's a terrible system but it's the system in place and globalization may be happening in the 100+ years future who knows haha

great observations all around guys great post

IMO we just need factories again to make shit so people will have mindless jobs to rely on and if they don't like it then what can u do Buy our own products... but we're in debt.. so wait....


check this out -

http://www.atom.com/funny_videos/haha_america/

and of course

http://www.google.com/search?source=ig&hl=en&rlz=&=&q=money+as+debt&btnG=Google+Search
http://www.google.com/search?source=ig&hl=en&rlz=&=&q=money+as+debt+2&btnG=Google+Search

--

There's a reason they have 1 billion people in India and 1 billion people in China. In comparison to USA we have 300 million and Canada 33 million (check google)

sooo obviously they aren't sitting around arguing about it... instead are opening up factories and cheap labor shops etc doing those kind of things (who cares about minimum wage @ mcdonalds mentality)
...
..
.

Hey.... wasn't technology and science going to help mankind make things easier so we didn't have to work so hard at everything? Instead machines made things faster people got laid off or fired/replaced told to fuck off and pay their bills. Debt system built us a ton of crazy cities and shit....

So who is to blame? Me you him her anybody right? But ourselves... maybe it's the systems.... maybe we outgrew out outdated systems and are slowly (ages) taking our time to reach that ultimate conclusion. But who knows right


Toke it up fellas

 

[bones]

but i like this nation's diversity.

Agreed, for me there's only so much whining u can take sometimes, know what I mean...

not to mention uneducated people in the ghettos and? (whether their fault or not) and politics in general with their clever wording which mean bullshit.

It's time for truth damnit

 

[toxicc]

you could say that minimum wages drive up inflation, and you wouldn't be far from the truth.

This is totally (or mostly) false. Banks have created banking laws. Almost all the population think that the banks lend the money that people deposit in their bank accounts. In fact this is not how it is working at all. When you get credit from a bank, they create new virtual money! Yeah, they type the amount you want in a computer and new money that was not in the economy magically appear in your bank account. This is what create inflation. Because there is more money than there was before, each dollars now have a lower value. The monster that banks intentionally created is called "Fractional reserve". The subject is pretty complex but banks really create new money from nothing and this is one of the main reasons why the economy is bad. Money is created as debt. When you have money, it is because someone has a debt, and there is a lot more debt than there is money in circulation. A complex subject that needs a lot of reading.

When a deposit of central bank money is made at a commercial bank, the central bank money is removed from circulation and added to the commercial banks' reserves (it is no longer counted as part of m1 money supply). Simultaneously, an equal amount of new commercial bank money is created in the form of bank deposits. When a loan is made by the commercial bank (which keeps only a fraction of the central bank money as reserves), using the central bank money from the commercial bank's reserves, the m1 money supply expands by the size of the loan.[5] This process is called deposit multiplication.

In the example, the initial deposit is lent out 10 times with a fractional-reserve rate of 20% to ultimately create $400 of commercial bank money. Each successive bank involved in this process creates new commercial bank money on a diminishing portion of the original deposit of central bank money. This is because banks only lend out a portion of the central bank money deposited, in order to fulfill reserve requirements and to ensure that they always have enough reserves on hand to meet normal transaction demands.

The process begins when an initial $100 deposit of central bank money is made into Bank A. Bank A takes 20 percent of it, or $20, and sets it aside as reserves, and then loans out the remaining 80 percent, or $80. At this point, the money supply actually totals $180, not $100, because the bank has loaned out $80 of the central bank money, kept $20 of central bank money in reserve (not part of the money supply), and substituted a newly created $100 IOU claim for the depositor that acts equivalently to and can be implicitly redeemed for central bank money (the depositor can transfer it to another account, write a check on it, demand his cash back, etc.). These claims by depositors on banks are termed demand deposits or commercial bank money and are simply recorded in a bank's accounts as a liability (specifically, an IOU to the depositor). From a depositor's perspective, commercial money is equivalent to central bank money it is impossible to tell the two forms of money apart unless a bank run occurs (at which time everyone wants central bank money).[5]

At this point, Bank A now only has $20 of central bank money on its books. The loan recipient is holding $80 in central bank money, but he soon spends the $80. The receiver of that $80 then deposits it into Bank B. Bank B is now in the same situation as Bank A started with, except it has a deposit of $80 of central bank money instead of $100. Similar to Bank A, Bank B sets aside 20 percent of that $80, or $16, as reserves and lends out the remaining $64, increasing money supply by $64. As the process continues, more commercial bank money is created.

Although no new money was physically created in addition to the initial $100 deposit, new commercial bank money is created through loans. The 2 boxes marked in red show the location of the original $100 deposit throughout the entire process. The total reserves plus the last deposit (or last loan, whichever is last) will always equal the original amount, which in this case is $100. As this process continues, more commercial bank money is created. The amounts in each step decrease towards a limit. If a graph is made showing the accumulation of deposits, one can see that the graph is curved and approaches a limit. This limit is the maximum amount of money that can be created with a given reserve rate. When the reserve rate is 20%, as in the example above, the maximum amount of total deposits that can be created is $500 and the maximum increase in the money supply is $400.

So, inflation occurs because banks creates new money. If there was 10 billion (random number) in US dollars in 1950 and 100 billion US dollars in 2000 (all because of the banks funny money game), then the value of a dollar in 2000 is 1/10 of the value of a dollar in 1950. It is impossible for all debt to be paid, and the economy have been created in a way that if all debt was paid the economy would not work. That is why the government does not even try to pay back his debt. The banks get richer, people can't pay their debt so there is poor people, and the banks wanted it to be this way. Ever wonder why the banks have lend so much money to people that can't afford it wich caused the recession ? This is simply because it is part of their money creation game. This is something that can't last forever and the economy will soon totally collapse to death. (they will then probably introduce one world currency, new world order is near, look at the laws that are passing since 10 years ago, we are doomed).

 

[bones]

GREAT post toxicc great information.

http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil

Check out this story of how brasil worked their way around the problem kind of... they're still a ton of ghettos but this shows us what money is and that is....

money is based on faith.. what we all collectively believe in something to work and in all it's glory. Things go smooth, which is what happened for 100 years(?), we built all these mega cities just look at japan n those places.... even new york etc.

Ok so

if not everyone believes = system may fail

or

if the system fails = more will lose belief in the system (bums, unemployed, not working, beggars, etc)

To me the problem is the system (old technology/like combustion) keeping up with human consciousness and evolution (knowledge/truth coming up/global consciousness of truth and knowledge -> right instead of wrong) in today's world.

 

[chucku]

Toxicc,

You could not be further from the truth. No lender expects to not be paid when credit is given. When loans are defaulted debtors have their posessions repossessed, lose their car and/or dwelling. Banks do not want to be in the business of selling houses or cars. They want to lend as much as possible. That is where a lot of lenders got in trouble, lending to people or companies who are higher risk. In most cases higher risk is offset by higher interest rates but the last 2-3 have been very trying in many respects. In short what you suggest is not part of the grand design but rather symptomatic of an economic system that has a number of difficult challenges with no single solution. Government is too wastefull in its spending. Taxes are too high. The $10,000,000.00 question is what to cut and how much to tax. Many jobs would not have been lost with more favorable tax rates. More favorable tax rates led the to new automobile plants from Japanese, Korean and German companies, providing jobs and wealth creation for American families.

 

[lwien]

Was listening to Obama's press conference this morning and when he as talking about what in what area's the US lead the rest of the world in technology and manufacturing, he stated that our lead in being able to build the worlds fastest super computer no longer lies with us, but rather China for they have now built the worlds fastest.

I had no idea. It's 30% faster than our fastest.

 

[stinkmeaner]

Doesn't surprise me considering the practice they have had building the whole worlds electronics for the past decade. I wonder what this means for the Military of China, if they can apply the same innovation to various military electronics then they might just surpass America in that field.