Letters to the Editor
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silver and inflation
i think Mr. Leonard has it wrong with the cut in silver flows to China causing inflation during the 17th century. When gold and silver were money, massive imports of metals caused inflation. It was just like printing more money in this age of fiat money. Inflation happened when all the Inca gold hit Europe at about the time in question. So when European collapse cut the silver payments, that should have DECREASED inflationary pressures.
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Yes but
400 years ago China had zero desire and less actual ability to absorb any technology flowing the other way, back to them. They were quite happy to take the west's money because they didn't want or need anything else. I suspect that China does not feel that way now. They need us to help them develop in more ways than simply paying for it. From a high tech perspective, China is 4 decades behind the west from a pure R+D, applied, implemented technology perspective. And no amount of Tom Friedman hand flapping is going to magically allow them to make a quantum leap in the next year or two. It's clear that soon enough the Chinese machine will stall out if all they get from us is cash. Assuming they can't simply steal every last ounce of Intellectual Property they need, which is possible but not probable.
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This whole Globalization thing?
Not really new.
(Nice comparison. And I find your reading choice very impressive. Much more so than the novel I just picked up today.)
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Great Wave
Read The Great Wave by David Hackett Fisher - if his description of the first four inflationary waves - which each time get shorter, more intense, and closer together - is correct, then we've got quite a crappy decade or two ahead of us.
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history repeating...
Wow, this is very interesting.
I read an interesting interview today with one of Warren Buffet's original partners who is now retired in Singapore. He says he is taking his money out of dollars as fast as he can. He thinks Greenspan and Bernanke have more or less destroyed the Fed and that it will collapse soon as a result of their bad policies. That coupled with our massive foreign debts ($13 trillion?) will cause some major economic hurt. I think this whole thing is going to way worse than anyone imagines.
Today we have terrible housing news yet again, but the stock market goes up. I guess I just don't understand the economy.
The world has a lot of problems. But all we care about in this country is whether you wear a flag on your lapel or have a funny name. We get what we deserve.
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Break Up China?
You have to wonder how much China loses maintaining the semblence of a central government. Being widely diverse racially and culturally, what keeps the whole thing from breaking apart? Would China benefit by allowing a bit more independence? Since the Chinese adopted Capitalism they are no longer Communist, so what gives? What is the real China?
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The new China is already dead.
The Chinese, as the Russians, chose the easy path out of their failed command economy and how they have loosened social restrictions (politics is still meaningless). Both countries, particularly China starting from virtually no meaningful industrial base, could have looked forward (by looking no further back than the 1970s and seeing what the unchecked rise of consumerism did in the West and Japan) and seen that hitching their economic wagons to West's consumer capitalism model have sown the seeds for their own dives. What automobile in most prized in the new China? The Cadillac Escalade.
Rather than looking to the West, China should have taken more lessons from Singapore. Obviously, the scales are about as different as can be. But Singapore's benign dictatorship with a strong sense of general social welfare would have served them well. But like the nouveau rich everywhere, the Chinese know the price of everything and, apparently, the value of nothing. The country has just swung from one idiotic extreme to another. The Beijing Olympics will be an unmitigated disaster.
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Let us know when you finish the book, Andrew
If the situations are as analogous as the first few pages make it sound, perhaps the Manchus' prescriptions to fix ancient China's ills could help ameliorate our modern-day troubles as well?
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New data point
This morning the WSJ is advising their readers to stockplie food. What's next? Invest your money into shotgun shells and concrete bunkers?
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Globalization bites Microsoft
Having outsourced most of its work overseas, globalization finally bites. Having drained money out of U.S. economy, Microsoft faces lower sales and prospect of lower prices in the U.S.. I think this is just the tip of the iceberg, wait for other companies to follow.I guess they thought the fun will never end.
http://bloomberg.com/apps/news?pid=20601087&sid=aeTQRru3VIeI&refer=home
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Then and Now
Andrew You can't seem to get away from the serious stuff, but then reading Wakeman Jr.'s masterwork is hardly leafing through an old collection of The Far Side.
It is startling how much economic patterns seem to repeat themselves, how often we humans don't seem to remember that Booms are followed by Busts and these cycles can be recognized in other countries, through out history.
Mr. Senter's comments "silver and inflation" seem to have some merit, but are wrongly directed at you instead of Wakeman whom you quoted. Also, even Wakeman was hedging on the causes of inflation and in your next quote of him, gave a whole slew of social woes that could skew the economy of that time (or ours) towards inflation, or depression or stagflation.
There are so many economic and social mechanisms that push the economy in one direction or another it hard to figure out which factor will win out, a bit like watching a rugby scrum.
What do you mean by "HTWW"?
It's a shame you never give a brief comment or two back about comments posted about your articles.
Nice little historical comparison, wayne
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Hardly.
Having outsourced most of its work overseas, globalization finally bites. Having drained money out of U.S. economy, Microsoft faces lower sales and prospect of lower prices in the U.S.-- semionb
Microsoft peaked ten years ago. It is now a mature company and like all successful mature companies they are past their remarkable growth phase. PC sales have been fairly flat now as the world wide market has been as saturated as it can be at present.
Microsoft employs over 40,000 people in the U.S., which is a huge number for a software company. I have no idea where you get the idea that they have "outsourced most of its work overseas." They are again expanding the Redmond campus. Microsoft's biggest problem, supposedly, is having a large enough talent pool to draw from in the U.S.
Current Employment Headcount
Location Employees
Worldwide 78,565
USA 47,645
Puget Sound
Washington) 35,510
http://www.microsoft.com/presspass/inside_ms.mspx