Every country benefits with an early start, but once others catch up,
and even bypass them in developments, the bragging rights will slowly be
gone. Let us not look at the Europeans alone as examples, but at Japan
and South Korea, the two most innovative countries in Asia. Their era of
manufacturing domination is gone or going, with Japan already gone for
more than thirty long years, and with absolutely zero GDP growth for
decades.
South Korea is also losing out to China. But China will
also suffer the same fate, given another decade or two, more so with
the USA taking pot shots at China in every field of development. No one
took pot shots at the 'Asian Tigers', but they also lost ground, which
is a natural working of the 'Wheel of Fortune'. As Xi Jinping said -
'Snuffing out other's candles does not to make one's candle brighter'.
No country can be at the top forever. No one climbed Everest and can
stay at the top.
The irony is that the rise of Germany and Japan
had been stonewalled and hijacked by the USA, to keep them from
overtaking. These two are practically vassal states of the USA and can
be ordered to stop, when the 'Emperor's Edit' is read to them. However,
stopping China from progressing is not the same or as easily as Germany
and Japan. Using USA's fake 'Emperor Edits' against China's centuries
old and original 'Emperor's Edit' is not going to work. Real Emperors do
not issue fake edicts.
I do think that Japan is going downhill
very rapidly. So is Germany. The third and fourth largest economies of
the world are in deep trouble. On the other hand, economies of countries
like Brazil and Indonesia, with abundant natural resources are the
future growth engines of the world. Russia is an example of how well
countries can survive with abundant natural resources. And do not forget
about the Middle Eastern countries and Africa, which are also
developing fast, beyond just oil. As for those Central Asia economies,
rich in natural resources, they may take much longer to put their house
in order, but with help from China, who knows.
So for those
countries running away like wild horses over the past few decades, their
days are numbered, just depending on manufacturing, without the natural
resources to back them up. They may assume and think that money will
solve all problems, but just look at countries now cutting back on
exports of essential commodities, and you can understand the issues
going forward.
I just watched a documentary talking about some
poor country's citizens (forgot which country) migrating their main diet
from rice to cheaper sorghum which were plentiful. Sorghum is much more
nutritious than rice, but for those not used to the taste, it may be
difficult to talk about changing one's diet.
Anonymous
Japanese Yen is now reaching for the banana note status of the past. With Japan's Government debt at 263.9% of its GDP, any further stimulus package or back up plans to support the Yen is not go'ing to work. Abenomics failed to work. Kishidanomics is not working either. Wonder what other 'Anonaynomics' comes after this, but it will fail as well.
ReplyDeleteInterestingly, Singapore is the second most Government indebted country in the world. Surprising isn't it.
Not too long ago saw one report think AsianQuickTake that UAssA Indebted at 135% to the GDP and Sinkieland at 165%?
DeleteNow UAss should be 200 plus %
Wow!
“The markets have consistently tried to price in rosy scenarios which were associated with a weaker dollar and they continue to be surprised that the reality isn’t quite as rosy,” said Maurice Obstfeld, former chief economist at the International Monetary Fund.
ReplyDeleteThe strong dollar “is going to be negative for emerging markets. It’s going to be negative for global trade,” he said.
So far at least, the damage has been less widespread than last year, when the dollar surge led to a historic selloff in emerging-market assets and helped tip countries like Sri Lanka and Ghana into full-blown economic crises.
In recent months, currencies in Latin America and Eastern Europe have been hit hard. Central banks in Brazil, Poland and Hungary have started cutting policy rates after winning praise for their quick action to tighten monetary policy in 2021, well ahead of the Fed and other developed-market central banks. They are now under pressure to pause or slow rate-cutting plans to prevent further pressure on their currencies.
A stronger dollar is felt broadly in emerging markets. A paper co-written by Obstfeld last year showed how the shock of a sharp rise in the dollar leads to yearslong economic underperformance in less developed economies. Consumption, output, investment and government spending all come under pressure alongside the local currency.
“It’s a double whammy,” he said. “You’re being driven away from your growth target and you’re being driven away from your inflation target at the same time.”
Some global central banks are tapping into stockpiles of foreign currency to help shore up their currencies. Others are publicly threatening to do so, a tactic known as jawboning.
Japanese Finance Minister Shunichi Suzuki on Friday pledged to take action against sharp falls in the yen, which is close to 150 a dollar. That is around the level that last year spurred the
“We will take appropriate action against excessive moves without ruling out any options,” Suzuki said. “We have a strong sense of urgency.”
Both Switzerland and South Korea have sold foreign-currency reserves to bolster their currencies, the franc and the won. Analysts believe China is helping prop up the yuan, which fell to a 16-year low in onshore trading in September, by having state banks sell dollars.
Investors had largely expected the greenback to weaken this year as the Fed wound down its most aggressive campaign of interest-rate increases since the 1980s. Indeed, in the first half of the year, beaten-down currencies like the British pound and euro rebounded from 2022’s brutal declines.
But those rallies have petered out. The euro, which topped $1.10 over the summer, has fallen back toward $1.05 as the eurozone economy stagnates and worries over debt sustainability in fragile southern economies like Italy re-emerge.
Many investors still hope the dollar’s decadelong winning streak, which has left it at least 10% overvalued by many estimates, is coming to an end.
One factor could be fading American growth. U.S. consumers have been running down their $2 trillion-plus in pandemic-era savings and the resumption of student-loan payments is expected to further dent consumption. The unemployment rate, while still near historic lows, has been edging up.
U.S. growth is likely to fall in line with the rest of the world in 2024, said Luca Paolini, chief strategist at Pictet Asset Management. The dollar’s recent rally is “the last hurrah before a significant decline next year,” he said.
Due to tariffs on Chinese components, iPhone 15 cost Indians way more than it would have in US, despite ‘made in India’
ReplyDeleteApple fans in India are having to shell out a lot more than their counterparts in the US to get their hands on the latest iPhone 15 models, which were launched last month.
In India, the iPhone 15 - which costs $799 in the US - is selling for Rs 79,900 (around $965), while the $999 iPhone 15 Pro is selling at Rs 1,34,900 ($1,628) and the $1,199 iPhone 15 Pro Max costs Rs 1,59,900 ($1,930) — which shows that the price difference in some models is more than 50 percent.
In the latest line-up, the iPhone 15 and iPhone 15 Plus models are being locally assembled. But even if smartphones are assembled in India, many components are imported, especially from China. These components also attract duties, which impact the phone’s price.
While iPhones are ‘made’ in India, it is important to note that their components are subject to import duties. Similarly, the iPhone 15 Pro models (which are imported) face even steeper tariffs, with a 20 percent customs duty and an additional 2 percent cess.
A 2022 comparative study of India’s import tariffs in the electronics sector, by the Indian Cellular and Electronics Association (ICEA), released in July this year, noted that India’s electronics manufacturing industry, which included mobile phones, was marred by high input tariffs, resulting in increased cost of production, reduced scale of operations, and lower ability to compete in both the global and the domestic markets.
American gangster Blinken warned China not to sell weapons to Russia or faced consequences. Chinese ambassador showed him the middle finger, and told him if the American gangsters can sell weapons to Taiwan, China would sell weapons to Russia or anyone else.
ReplyDeleteYou want to threaten China? Bring it on.