[Jewelry making - Article 00279] - Re: [Orchid] Handmade vs mass-produced

[Neil George]

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Dale,

    I enjoyed reading your post and I will add to it if I may. The only
    thing I will dispute, is the comment made by Dr. Denayer in a
    previous post about the weakness of the dollar, which in reality and
    with respect, is incorrect. 

    Here is the reason why. 

    Because of a relatively strong Dollar, foreigners have been willing
    to lend massive amounts of money to Americans because of its currency
    strength, the high financial returns, and by an almost touching faith
    in the strength of America in itself. It is for this reason, that
    foreign governments such as Japan and China have been willing to hold
    our debt in order to make the dollar stronger so they can build their
    home industries with exports to America. Because American living
    standards and U.S. economic performance today depends heavily on the
    willingness of foreign investors to loan the U.S. economy money and
    the willingness of investors to keep their money here, is the key as
    to why the dollar's current strength is a clear sign that lenders
    still consider the United States creditworthy, and the primary reason
    why the dollar is so *strong*. 

    A weak dollar, or a dollar decline, would end the consumption
    bubble. If the dollar took a dive today, we would be paying more for
    foreign goods, and we would no longer be able to pay for about
    one-third of these debts with paper IOUs as we do now. We will have
    to buy fewer or lower-quality goods. Therefore, as of today, the
    dollar is strong. A strong dollar could also be viewed as weakness,
    and the reasoning behind that comment, is that the strong dollar is
    making American exports too expensive in foreign markets, and foreign
    goods too cheap in U.S. markets. As a result, U.S. exports have been
    nose-diving in recent years, leading companies to lay off workers
    and hold back wage increases. And these individuals were once
    potential customers of ours. 

    The broadest measure of foreign trade is by monitoring the "Current
    Account". This is the means that quantify what our export debt
    deficit is at any given moment. The current account is the difference
    between what we earn overseas (primarily sales of goods, sales of
    services, and earnings on our overseas investments) minus what
    foreigners earn here (primarily imports of goods, imports of
    services, and foreigners' earnings on their investments in the U.S.).
    If the current account is negative, we *cover* the *deficit* with
    *debt*. Therefore the dollar is strong, because more confidence is
    generated by the US than any other market on earth, therefore
    concluding to the fact that there is more financial holdings and debt
    held in the US by foreigners than the other way around as far as
    Imports and Exports are concerned, which is why it is in the interest
    of foreign governments to maintain a high dollar. They don't want
    product for the most part, they want to own interest bearing notes
    such as home mortgages, Treasury notes and bonds etc. 

    Granted the cost of labour is a factor as is the exchange rate, but
    there are other criteria's to consider also. 

    The United States repeatedly signs trade agreements that lower U.S.
    barriers to foreign goods but do nothing to open foreign markets
    (like the Andean and Caribbean Basin countries). It repeatedly signs
    trade agreements with countries manifestly too poor to be major
    markets for American products, but more than capable of becoming
    major exporters to the United States (like Mexico and China). It
    looks the other way when other countries artificially depress the
    values of their currencies to gain trade advantages (practically any
    East Asian country you can think of). And with only a few
    exceptions, it ignores foreign dumping, which means, that the sale of
    goods in a foreign country is set at a price below that charged in
    the home market, or below production costs, in order to boost export
    subsidizes directly or indirectly by many of America's trade
    partners. It harms the rival producers in the target country, which
    usually cannot afford to participate in loss-making ventures. Dumping
    is frequently the result of overcapacity in the industry in question.
    Further industry subsidies have adverse affects meaning that payments
    are made and aimed at encouraging increases in various types of
    behavior. Producer subsidies encourage producers to produce more;
    consumer subsidies encourage consumers to consume more; research
    subsidies encourage companies and individuals to perform more
    research. 

    As long as this is, It could have been 10 times longer, but I will
    save it for another time :-). 

Best Regards.
Neil George
954-572-5829


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