> Won Lee <[EMAIL PROTECTED]> wrote: > A more significant slowdown in China will have negative impact in Europe > as well. I have no idea what that means for the Euro though.
Won is right that there have been issues. However ... Most retailers, especially luxury retailers, are betting big in China. Have you seen the new "fishmouth" grill designs on Audis and Chryslers? This is a direct result of market study in Asia, but specifically China. Asians prefer overt symbols of wealth - the big grill is such a symbol. Understand what that means: Luxury manufacturers are no longer designing for the US, they're designing for Asia. Most retailers are doing this because they're looking at American debt, both by the country and by the individual, and realizing that America can no longer buy more stuff. Essentially our credit cards are maxed out and we're not a growth market. So the smart money is looking east. VW has been there for 10 years. The American trade deficit exists because, basically, not many people want American goods. They do want European goods however - all of them that Won mentioned. As to China's effect on Euro there are too many factors to make any kind of prediction, but the real question is a comparative analysis: who's stronger? Europe, while it has problems, is a net creditor and it's citizens save, on average, between 8%-15%. It has access to cheap labor, and it's resource rich. Asians are creditors, (Japanese save 30%), they have cheap labor and are resource rich. America is a net debtor (almost to the point of bankruptcy), it citizen's save 0.5%, they have cheap labor but can't use politically use it, and we have some resources. Basically Asia is the growth market and their citizens have money to spend, Europe is the manufacturer and has goods that the Asian want, and America is maxed out. This is where I disagree with Won a bit - we don't have a recession, but it's hard to look at the debt and spending numbers and see how in the long run this will help us. This is why I'm skeptical of Mr. Bush's policy. It seems like a great short term idea that's spun out of control. My analogy is this: let's say your best friend is jobless but wants your lifestyle. You make $150k/yr. You get him a job that pays $50k/yr and then show him how bank loans work. He takes out $50k/yr loans that aren't due for 10 years. Is he living good today? Yup. Might he earn enough to pay off his loans when they come due? Yup. Is this fiscally smart? Nope. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Special thanks to the CF Community Suite Gold Sponsor - CFHosting.net http://www.cfhosting.net Message: http://www.houseoffusion.com/lists.cfm/link=i:5:135465 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
