william the wie
Gold Member
- Nov 18, 2009
- 16,667
- 2,402
- 280
Given the amount of capital added that creates a new job used to be known:
The proportion of used but usable capital equipment that was exported to the US from countries with Value Added Taxes was fairly steady from the 80s until a slight blip two years ago and now a big blip last year.
The reason for the blip is known. China keeps adding capital controls so more ingenuous ways of getting capital out of the country are devised to get around those controls. Those ways obviously include a lot of capital equipment being sold as junk on the manifest in China and being sold at higher actual value here.
That reduces US capital costs by a lot. But at some point the supply of abandoned factories and ghost cities that can be profitably looted will run out and that will hurt a whole bunch.
On the otherhand since pipelines reduce the breakeven point of drilling energy costs will go down in the US, Given the natural gas and kerosene that can be produced from coal fields and the drop in prices for coal that drop in energy prices could cause major economic stimulus.
So, which will predominate or if you prefer what is the sequence of these two trends?
The proportion of used but usable capital equipment that was exported to the US from countries with Value Added Taxes was fairly steady from the 80s until a slight blip two years ago and now a big blip last year.
The reason for the blip is known. China keeps adding capital controls so more ingenuous ways of getting capital out of the country are devised to get around those controls. Those ways obviously include a lot of capital equipment being sold as junk on the manifest in China and being sold at higher actual value here.
That reduces US capital costs by a lot. But at some point the supply of abandoned factories and ghost cities that can be profitably looted will run out and that will hurt a whole bunch.
On the otherhand since pipelines reduce the breakeven point of drilling energy costs will go down in the US, Given the natural gas and kerosene that can be produced from coal fields and the drop in prices for coal that drop in energy prices could cause major economic stimulus.
So, which will predominate or if you prefer what is the sequence of these two trends?