Terminal Decline?Doubtful.The American Renaissance

[Aman A.K.A. Ahamburger]

It would seem that research institutes are finally starting to factor in the Chinese economy warnings to their models. So is this model accurate, or are we really seeing the end of any wealth accumulation in the west?


Thousands more millionaires in Canada by 2020:
www.nationalpost.com/todays-paper/Thousands+more+millionaires+Canada+2020/4729139/story.html

All those worried that new wealth can only be generated in emerging markets and the developed world is in terminal decline can rest assured.

The developed markets of Canada, the United States, Japan and Germany will continue to remain robust engines of wealth creation and have some of the biggest concentrations of millionaire households by 2020, according to a Deloitte LLP report.

Canada will have nearly 668,000 new millionaire households by 2020, taking their overall tally to 2.4 million, the eighth-largest concentration of millionaires among the 25 countries surveyed.

Their combined wealth will stand at a staggering $6.77trillion, nearly double the current level of $3.35-trillion, generated by 1.75 million millionaire households.

Interestingly, the 25-country list features only two emerging economies in the top 10. According to Deloitte, China will have 2.5 million millionaire households by 2020, ranked just a notch above Canada. South Korea will be the only other emerging economy in the top 10, with 1.7 million millionaire households by the next decade.

"In spite of the rapid growth of wealth in the [emerging market] economies, U.S. and Europe will remain the global centres of wealth over the next decade, in terms of both the amount of wealth held and the number of millionaire households," notes Deloitte in the report.

"Our analysis indicates that aggregate wealth of millionaire households in the U.S. in 2020 will likely reach US$87trillion, from US$39-trillion in 2011."

Overall, public and private investments controlled by the richest families are expected to more than double in value to US$202-trillion by 2020, from US$92-trillion this year, says Deloitte.

Wealth in the study includes financial assets (stocks, bonds, and other investments) and non-financial assets including primary residence, durables, business equity and other assets.

Canadian millionaires' asset allocation shows a strong bias toward their own businesses (28%), domestic stocks (21%), residential assets (21%) and domestic bonds (11%). Foreign stocks and bonds make up 12% of their assets, while cash makes up the rest.

In contrast, the Americans' asset allocation shows their entrepreneurial streak with a little over a third of their assets are tied up in their own businesses, while domestic stocks (22%) and residential assets (22%) make up the rest. Americans are less exposed to foreign equity than Canadians, with only 7% allocated in those assets.

[decoy409]

[Aman A.K.A. Ahamburger]

I know you think that America continuing on is a big joke, an impossibility; however what you fail to see is what Friedman pointed out..

"Industrial progress, mechanical improvement, all of the great wonders of the modern era have meant relatively little to the wealthy. The rich in Ancient Greece would have benefitted hardly at all from modern plumbing : running servants replaced running water. Television and radio? The Patricians of Rome could enjoy the leading musicians and actors in their home, could have the leading actors as domestic retainers. Ready-to-wear clothing, supermarkets - all these and many other modern developments woul have added little to their life. The great achievements of Western Capitalism have redounded primarily to the benefit of the ordinary person. These achievements have made available to the masses conveniences and amenities that were previously the exclusive perogative of the rich and powerful."


That is why your seeing people rise up. They are tired of riding a donkey while the rich drive cars. At least we get cars, I know all you like to do is play with smelly fish, however, it's nice to have a decent home, isn't it?

[Virgil Showlion]

It's an interesting article, Ham, but if this is the same Deloitte as from Deloitte & Touche, their prediction record on what "should have" happened between 2000 and 2010 doesn't inspire much confidence in their predictions for the coming decade.

Also, I see no mention of inflation in the full article. Are we going to see a spate of new millionaires because million will be the new 500K?

[lifewasgood]

Your kidding right? If not

Virgil has it right, with the flood of Dollars and hyper-inflation we will all be millionaires, too bad a Chevy will cost $490,000 bucks.

[Aman A.K.A. Ahamburger]

May 10, 2011 17:44:57 GMT -5 Virgil Showlion said:

It's an interesting article, Ham, but if this is the same Deloitte as from Deloitte & Touche, their prediction record on what "should have" happened between 2000 and 2010 doesn't inspire much confidence in their predictions for the coming decade.

Also, I see no mention of inflation in the full article. Are we going to see a spate of new millionaires because million will be the new 500K?

It's the premise, the fact is that all this talk about western decline is a joke, and only people that want things to crash like our friend life here so his minuscule amount of gold might be worth a bit more than say, a can a food, if their mad max fantasy comes true, buy into it.

Ask anyone right now that has lived through the past 50 yrs of being "riped apart" by inflation if they think having a million would be okay, even if it's not worth as much now in PP as it was 30 yrs ago.. Money is money, fact is, if your smart with it, you will be fine.

More people want what we have than want to be control by a dictator, I will bet a million dollars on that. Anyone around from 50 yrs ago got some pocket change to lends us for the bet?

[maui1]

aham- your defense of today, has no thought. just because you have it better than a homeless person, should not satisfy your desire for improvement, especially if you see yourself moving in the wrong direction.

[maui1]

I have heard about how China, Japan, Brazil, etc, etc, was going to take over the world for my entire life.


i am 58 and did not hear of these countries taking over the world......the ussr maybe, but none of the above.

our debt today, can not be matched to anytime in our past.........it just can't........no matter how deep you put your head in the sand.

[lifewasgood]

I get the feeling most on this board did not live or were to young to remember the 70's and early 80's. We came very close to the cliff edge and if not for the raising of interest rates to double digits putting value back in the dollar we would have collapsed IMO. It was painful for the working class and I don't think we are even to that point yet today. The way I see it, we either become millionaires driving $490,000 Chevy's or we tighten money supply by raising interest rates to double digits, slowing the consumption and building a strong dollar. It will change us into savers instead of credit hogs.

[maui1]

i lived and worked thru the 70s and it was nothing like today.

volker saw a problem long before we got to where we are now and was willing to take the heat in order to delay the problem. we don't have someone like that, with enough power to move us away from the cliff that we are 'hanging ten' on now.

i also remember that most of the 70s inflation issues, sprang from the move out of the gold standard

[Virgil Showlion]

Major hit to the Philly Fed manufacturing index today.



Apparently the second-largest drop in history. Not that the markets seem to mind.

Tyler was running some laff pieces about LinkedIn (LNKD) racing up 60% to a ~1,500 P/E in the span of a few hours. And volume on the NYSE hit a yearly record low.

[decoy409]

Virgil, as in today's post,it all comes out in the wash. And I have noticed that the wash cycle is running lower and lower in time washing and the spin cycle.
So in turn (as you just presented) using the employment number for example that it took a month before somebody figured out the real numbers going down,now the release of info (once again as you present) took no more than a few hours.

[Aman A.K.A. Ahamburger]

May 19, 2011 8:32:36 GMT -5 @maui1 said:

aham- your defense of today, has no thought. just because you have it better than a homeless person, should not satisfy your desire for improvement, especially if you see yourself moving in the wrong direction.

What are you talking about?? You think I have no desire to get ahead. That isn't the point of what I was saying at all. Your just mad because you have got NOTHING... Nice try though.

Lets see if I can break it down for you all that fail to see that the USSR was going to destroy the west for decades, still probably wants to but can't. The Middle east, hmm?? Anything there in the last 10 years or so?? Japan in 1981 was supposed to be bigger than the US by 2010.. Hmmm.. Read a book, please people.

WE are all connected, the only way out, is for EVERYONE to go forward. They have BILLIONS of people that are ready to revolt against them.. We have millions that are semi-pissed.. hmmm???

I don't expect some of you to get it. Keep focusing on the day to day!!!

Aman, OUT!

[Aman A.K.A. Ahamburger]

May 19, 2011 12:14:44 GMT -5 @maui1 said:

I have heard about how China, Japan, Brazil, etc, etc, was going to take over the world for my entire life.


i am 58 and did not hear of these countries taking over the world......the ussr maybe, but none of the above.

our debt today, can not be matched to anytime in our past.........it just can't........no matter how deep you put your head in the sand.

Head in the sand?? wxyz lists of China as a country that is rumored to take over the USA, and you say none(i underlined that for you) of the countries in his list are supposed to take over the USA.. I don't need to say anything more. You have just showen your I.Q.

[Aman A.K.A. Ahamburger]

This is what I luv about the internet, things hang around. We have a few on here that love to spout the end of the west, world, whatever, when they think they have something. Hmmmm?

Terminal Decline? Doubtful.

[maui1]

I have heard about how China, Japan, Brazil, etc, etc, was going to take over the world for my entire life.

Head in the sand?? wxyz lists of China as a country that is rumored to take over the USA, and you say none(i underlined that for you) of the countries in his list are supposed to take over the USA.. I don't need to say anything more. You have just showen your I.Q. [/i]

aham- do you understand the difference between present and past tense?
talking to you is a waste of time.....but to humor you.......i will this last time.

[Aman A.K.A. Ahamburger]

I luv humans.. Okay talking to me is a waste of time. Then why even respond?? You take five days to think of a comeback and the best you can come up with is trying to attack my grammar?? Okay.. China taking over the US has been the talk of the town now for over five years. So it is in the past.. Thank you for your time brain.

Terminal Decline? Doubtful.

[The Virginian]

Inflation will be occurring in China more than the states - When it gets to the breaking point we will simply move on to another low wage country for production of our toys. They (China) will be stuck with higher wages and high unemployment.

[Aman A.K.A. Ahamburger]

It's already happening to a point. Those countries, like Bangladesh are already fighting for higher wages. However, re shoring is also happening. The cheap wage advantage won't be around forever.

[The Virginian]

The cheap wage advantage won't be around forever.

Just move on to the next emerging 3rd world economy.

[Aman A.K.A. Ahamburger]

That's what's happening, however, those countries are using China as a benchmark, they are all crying out. The cheap labour advantage won't be around forever.

China's Rising Wages Propel U.S. Prices:
online.wsj.com/article/SB10001424052748703849204576302972415758878.html?mod=googlenews_wsj

But the wage gap between China and other developing countries will shrink, said Mr. Fung, echoing views shared by Boston Consulting Group, because "China was the thing that kept the price low," he says. "China was the benchmark. With the China price rising, everyone else wants to raise prices."

As factories relocate to other countries, local wages will rise faster than they did in China because the potential pools of surplus labor are smaller. In addition, because no other country can replicate the massive scale of China, logistics will become a larger part of costs as companies are forced to slice up their manufacturing over several countries, analysts say.

[Aman A.K.A. Ahamburger]

Another good article outlining the realignment we are seeing in the global supply chain.

United States regains China jobs:
www.kansas.com/2011/05/19/1854873/regains-china-jobs.html

Wages in China are still below those in the U.S., but are rising on average 17 percent a year, according to a recent report by the Boston Consulting Group.

"We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015," firm senior partner Harold Sirkin said in a release. "As a result of the changing economics, you're going to see a lot more products (say) 'Made in the USA' in the next five years."

[Aman A.K.A. Ahamburger]

As China’s Workers Get a Raise, Companies Fret
www.nytimes.com/2011/06/01/business/global/01wages.html

Bruce Rockowitz, the chief executive of Li & Fung, the largest trading company supplying Chinese consumer goods to American retail chains, said in a speech here on Tuesday that the company’s average costs for goods rose 15 percent in the first five months of this year compared with the same period last year. Executives at other consumer goods companies have encountered similar or larger increases.

Airline flights to Vietnam, Bangladesh, Indonesia and other low-wage Asian countries are packed these days with executives looking for alternatives to double-digit wage increases in China. But wages are rising as fast or faster in many of these countries, following China’s example, while commodity prices have surged around the world, leaving buyers with few places to turn.

Bangladesh raised its minimum wage by 87 percent late last year, yet apparel factories there are still struggling to find enough workers to complete ever-rising numbers of orders......

............Coach, the luxury handbag company, announced in January that it would try to reduce its reliance on China to less than half of its products within four years, from 80 percent now, by moving production to Vietnam and India.

Yet wages in Vietnam have been rising as fast as Chinese wages, or faster, while India has posed many problems for large-scale manufacturers. Mr. Rockowitz said that India’s infrastructure — roads and ports — was “really poor,” while labor issues, including government regulations, make it hard to build Chinese-style factories for tens of thousands of workers..........

.............Workers in developing countries all over the world are becoming more aware of pay elsewhere through the Internet and the use of social media like Facebook, increasing the pressure for higher wages, Mr. Rockowitz said............

......Many companies have another reason for staying in China these days: that is where their sales are growing fastest..

Wages go up, making them less competitive, but wealthier. So companies don't lose the business there, just gain more, and we all are a part of the action. Win, win, win! WE WIN!

[Aman A.K.A. Ahamburger]

More and more evidence.
China Factory Town Shudders at Rising Costs
www.cnbc.com/id/43262632

"We just can't hire any workers. The minute they step into the factory, all they want to talk about are wages," she said, as she pinned the beads onto a metal frame to be spray-painted silver to add luster to their shine.

[Small Biz Owner]

Are we going to see a spate of new millionaires because million will be the new 500K?

The value of the US Dollar

[Small Biz Owner]

Or if you prefer INFLATION

[Small Biz Owner]

By the way, you would only need $787,000 in 2001 to become a millionaire today. Just by inflation.

[Aman A.K.A. Ahamburger]

Then there is this, which is where that middle class comes in..



The wealth has trickled down to the depths of the chain, lets see where this goes over the next 30 yrs..

[Aman A.K.A. Ahamburger]

A couple more people that are buying into this crazy re-shoring idea, and agree with the study out of Boston.

U.S. Manufacturing May Have New Life
www.onlinetes.com/aerospace-manufacturing-design-Paul-Grasso-amd-060311.aspx

'Made in the USA' label will return, some experts say
www.standard.net/topics/business/2011/06/02/made-usa-label-will-return-some-experts-say

[Aman A.K.A. Ahamburger]

Manufacturing center set to open in Columbus
www.ibj.com/manufacturing-center-set-to-open-in-columbus/PARAMS/article/27689