It's the economy stupid...

Recently emerging as stand-alone devices with WLAN connectivity, Internet Radios make it possible to listen to the entire globe provided you can understand the local language of the broadcasting stations. Anyways... I was listening to the KIKK-CNN station from Houston, Texas this afternoon and burst to LMAO when the speaker told a news story about BMW closing down some of its ops in Germany (and subsequently cutting dozens of German jobs) to transfer the equivalent production facility (and create new jobs) to the US. The greenback is at its lowest rate vis-a-vis the Euro and Yen in our living memory and if you add to this the appallingly business-unfriendly social regimes applicable in most of the 'Socialist' governed Europe, it's no wonder that European companies with global reach are starting a new wave of outsourcing to the... US (yep, you heard right!). That's exactly what the broadcaster said holding her laughs. "The Europeans are outsourcing to the US', she said... "We just became... the new India".

Come to think of it, I wonder why it hasn't happened earlier. Outsourcing to China and India will inevitably transfer our western high-tech know-how to the Far East... at the same time, as the Chinese and Indians improve their own living conditions and standards, they become increasingly consumers of their own products they used to export to the countries that outsourced their ops there in the first place. Here's the mess. In the last few decades the geniuses of western capitalism killed systematically local manufacturing capacity and transferred it instead to the Far East. Little by little the Far East will end-up consuming many of the products manufactured locally and increasing local demand will drive prices higher. Inflation in China and India will inevitably push payrolls higher to avoid social unrest. Higher local payroll will hurt the margin advantage Westerners gained by outsourcing there in the first place. And we, in the West, will increasingly find ourselves with empty supermarkets and malls, double digit inflation and no capacity to produce what we need to consume. Our social security systems will collapse and pensions will become impossible to pay; we shall all have to become the new "third world" to which the nouveaux rich and famous from the East will "use" to outsource some of their own production.

Makes you think...