The reports of America's demise may have been greatly exaggerated

[wiegie]

http://www.telegraph.co.uk/finance/comment...to-America.html

World power swings back to America

 

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus.

 

By Ambrose Evans-Pritchard, International Business Editor

5:53PM BST 23 Oct 2011

 

Assumptions that the Great Republic must inevitably spiral into economic and strategic decline - so like the chatter of the late 1980s, when Japan was in vogue - will seem wildly off the mark by then.

 

Telegraph readers already know about the "shale gas revolution" that has turned America into the world’s number one producer of natural gas, ahead of Russia.

 

Less known is that the technology of hydraulic fracturing - breaking rocks with jets of water - will also bring a quantum leap in shale oil supply, mostly from the Bakken fields in North Dakota, Eagle Ford in Texas, and other reserves across the Mid-West.

 

"The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d)," said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea.

 

Total US shale output is "set to expand dramatically" as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009.

 

The US already meets 72pc of its own oil needs, up from around 50pc a decade ago.

 

"The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity. As US reliance on the Middle East continues to drop, Europe is turning more dependent and will likely become more exposed to rent-seeking behaviour from oligopolistic players," said Mr Blanch.

 

Meanwhile, the China-US seesaw is about to swing the other way. Offshoring is out, 're-inshoring' is the new fashion.

 

"Made in America, Again" - a report this month by Boston Consulting Group - said Chinese wage inflation running at 16pc a year for a decade has closed much of the cost gap. China is no longer the "default location" for cheap plants supplying the US.

 

A "tipping point" is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture.

 

"A surprising amount of work that rushed to China over the past decade could soon start to come back," said BCG's Harold Sirkin.

 

The gap in "productivity-adjusted wages" will narrow from 22pc of US levels in 2005 to 43pc (61pc for the US South) by 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the US.

 

The list of "repatriates" is growing. Farouk Systems is bringing back assembly of hair dryers to Texas after counterfeiting problems; ET Water Systems has switched its irrigation products to California; Master Lock is returning to Milwaukee, and NCR is bringing back its ATM output to Georgia. NatLabs is coming home to Florida.

 

Boston Consulting expects up to 800,000 manufacturing jobs to return to the US by mid-decade, with a multiplier effect creating 3.2m in total. This would take some sting out of the Long Slump.

 

As Cleveland Fed chief Sandra Pianalto said last week, US manufacturing is "very competitive" at the current dollar exchange rate. Whether intended or not, the Fed's zero rates and $2.3 trillion printing blitz have brought matters to an abrupt head for China.

 

Fed actions confronted Beijing with a Morton's Fork of ugly choices: revalue the yuan, or hang onto the mercantilist dollar peg and import a US monetary policy that is far too loose for a red-hot economy at the top of the cycle. Either choice erodes China's wage advantage. The Communist Party chose inflation.

 

Foreign exchange effects are subtle. They take a long to time play out as old plant slowly runs down, and fresh investment goes elsewhere. Yet you can see the damage to Europe from an over-strong euro in foreign direct investment (FDI) data.

 

Flows into the EU collapsed by 63p from 2007 to 2010 (UNCTAD data), and fell by 77pc in Italy. Flows into the US rose by 5pc.

 

Volkswagen is investing $4bn in America, led by its Chattanooga Passat plant. Korea's Samsung has begun a $20bn US investment blitz. Meanwhile, Intel, GM, and Caterpillar and other US firms are opting to stay at home rather than invest abroad.

 

Europe has only itself to blame for the current “hollowing out” of its industrial base. It craved its own reserve currency, without understanding how costly this “exorbitant burden” might prove to be.

 

China and the rising reserve powers have rotated a large chunk of their $10 trillion stash into EMU bonds to reduce their dollar weighting. The result is a euro too strong for half of EMU.

 

The European Central Bank has since made matters worse (for Italy, Spain, Portugal, and France) by keeping rates above those of the US, UK, and Japan. That has been a deliberate policy choice. It let real M1 deposits in Italy contract at a 7pc annual rate over the summer. May it live with the consequences.

 

The trade-weighted dollar has been sliding for a decade, falling 37pc since 2001. This roughly replicates the post-Plaza slide in the late 1980s, which was followed - with a lag - by 3pc of GDP shrinkage in the current account deficit. The US had a surplus by 1991.

 

Charles Dumas and Diana Choyleva from Lombard Street Research argue that this may happen again in their new book "The American Phoenix".

 

The switch in advantage to the US is relative. It does not imply a healthy US recovery. The global depression will grind on as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble.

 

Yet America retains a pack of trump cards, and not just in sixteen of the world’s top twenty universities.

 

It is almost the only economic power with a fertility rate above 2.0 - and therefore the ability to outgrow debt - in sharp contrast to the demographic decay awaiting Japan, China, Korea, Germany, Italy, and Russia.

 

Europe's EMU soap opera has shown why it matters that America is a genuine nation, forged by shared language and the ancestral chords of memory over two centuries, with institutions that ultimately work and a real central bank able to back-stop the system.

 

The 21st Century may be American after all, just like the last.

[Ditkaless Wonders]

I hope this is so.

[delusions of grandeur]

So we're not fooked? Brent and Avernus are gonna be totally bummed

[evil_gop_liars]

Thank you Nancy Pelosi....

[CaP'N GRuNGe]

 

Occupy Optimism

[Perchoutofwater]

Within 5 years or so we will have had almost 4 years of a much more fiscally conservative administration as well as a more fiscally conservative congress. So, I can see us prospering again.

[bushwacked]

Thank you Nancy Pelosi....

You forgot the newb.

Edited October 28, 2011 by bushwacked

[bushwacked]

Within 5 years or so we will have had almost 4 years of a much more fiscally conservative administration as well as a more fiscally conservative congress. So, I can see us prospering again.

Is this mystical fantasy of yours generated in Romney's magical underpants?

[Perchoutofwater]

Is this mystical fantasy of yours generated in Romney's magical underpants?

 

I hope it is not Romney, but I'll take him over the idiot that is there now.

[CaP'N GRuNGe]

[Avernus]

So we're not fooked? Brent and Avernus are gonna be totally bummed

 

I hope this is true, you are a scumbag to assume I want our country to fail...

 

with the way things have been headed as a whole, it's not good for a sound economy but if this article is true, then who am I to argue...?

[evil_gop_liars]

 

 

[bushwacked]

 

[WaterMan]

He looked like he was hugging victims of the plague.

[delusions of grandeur]

I hope this is true, you are a scumbag to assume I want our country to fail...

 

with the way things have been headed as a whole, it's not good for a sound economy but if this article is true, then who am I to argue...?

I was totally joking and just messing with you bro. I figured we'd agreed on enough stuff, but the internet sucks for sarcasm...

 

Obviously nobody wants to see our economy collapse and end up Chinese sweatshop slaves.... Well, except maybe the Chinese...

[Hugh 0ne]

I hope this is true, you are a scumbag to assume I want our country to fail...

 

 

He even put a in there for you. Stay classy.

[CowboyGal2011]

US debt to surpass GDP on Halloween

[Avernus]

 

He even put a in there for you. Stay classy.

 

oh so he used a smiley and I have to know what he means? ...stay classy, hugh

[borge007]

Within 5 years or so we will have had almost 4 years of a much more fiscally conservative administration as well as a more fiscally conservative congress. So, I can see us prospering again.

Dream on.

[Brentastic]

Just to clarify for those that don't know:

 

delusions of granduer - great guy

Avernus - great guy

Hugh One - Ingratiating enchilada

[SheikYerbuti]

Is this mystical fantasy of yours generated in Romney's magical underpants?

 

He must have read Herm Cain's book, the one where he's already POTUS.

[i_am_the_swammi]

Within 5 years or so we will have had almost 4 years of a much more fiscally conservative administration as well as a more fiscally conservative congress. So, I can see us prospering again.

 

 

that's rich

[wiegie]

http://blogs.forward.com/the-jew-and-the-carrot/145383/

November 2, 2011, 8:14am

NY's Oldest Bialy Shop Is Saved by Unlikely Owners

By Gary Shapiro

 

The oldest bialys store in the country is still on a roll. The sweet smell of bread will continue to waft down Coney Island Avenue, as a landmark kosher bakery in Brooklyn gets a whole new lease on life.

 

Coney Island Bialys and Bagels, teetered and fell in September, after Steve Ross, whose grandfather began the company 91 years ago, called it quits. In a twist of history — and, one might say, a twist of bread as well — the store has been saved by two Muslim businessmen who leased the space and started a corporation under almost the identical name. They’ll keep the kosher shop’s offerings the same, preserving its history.

 

“It’s the same bialys…We are using the same recipe, too,” said Peerzada Shah, who now co-owns the business with Zafaryab Ali, who worked with Ross at the bialy shop for a decade. “We want to keep the place on track,” said Shah. And since re-opening in September, customers have regularly told the pair, “We appreciate that you’re keeping the store open,” according to Shah.

 

Ross said the new owners were putting in long hours and looking to grow the business. Ali said he and his partner plan to build on Ross’s kosher wholesale business, which supplies bialys to Staten Island, Brooklyn and New Jersey. Other remnants of the old business have stayed as well. Jeff Edmorin, who has worked at the store for nearly ten years as a baker and at the counter has stayed on, and Joseph Jackson, a longtime store worker has helped advise the two on their new business.

 

Ali and Shah came to bialy baking, which has historically been a family business, in a rather roundabout way. Both grew up in Pakistan and worked as taxi drivers after moving to New York. While Ali originally worked in a fruit store in Borough Park, Shah attended culinary school in Manhattan for pastry and had worked fixing ovens and other baking equipment when he lived in Pakistan. The two first got to know each other as roommates on Ocean Parkway, not terribly far from the bialy shop.

 

The pair plans to keep the shop’s baked goods and authentic character. None of the signs have changed nor the equipment and the shop will remain kosher. But they plan to spruce the place up. Shah has already laid down new tile for the front flooring and plans to renovate other parts of the store over time.

 

The two are also closely connected to Ross, whom they reach out to often with questions. Ross knows the bialy industry inside and out. The founder of the original store was his grandfather, Morris Rosenzweig, who came from Bialystok, Poland, the town from which bialys (savory baked dough with an indentation in the center) got their name. Rosenzweig began the company in 1920, making it the oldest in the city.

 

Jewish culinary historian Eve Jochnowitz, said “It’s a relief” that the shop is staying open, explaining that neighborhood businesses such as this bialys store are part of two communities: the local community who shops there regularly and the larger one who makes such a store a destination. They foster informal conversations about Jewish food.

 

While Shah and Ali may be the only Muslims to take over a Jewish bialy shop, other locales in the city have experienced similar changes of hand, most notably David’s Brisket House in Crown Heights.

 

When asked about the patchwork of neighborhood ethnicities that makes possible the Muslim ownership of a landmark kosher Jewish bialys store, Ali said with a smile, “That’s America.”

[Chavez]

...but I thought all Muslims were evil Jew-haters?

[Ditkaless Wonders]

...but I thought all Muslims were evil Jew-haters?

 

 

I thought they hated the non-evil jews as well.