Category Archives: Globalization

Why I Don’t Write About AIG Anymore

So someone asked as to why I am not writing updates about AIG anymore.  The simple answer is, my work is done.  The whole point was to draw attention to AIG, before the financial crisis.  I knew it was rotten and now, so does everyone else.  So I don’t have to write about AIG anymore, the word is out, my work is done and I am pleased to see people are paying more attention to the likes of AIG.

You should not trust this company, be cautious and be careful when dealing with them.  They work for you, not the otherway around.

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Filed under Business, Consumer Activism, Consumerism, Economics, Globalization, Government

Vitamin C Not Made in China, Updated

Ok, so some people want an update on the Vitamin C post.  It’s a bit dated, so this will help update the list.  For those of you who do not know, China produces the bulk of vitamin C in the world.  They got that way by the government of China subsidizing the production cost of vitamin C, allowing them to undercut everyone else on the market until they drove everyone else out of the market.  For your information, that’s a violation of the WTO of which they are a member of and are not suppose to do such unfair trade practices. 

 

This is in an update, so go read the old post and the comments and then read this one.  Don’t expect a long list since almost ALL vitamin C sold in the US, comes from China.  In all honesty, get your vitamin C from natural sources!  The Chinese in a Wall Street Journal article defended their practices of price fixing, they don’t want to play fair and they have proven to not care about your health. 

 

My best advice, advocate at the local, state and federal level for country of origin labeling for all products sold in the US.  Then you will know what you are getting and can make a real informed choice.

 

Here’s what I have found:

 

Vitamin C foundation 

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Filed under Business, Consumer Activism, Consumerism, Food, Globalization, International Trade

Oil Subsidies

Something most people don’t focus on when it comes to our high gas prices, is the role of fuel subsidies. I’m not talking about in the US but in China and India. These countries, along with many oil producing countries, subsidies the price of oil. This creates an artificially higher demand than actual supply would naturally allow if they were to float these commodities naturally as is done in most modern countries.

The simple solution is to have these countries stop and allow the price to settle in at a natural supply and demand point. Oil I am sure would fall as most Chinese and Indian’s, and Russians or Venezuelans, cannot afford to pay $4 a gallon and would fall out of the oil market all together. This would mean the artificially high demand would go away.

The problem is, these countries will not do this without some substantial pressure from the outside and I do not think the will by Europe and the US is there to create such pressures. Beyond that, the other options do very little to curb this artificial demand. You can impose surcharges on imported goods or some other measure but they would do very little in the long run.

The only way to move away from this is to create more choice in fuel options. When you have competition, quality improves. If I were in charge of the government, I would be giving tax breaks and funding every alternative fuel source I can find. This will create more options and choices and as more people move away from oil to these other options, the demand on oil will go down and the need for it will as well. Those still dependent on it will find that prices will go down. Seems like a good solution, too bad no one in Washington can think up something so simple.

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Filed under Alternative Fuel, Business, Consumerism, Energy, Gas, Globalization, Renewable

Russian President Medvedev on Economics

The new Russian president is blaming the US for the financial melt down we are experiencing. I am not surprised by his rhetoric, after all, the Russians love claiming how bad the US is and how they have a great system (like the part about not allowing opposition voices). Although the Russian president may think he is being smart in his attacks, he is showing us a great misunderstanding of just how the markets are suppose to be working and frankly, shows us why we should not bother investing in Russia.

Here’s what he said “Failure by the biggest financial firms in the world to adequately take risk into account, coupled with the aggressive financial policies of the biggest economy in the world, have led not only to corporate losses.”

Ok, so the biggest firms in the world, yes that’s right, the world, meaning not US, so how is it the US that is to blame when these companies are allowed to do their business globally, in such places as Russia? Fact is, financial firms blew off the US a long time ago, they are “global.” Meaning, they go where the money is with no regard for national interests. The one thing I will say is that the US Fed is acting like it is in control when it is not, we should have let Bear Sterns fail, that’s called capitalism, what we are seeing is corporate welfare which I do not agree with. At the same time, we have an economy based on 70% consumer spending and we let our dollar get weak, which is about as dumb a move as you can make. But that’s impacting the domestic US market, not so much globally.

Here’s another gem from Medvedev “”No matter how big the American market and no matter how strong the American financial system, they are incapable of substituting for global commodity and financial markets.” I’d like to know what this guy is on, because even my basic finance 101 class back in high school, we learned this fact. The US is one market and one market only. Granted, I know quite a few Wall Streeters who don’t always remember this, but I don’t believe this is endemic.

So we know the new president of Russia really doesn’t have a grasp of economics, lets see what else he says. “Russia is now a global player and understands its role in supporting the global community.” I wonder if he means the part about over priced oil and causing the developing world to remain in poverty as a result while Russia becomes flush with cash at the same time. How is that supporting the global community by causing people to fall further into poverty?

Or is Russia helping us by showing us the Neo-Stalinism with their anti opposition practices and limits on investment by foreign companies in Russia? How is that being a global player? Being a global player means competing on equal terms, we invest in your country and you can invest in ours, if we can’t invest in your country meaning buying entire companies without restrictions, then you are not a global player, just a wannabe player.

So, I guess this is the new face of Russia, flush with cash and ego-economics. Yawn, forget the Russian market, with guys like this in charge they will nationalize your assets at a whim. You are better off investing in Canada, at least they play fair and they have oil too.

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Filed under Censorship, Economics, Globalization, Politics, Trade

The Price of Goods is Up, Thanks to Globalization

Here’s one of those little facts the free traders and globalizationist forgot to mention. Last week, Wal Mart said that its cost for shipping goods to the US had doubled and if oil goes to $200, it will double again.

So last year, it cost about $3,000 to ship a container from China to the US. Today it is about $6,000 – $8,000 and if it oil goes to $200 a barrel it will be estimated to cost $15,000. Of course Wal Mart or anyone else is not going to eat that cost; they will pass it on to you the consumer.

So, lets say a container has 1,000 products that have a cost of $30 before shipping. So last year, the shipping cost was $3 per item. Today it is $6-8 per item, if oil goes to $200, it will be $15 per item. So something that might have cost $33 by the time it hit the shores of the US, now costs $37 and could cost $45, a $12 difference just in the shipping cost alone and that doesn’t include the cost to get it from the port in the US to your local store, that’s an additional cost as well! Now times that, by 80% of the products in Wal Mart or Target and you can just imagine how much bigger your bill is compared to two years ago. Add to it your cost to drive there and your ability to buy goods has gone down.

Then if you really want to have some fun, factor in the weaker dollar that makes everything more expensive that is not sourced from the US. So overall, you pay more for the very same thing, yet get no added value for that extra money you just paid. The globalization people never mentioned this when telling people how great globalization is, because they knew you wouldn’t support such a system if you knew.

There is a way to combat this, a four step buying guide that is very simple to follow. First, source locally as much as possible. Buy from farmer’s markets or local Community Supported Agriculture. Go for local as much as possible and demand those producers source locally as much as possible. This helps to minimize the swings in global commodity pricing as well as gas prices because the transportation factor is less.

Next, go national; again, demand the seller sources locally as much as possible. Where I live garlic doesn’t grow so well, but they do grow garlic in California, so that’s where I buy from. I will pay more but I will not have to pay the extra $3-15 for it to be shipped from China. If that doesn’t work, source from responsible companies that practice on the global scale. Good luck finding them, most do not open themselves up enough to really see how they get their goods to you. Last, buy from retailers that are more focused on supporting the local community than with some global agenda.

Yeah, I can hear it now; people will say that is protectionism. No, it is responsible shopping. When goods from afar cost more and use up our vital resource, that is not being responsible. It is better to buy local, save our gas, spend less on oil and have more money to go further. That’s sensible shopping.

If you don’t want to be impacted by the rise in global energy prices, you need to adjust and force businesses to adjust by spending your money in different ways, being conscious of how you get your resources and how they get theirs. Demand transparency, believe me, most will not want to be transparent because they know you will not do business with them if they are. They got us into this mess so they don’t want you knowing that. But if you prefer paying an extra $20 with no added value, do nothing, it will come. If you like to have your money go further, simple changes can make a huge difference.

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Filed under Business, Consumer Activism, Consumerism, Energy, Gas, Globalization, International Trade

Non US Site Shutdown for Offering Cuba Trips

So the New York Times feels it is horrible that a Brit had his sites shut down for selling trips to Cuba.  Of course the angle is free speech and the US government can’t do this, etc…  The basics are, a Brit living in Spain ran a few travel sites to Cuba on .com domains.  The US government didn’t like this and shut the sites down.  The argument is that the US government has no jurisdiction as the sites were not in the US.  But that’s wrong.

What most people fail to realize is that .com is a US domain, so the US does have rights over all the domains in the .com realm.  Doesn’t matter where that site is based, because the .com domain is managed in the US so guess what, you have a .com, doesn’t matter where you are, you are still under US law.  A lot of non US based people don’t seem to realize that .com is for the US, that other countries have their own.  Now if this Brit went with .co.uk, that’s another story, no US jurisdiction so he would be save there.  So yeah, on this one I think the government was in its rights to do what it did.  Now, was it a valuable use of tax payer money, that’s another issues all together!

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Filed under Business, Censorship, Globalization

I told you So, AIG

I love being right, well who doesn’t actually.  But I said in a recent post that the troubles at AIG were not over and they are not, once again, huge loses, AIG posted the worst quarterly lost in the companies entire history. 

 

You can expect that things are far worse than they are telling us.  A company of that size dragged down the entire sector on the Friday after the reported.  It is a good case for the Ma Bell treatment on AIG.  When companies get too big, it’s time to do some laser surgery and break them up.  Now I know Bush won’t do this because AIG is part of his base, but anyone can see that when companies get this big, they cause trouble by the very fact that there is plenty of room for the stupidity factor to up big time.

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Filed under Business, Globalization