... and be sold at cheaper prices than items produced locally?
How Can Goods Be Shipped Across Oceans...
- Thread starter thoughtone
- Start date
I'm not sure I totally understand your question. But the way our corporations in the US do it, is as follows:
lets say to produce product X locally, it costs $10.
to have it produced in some third world country it costs .75 cents
They then have it mass produced in that 3rd world country and from there, have it shipped to whatever country they plan to sell it. Shipping & import costs probably add a couple dollars to the cost per product, but overall its usually significantly cheaper.
But here's kicker, Bush also implemented incentives and tax breaks for companies that do this. So not only is it a win in production costs, you also pay less taxes as a result.
I always wondered this question for a long time, years, decades.
One day, a guy explained it to me. It is very long-winded and complicated, but basically it boils down to this.
The United States and England setup a system in 1945 called Bretton Woods. Under this sytem, the United States would be the world reserve currency with the pound sterling being like a co-reserve.
This meant the highest valued currency in the world would be the pound sterling and next the dollar.
Since the dollar and pound sterling MUST BE OVERVALUED to be a world reserve currency, all currency in every other country is necessarily undervalued.
In 1945, the only nation with an intact manufacturing sector was the United States. So, the world relied on the good ol' US of A to provide the manufactured goods until they could rebuild their economies.
By 1970, many countries caught up with the United States, which caused manufacturing and jobs to start leaving. To get around this, the United States made sure oil was traded in dollars and pound sterling.
By 2010, the whole world (just about) is more competitive than the United States. Yet, the United States and Great Britain still want to be the world reserve currency to control the oil.
But, the days of cheap imports are numbered, and eventually manufacturing will return as the dollar and pound sterling devalue into oblivion.
One day, a guy explained it to me. It is very long-winded and complicated, but basically it boils down to this.
The United States and England setup a system in 1945 called Bretton Woods. Under this sytem, the United States would be the world reserve currency with the pound sterling being like a co-reserve.
This meant the highest valued currency in the world would be the pound sterling and next the dollar.
Since the dollar and pound sterling MUST BE OVERVALUED to be a world reserve currency, all currency in every other country is necessarily undervalued.
In 1945, the only nation with an intact manufacturing sector was the United States. So, the world relied on the good ol' US of A to provide the manufactured goods until they could rebuild their economies.
By 1970, many countries caught up with the United States, which caused manufacturing and jobs to start leaving. To get around this, the United States made sure oil was traded in dollars and pound sterling.
By 2010, the whole world (just about) is more competitive than the United States. Yet, the United States and Great Britain still want to be the world reserve currency to control the oil.
But, the days of cheap imports are numbered, and eventually manufacturing will return as the dollar and pound sterling devalue into oblivion.
