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65 comments on Inflation and oil price shocks

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Stuart Staniford on October 10, 2005 - 12:25pm Permalink | Subthread | Comments top
There may be some truth to the idea that wages in the US will be held down by the continued possibility of outsourcing for some time to come. However, that's only likely to worsen our trade deficit, which is itself inflationary (as it's got to put downward pressure on the dollar at some point). Also, wages in India and China are rising very rapidly as the demand for skilled people in those economies is great. Even unskilled labor is rising quickly in the cities. That's eventually likely to feed back into rising prices for goods (though perhaps not for some time, as there is still quite a bit of potential for more offshoring).
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Glenn on October 10, 2005 - 12:53pm Permalink | Subthread | Parent | Comments top
Stuart, I agree the globalization process is particularly different when viewed through a peak oil lens. I argued for WTO, NAFTA, etc because I always thought that it was big industry that would benefit the most from higher tarriffs. For instance, imagine how little incentive GM & Ford would have to increase production of hybrids if we had huge tarriffs on Japanese hybrid imports.

However, through globalization we are mothballing domestic production capabilities that will be essential as A. The dollar weakens B. Transport becomes ever more expensive C. Each region has to become more self-sufficient in food, energy, goods.

I have to say that I'm now feeling pretty negative about the WTO model of world trade. We should keep some industries capable of ramping up to meet domestic needs in a crisis.

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Stuart Staniford on October 10, 2005 - 11:54pm Permalink | Subthread | Parent | Comments top
I tend to the view that globalization is going to be more attractive post peak than a lot of people think (unless we experience a major collapse). We need to remember that ship transport is roughly 100 times as energy efficient per ton-mile as road transport. So for example, here in San Francisco we're going to be almost as close to Mumbai or Shanghai or Tokyo as we will be to New York, energetically, and much closer to them than we will be to, say, Denver.
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r4ndom on October 11, 2005 - 11:02am Permalink | Subthread | Parent | Comments top
In addition, there are more options for powering ships than
land transport. Ships can run on any solid or liquid fuel,
as well as wind. For land transport only rail approaches the
versatility and efficiency of sea transport.
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Rick on October 13, 2005 - 5:10am Permalink | Subthread | Parent | Comments top
Lest we forget: really big ships (and submarines) can also run on nuclear power.
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jhm on October 11, 2005 - 6:24am Permalink | Subthread | Parent | Comments top
Let's hope it leads to political reform if China as well.
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65 comments on Inflation and oil price shocks

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