Rogue - China Peg
I read all of your posts about the death of the dollar and death of our standard of living. I want to tell you a story that is unfolding for my company today.
We make a product for fertilizer and animal feed called zinc sulfate. It provides supplemental zinc to plants and animals to promote healthier yields in both.
15 years ago it was a great business. We get raw material from galvinizer's waste and brass mill fume. Then along come the cheap products from China and our raw materials start to dry up do to our suppliers going out of business. For the past 6-7 years, until 9 months ago the Chinese flooded the US with cheap zinc sulfate and almost put us out of business. Then it happened, the dollar went down against many currencies and the zinc metal price nearly doubled. Today, we are seeing almost no Chinese product coming in leaving a 30% or so hole in supply that we are trying to fill. We are back on solid ground and are going to be big time profitable this year. We actually exported a 20 ton container to China from Nebraska, got a smoking frt rate on a WAL-MART container backhaul. We are going to borrow money to expand the plant soon, and buy new equipment, and hire more semi skilled labor. All of this in good old heartland USA.
I think you have things way too one sided in your mind. For every action there is an equal reaction. What if our company borrows money from your bank, your bank pays interest back to you, then we hire your brother to work for us, sell our product to your neighbor the farmer, who then sells his eggs to the store your wife shops at, and the surplus grain goes to China, then I take my profit and go buy a car made in the USA because the ones from China cost 30% more.
Anyway, none of us can possibly figure out what is going to happen in the longer term so I don't get too cranked up over it. I try to raise good kids, work hard everyday, do something good for other people, and go fishing in my spare time.
I predict the world as we know it will still be here next year and we'll be hashing over all of the same topics only in different order. Oil, Terror, China, Power Grid, Healthcare, Realestate, Iraq, Gold, Global Warming YOU NAME IT!
Oh, one more big worry, we are only one major crop failure away from a grain shortage!
Good Luck,
Kipp
