What does it all mean?

Well, I haven't read any of the links but I can tell you what production shifts out of china mean. Because the Chinese economy is moving out of the third world people are expecting higher wages, which means labor costs go up for manufacturers, which means the manufacturer now has incentive to move some place cheaper.

And I'll channel Dr. Toshi here for a bit and say that IMHO I think its going to be good for us as a country to have gas prices go up. Maybe not to the levels that Toshi is praying to the FSM for, but they need to go up. It will be good for the bike industry, get fatties out on a bike who then don't put such a strain on health care, cut emissions, and hell, just might even help convince your local government do something about putting in more bike lanes and green ways.

I was going to say higher gas prices would be good for the country, as it will cost more to ship goods into the country (especially with a weakening dollar). Additionally, higher gas prices will lead to build out of public transit systems, which means dollars towards construction and an increase in employment to a majorly under-employed sector.

My one concern with regards to a build out of public transit however is the stangle hold of those unions over the system. We are experiencing that problem in SF where the unions are the third highest paid of all public transit systems, but the system is rated as one of the worst in the counrty. Couple that with the size of their budget and it's pretty clear where the money isn't going.

Pesqueeb said:

And I'll channel Dr. Toshi here for a bit and say that IMHO I think its going to be good for us as a country to have gas prices go up. Maybe not to the levels that Toshi is praying to the FSM for, but they need to go up. It will be good for the bike industry, get fatties out on a bike who then don't put such a strain on health care, cut emissions, and hell, just might even help convince your local government do something about putting in more bike lanes and green ways.

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It will be a while.
People will give up just about everything else to keep their car. And view bikes as silly toys.
I have seen an increase in people commuting by bike, but in my city, its still extremely dangerous and pretty unpleasant...

According to my Chrome history I've only read 2 of those, but I will definitely read the rest shortly... I will say that I've been in the industry for 2 of the gas spikes (2004 or 2005? First time it went above $3/gallon, and 2008 when it went up to $4.50/gallon), and each time sales of bikes SKYROCKETED. The first time it happened our sales were pretty robust, but in 2008 it was literally almost impossible to find a hybrid under $1,000. Companies across the US were actually sold out, and bike shops had trouble finding anything from anybody.

Going forward it's definitely going to be interesting, because even with the vast number of bikes sold each year, the number that actually *are* used for utilitarian purposes is relatively small (comparatively). Here in Madison, WI (a *very* bike-friendly town) it's still only estimated that 5-7% of people use them to get to work. If an extra 3-4% of the population starts buying bikes to ride to work, that would be a 50% increase in the amount of cyclists out commuting to/from work.

The downside obviously is infrastructure and overall environment. My parents live in a suburb of NYC, and yet the roads in Westchester are so narrow, so twisty, so hilly and so unsafe that gas could reach $10/gallon and they still wouldn't be able to ride anywhere. It's just not possible. Here's a section google street view of the road that they'd have to ride, and bear in mind that it's a relatively steep hill and the car are doing 35-40mph.

But I think that there's a ton of growth potential out there. Urban environments, suburban environments that are flat/good shoulders/temperate climate, close amenities, etc. Gas prices are a very psychological thing, whereas people *think* that they spend far more on it than they do. They don't see daily gas use (or spending), but rather they see the once-per-week fillup.

Example:

Joe owns a car that gets ~25mpg, and lives ~25m away from work, so he uses one gallon of gas in the morning, and one gallon in the evening. Gas prices "skyrocket" from $3 to $4/gallon. He's spending an extra $2/day on gas, which shouldn't seem like much. However, when he buys 15 gallons of gas every week, he's paying $60 instead of $45. *That* is enough to make him go absolutely crazy, and start complaining to the first news crew he can find...

TRUMP on China.

^^^^ Trump is the only person on the right that's advocating a 25% tariff (ok, ANY tariff) with China. From an industry person, I think that would fail, and fail HARD:

1) Production would just move elsewhere. Clothing already has. Very little clothing is actually made in China (comparatively), since it's already moved to Indonesia, Vietnam, Pakistan, Laos, etc. I've got a pair of Levi's made in Sri Lanka, and another pair made in Mexico. I think Nike has massive new factories in Vietnam. True, some of it would keep prices higher (bikes for the EU specifically have to be made in Taiwan to avoid anti-dumping, which keeps the prices of bikes higher than in the US), but most of it would just move to another 3rd world country.

2) There's no incentive to build here in the US. Regardless of the dollar/yen/RMB/NTD/etc, the cost of living is higher here, salaries are higher here, the environmental restrictions are higher here, land/space is more costly here, etc.

3) For bikes, even if you did want to "build" them here, sourcing parts/components would make it extremely difficult. Cockpit parts are made in Taiwan/China. Saddles are made in Taiwan/China. Drivetrain is made in Japan/Indonesia/China. It would come down to the fact that you could manufacture the frame here in the US, and then just import all of the parts to put on it from other countries. That's not exactly what I'd call "manufacturing in the US".

4) It would cause mass inflation. Suddenly every single product you buy would cost 25% more (or greater, depending on whether the 25% is put on at the retail level or at the manufacturing level. 25% tariff x manufacturers profit margin x distributor profit margin x retail profit margin = HOLY CRAP). When prices go up, people demand higher salaries to continue buying the same products.... ie, inflation.

5) It would be political suicide. "Dear constituents, I'm passing a bill that will raise the price of everything you buy at WalMart by 25%. Don't worry, several years from now you might be in a better place from an overall economic standpoint if manufacturing doesn't just shift to other 3rd world countries..."

If anything, we just need to officially declare China a currency manipulator and be done with it. Take the lumps that come with it, and know that overall it's a long-term healthy act for the American economy. Unfortunately I doubt that will ever happen............

Ride moar = complain less

dante said:

2) There's no incentive to build here in the US. Regardless of the dollar/yen/RMB/NTD/etc, the cost of living is higher here, salaries are higher here, the environmental restrictions are higher here, land/space is more costly here, etc.

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So how does Germany build sh*tloads and have such a strong export trade of finished/value added products?
Their land is more expensive than yours, they are very well paid, their environmental laws make America's looks nonexistent in comparison.

DaveW said:

So how does Germany build sh*tloads and have such a strong export trade of finished/value added products?
Their land is more expensive than yours, they are very well paid, their environmental laws make America's looks nonexistent in comparison.

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They actually have proper manufacuting and products worth exporting for which there is demand.

The Joker said:

They actually have proper manufacuting and products worth exporting for which there is demand.

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Aaand coming back to Dante's point..... What are their incentives to do that which you don't have inspite of being able to do so in a cheaper, lower regulatory environment in the states?

DaveW said:

Aaand coming back to Dante's point..... What are their incentives to do that which you don't have inspite of being able to do so in a cheaper, lower regulatory environment in the states?

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Comeon, they're German. That means they are either weird sex fetish freaks or perfectionist engineers.





I guess they could also be both.