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Sunday, January 6, 2008
If outsourcing is ended, U.S. Economy might hit deep recession
It is the Era of Globalization.
One has to accept that developing countries would be exporting at much lesser prices, much lesser than the Euro or the U.S. $. price tag, be it on textiles or be it cars.
But then, at the same time, to stay afloat / make more profit, developed countries' companies have resorted to "outsourcing"......this is NECESSARY.......as it doesn't take much for a rival company to beat you....it can steal the thunder in 2 quarters.....
It is the "outsourcing" which has kept the U.S. economy afloat.
Let's take a look at the stock charts for the last 5 years
Image source: finance.yahoo.com
If we look at the Dow Jones Industrial Average for the last 5 years,
the profit percentage is much lesser than the Indian stock market.......it is apparent from the "COMPARATIVE STEEPNESS" of the 2 curves. The Indian stock markets had a far greater higher RETURN.
Even if you look at the 5 year chart (Image source : finance.yahoo.com ) of Singapore Straits, it shows a steady rise.......
Which is why, U.S. global investors are pouring in funds into Emerging Markets.
Again, one has to keep in mind, that the U.S. economy is doing this well primarily due to outsourcing.
If the Democrats come to power, and put an end to outsourcing.....rival European companies would start "outsourcing" to developing countries........and even some U.S. companies would find a way around to beat the others.