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	<title>Comments on: Consumer Electronics</title>
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	<link>http://calpolymbatrip.com/2008/china/consumer-electronics/</link>
	<description>The MBA Graduate Program at Cal Poly</description>
	<pubDate>Thu, 20 Nov 2008 18:01:27 +0000</pubDate>
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		<title>By: Gary Chou</title>
		<link>http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5121</link>
		<dc:creator>Gary Chou</dc:creator>
		<pubDate>Thu, 08 May 2008 00:28:48 +0000</pubDate>
		<guid isPermaLink="false">http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5121</guid>
		<description>I have talked about this several times before...and this is just reaffirming my postulate that according to the second law of thermodynamics, the entropy of an isolated system which is not in equilibrium will tend to increase over time, approaching a maximum value at equilibrium.

The global economy is an isolated system and is not in equilibrium: some countries have far lower quality of life (measured in household income per capita) than others. But the law dictates that this unevenness, like ALL unevenness, will quickly dissipate over time to a state that the system becomes completely even (disordered). No further exchange of energy or movement of particles could result in a more disordered (even) state.

In the global economy, this means all wealth generated from trade will go toward zero to a point that every country is equally rich with one another.

We are at a very uneven state (low entropy, high ordered), so America can profit from cheap labor of China while China moves up in its wealth.

As China moves up, the very source for its progress--its cheap labor--decreases. When China reaches the same level of wealth--when its labor is the same price as America--no further exploitation could take place. China and America then must exploit another country who is not at equilibrium, such a India. This process will continue until the world becomes even (most disordered).</description>
		<content:encoded><![CDATA[<p>I have talked about this several times before&#8230;and this is just reaffirming my postulate that according to the second law of thermodynamics, the entropy of an isolated system which is not in equilibrium will tend to increase over time, approaching a maximum value at equilibrium.</p>
<p>The global economy is an isolated system and is not in equilibrium: some countries have far lower quality of life (measured in household income per capita) than others. But the law dictates that this unevenness, like ALL unevenness, will quickly dissipate over time to a state that the system becomes completely even (disordered). No further exchange of energy or movement of particles could result in a more disordered (even) state.</p>
<p>In the global economy, this means all wealth generated from trade will go toward zero to a point that every country is equally rich with one another.</p>
<p>We are at a very uneven state (low entropy, high ordered), so America can profit from cheap labor of China while China moves up in its wealth.</p>
<p>As China moves up, the very source for its progress&#8211;its cheap labor&#8211;decreases. When China reaches the same level of wealth&#8211;when its labor is the same price as America&#8211;no further exploitation could take place. China and America then must exploit another country who is not at equilibrium, such a India. This process will continue until the world becomes even (most disordered).</p>
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		<title>By: Shasta Palmer</title>
		<link>http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5120</link>
		<dc:creator>Shasta Palmer</dc:creator>
		<pubDate>Wed, 07 May 2008 18:03:40 +0000</pubDate>
		<guid isPermaLink="false">http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5120</guid>
		<description>If prices on electronics go up, how much do they have to go up before factories bring business back here? I think with us outsourcing so much stuff to China and letting them build the infrastructure we are setting ourself up for some major issues. We are making it where our dollar is decreasing in value and we are outsourcing everything that requires equipment. Therefore, we don't have the structure or the equipment to produce these things anymore. So, what happens if prices do go up? Do we have the money, technology and manpower to make our own if we ever to? Equipment isn't just something you set-up easily and start producing. It takes lots of time and money to set-up and take down industries. Given, everything can't be set-up on what if's, but there should be some thought about this as we continue buying all these goods from China and don't keep up on technology here.</description>
		<content:encoded><![CDATA[<p>If prices on electronics go up, how much do they have to go up before factories bring business back here? I think with us outsourcing so much stuff to China and letting them build the infrastructure we are setting ourself up for some major issues. We are making it where our dollar is decreasing in value and we are outsourcing everything that requires equipment. Therefore, we don&#8217;t have the structure or the equipment to produce these things anymore. So, what happens if prices do go up? Do we have the money, technology and manpower to make our own if we ever to? Equipment isn&#8217;t just something you set-up easily and start producing. It takes lots of time and money to set-up and take down industries. Given, everything can&#8217;t be set-up on what if&#8217;s, but there should be some thought about this as we continue buying all these goods from China and don&#8217;t keep up on technology here.</p>
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		<title>By: Pierre Michael</title>
		<link>http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5110</link>
		<dc:creator>Pierre Michael</dc:creator>
		<pubDate>Mon, 05 May 2008 05:41:55 +0000</pubDate>
		<guid isPermaLink="false">http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5110</guid>
		<description>Seems like quite the dilemma. If US companies start raising their prices to cover their higher oil costs and increasing Chinese costs, demand will decrease. As demand decreases prices will rise even higher. Most companies are reluctant to raise their prices significantly because they know that their price sensitive customers will start to dwindle in numbers. Since companies want to remain competitive in this highly elastic industry, and since price fixing is illegal due to antitrust laws, I envision companies will be slow to raise their prices as they wait to see what their competitors are doing. I think prices of consumer electronics will indeed rise gradually, but so are all other products in other sectors, as well as salaries. This can just be viewed as a form of international inflation. The falling strength of the dollar sure isn't helping.</description>
		<content:encoded><![CDATA[<p>Seems like quite the dilemma. If US companies start raising their prices to cover their higher oil costs and increasing Chinese costs, demand will decrease. As demand decreases prices will rise even higher. Most companies are reluctant to raise their prices significantly because they know that their price sensitive customers will start to dwindle in numbers. Since companies want to remain competitive in this highly elastic industry, and since price fixing is illegal due to antitrust laws, I envision companies will be slow to raise their prices as they wait to see what their competitors are doing. I think prices of consumer electronics will indeed rise gradually, but so are all other products in other sectors, as well as salaries. This can just be viewed as a form of international inflation. The falling strength of the dollar sure isn&#8217;t helping.</p>
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		<title>By: Brandi Eng-Rohrbach</title>
		<link>http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5109</link>
		<dc:creator>Brandi Eng-Rohrbach</dc:creator>
		<pubDate>Mon, 05 May 2008 04:53:38 +0000</pubDate>
		<guid isPermaLink="false">http://calpolymbatrip.com/2008/china/consumer-electronics/#comment-5109</guid>
		<description>I'm not sure if it will raise all prices.  What if in a slower economy companies start price wars to move product?   I mean if you have a lot of inventory that is going to be obselete in a few months which is the case with consumer electronics why not try and move it?  Here's a &lt;a href="http://gizmodo.com/385729/dealzmodo-ahoy-hdtvs-will-get-stupid-cheap-next-month" rel="nofollow"&gt;blog&lt;/a&gt; that says TVs will get a lot cheaper in a month.</description>
		<content:encoded><![CDATA[<p>I&#8217;m not sure if it will raise all prices.  What if in a slower economy companies start price wars to move product?   I mean if you have a lot of inventory that is going to be obselete in a few months which is the case with consumer electronics why not try and move it?  Here&#8217;s a <a href="http://gizmodo.com/385729/dealzmodo-ahoy-hdtvs-will-get-stupid-cheap-next-month" rel="nofollow">blog</a> that says TVs will get a lot cheaper in a month.</p>
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