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Has Wal-Mart Become Too Powerful?


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Here's the background...as you guys might be aware...the States and several Asian countries are pissed at the Chinese.

The State Administration of Foreign Exchange (SAFE) in China essentially sells it's currency, the Yuan on the world FX market, while buying the currencies of other countries. E.g. The US dollar, the Japanese Yen, the Euro etc.

It does this because this makes other currencies more expensive, while cheapenings its own. Net result. Chinese goods are cheap for other countries to buy and their exports are great. China runs a trade surplus.

Particular senators are concerned that the US trade deficit with China is spiralling out of control. Thus there has been pressure put on China to allow its currency to trade properly...e.g. at a point where it would become more valuable.

[url="http://news.bbc.co.uk/2/hi/business/4560371.stm"]http://news.bbc.co.uk/2/hi/business/4560371.stm[/url]

[url="http://www.guardian.co.uk/worldlatest/story/0,1280,-5013874,00.html"]http://www.guardian.co.uk/worldlatest/stor...5013874,00.html[/url]

The US govt. has recently placed a 27.5% tariff on Chinese Textiles and will look to extend the tariffs on other goods.

Personally, I think the shit will hit the fan soon. Because this won't be resolved. My reasons:

1. The Asian concept of "Saving Face" The Chinese will not do something just cos someone tells them to. That would show capitulation to someone else. You guys have seen "Rising Sun" right? You cannot lose face against your competitors. Same thing here. I can't believe US diplomats, who probably have the best training in the world aren't factoring in this in.

Sure enough, these were two statements from the Chinese prime-minister today:

[i]"The Renminbi's foreign exchange rate reform is the sovereign issue of China. We respect the order of the market economy, but we do not succumb to outside pressure"[/i]


[i]"It's normal we're having some difficulties in trading with the United States, but [the difficulties] should not be politicised. [Any problems should be] solved through consultation, under the principles of equality, mutual benefit and development. [Rather than] mixing economic and trade problems with politics..."[/i]

Another factor that could make this messy...China has an unusual ally within the States.

WAL-MART.

This stat still blows me away. In 2003, [b]WALMART was China's 5th largest trading partner![/b] 1 SINGLE COMPANY RANKED 5TH GLOBALLY! I'd only assume that this has risen since then. One buddy in the States who's in corporate banking covers Walmart. He goes down to Arkansas monthly. He was telling me that at a meeting with them, they told him that if you were a manufacturer not producing in China, you really shouldn't expect to win any orders from Walmart.

Can you imagine how furiously the squadron of Walmart lawyers and lobbyists in DC is working right now to essentially tell the Bush administration..."WTF! you get the yuan to inflate, we have to pay more, and then we can't pass these savings on to the American consumer." Same thing with stores like HomeDepot.

Even though Walmart is aggresively expanding stores in China. Their sales there are miniscule compared to how much they buy. A rising Yuan would have them pissed.

Sure enough, today, Walmart's lawyers already made it known that they are against this legislation as it "violates the free market legislation and systems that have made America the world's pre-eminent economy"

Sam Walton's descendants still have a lot of pull in the nation's capital.

What can you do when legislation (the wrong kind in my opinion) hurts the biggest company in your country?

Isn't it worrying when a company has so much scale and lobbying power, that it can possibly influence the trading rules for every other company and the rest of the economy.

What do you think? Has Walmart become too big? Would you force it to buy non-Chinese goods, and then raise the prices for it's consumers? Possibly hurting a lot of it's client base?

I'd be interested in what you guys think.
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i work in an industry where chinese crap is starting to flood a maket where the products were traditionally made in the US, Italy, Canada and other countries not associated with "cheap" labor. The stuff being brought in is so crappy that it normally would not be sold but it is so cheap that it is hard to ignore.
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Guest bengaljet
I know the Kroger Stores in this town are worried about a Wal-Mart coming to town(42,000).There is (1) 15 miles North and (1) 15 mi South of town. There are (6)Wal-Marts in Columbus. They come to town ,sell sometimes under cost to drive out competition-then when competition is gone raise prices to make a profit. Fair or not -you decide.
Have heard that even full-time employees don't have healthcare(Kroger's does).Heard that Wal-Mart tells the employees how to get Gov't assistance for healthcare(US taxpayer pays for it). Hell,I think they should hire all the ILLEGALS from the mexican border cause now the ILLEGALS HAVE Healthcare($1 billion signed last wk for this-US GOV'T)---Kill 2 birds with 1 stone. We could learn to speak Spainish.
This is one of the problems of the Trade Deficit and we've had RECORD TRADE DEFICITS. You may not work at a competitor of Wal-Mart ,but eventually it will effect everyone ,IMO.
I won't shop at Wal-Mart,but do what you have to do.
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Isn't this a bit alarmist? I mean, it isn't like cheap goods from abroad is a new concept...remember when Japanese cars were fairly shitty but sold well because they were cheap, and now Nissans, Toyotas, etc make BETTER cars in most market segments (especially the small-car segment) than their US automaker counterparts, and they are often MORE expensive?

hell, if you want to blame anyone/anything, blame unionized labor in the US...it's original inception was an honest one, to provide fairness in treatment and pay for the American worker, but now the pendulum has swung too far the other way and they've become too powerful, driving up the cost of American-made goods while an equal uptick in quality hasn't kept pace with rising costs.

Guys making $17 an hour to turn a screw in an auto assembly line are WAY overpaid, and that is thanks to union-guaranteed salaries...how can we compete with Chinese workers who will work for literally nothing by comparison?

I'm sure our Government is working hard and fast to come up with a solution that is equitable for all sides...have a little faith...
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Guest bengaljet
[quote name='Bunghole' date='May 18 2005, 06:17 PM']Isn't this a bit alarmist?  I mean, it isn't like cheap goods from abroad is a new concept...remember when Japanese cars were fairly shitty but sold well because they were cheap, and now Nissans, Toyotas, etc make BETTER cars in most market segments (especially the small-car segment) than their US automaker counterparts, and they are often MORE expensive?

hell, if you want to blame anyone/anything, blame unionized labor in the US...it's original inception was an honest one, to provide fairness in treatment and pay for the American worker, but now the pendulum has swung too far the other way and they've become too powerful, driving up the cost of American-made goods while an equal uptick in quality hasn't kept pace with rising costs.

Guys making $17 an hour to turn a screw in an auto assembly line are WAY overpaid, and that is thanks to union-guaranteed salaries...how can we compete with Chinese workers who will work for literally nothing by comparison?

I'm sure our Government is working hard and fast to come up with a solution that is equitable for all sides...have a little faith...
[right][post="93915"]<{POST_SNAPBACK}>[/post][/right]

I'm not alarmed about Wal-Mart,just choose to not shop there.You go if you want.
During the Reagan Administration they did a survey comparing Japanese Automakers to US makers. The problem they found was in the ratio of blue collar workers to white collar workers. US ratio(blue collar to white collar) was 10-1(carrying a lot of dead weight?) and the Japanese ratio was 200-1 white collar.

Toyota of Georgestown KY pays their workers very well-assembly line workers make approx $50,000. This is 1 of the top plants in the WORLD with the majority being those US workers that can't or don't compete. Maybe they can compete if they aren't carrying dead weight.

Another view.[/quote]
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Guest mongoloido
[quote name='Bunghole' date='May 18 2005, 07:17 PM']Isn't this a bit alarmist?  I mean, it isn't like cheap goods from abroad is a new concept...remember when Japanese cars were fairly shitty but sold well because they were cheap, and now Nissans, Toyotas, etc make BETTER cars in most market segments (especially the small-car segment) than their US automaker counterparts, and they are often MORE expensive?[/quote]


I don't remember that at all. The Japanese weren't selling shitty cars in the States. After the War, my understanding was that the U.S. helped rebuild the Japanese factories and essentially gave them newer, better auto factories than we had. Coupled with intelligent auto design and the gas shortage of the seventies, Japanese vehicles outsold American vehicles because they were better vehicles that happened to also be cheaper.
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[quote name='bengaljet' date='May 18 2005, 06:07 PM']I know the Kroger Stores in this town are worried about a Wal-Mart coming to town(42,000).There is (1) 15 miles North and (1) 15 mi South of town. There are (6)Wal-Marts in Columbus. They come to town ,sell sometimes under cost to drive out competition-then when competition is gone raise prices to make a profit. Fair or not -you decide.
  Have heard that even full-time employees don't have healthcare(Kroger's does).Heard that Wal-Mart tells the employees how to get Gov't assistance for healthcare(US taxpayer pays for it). Hell,I think they should hire all the ILLEGALS from the mexican border cause now the ILLEGALS HAVE Healthcare($1 billion signed last wk for this-US GOV'T)---Kill 2 birds with 1 stone. We could learn to speak Spainish.
    This is one of the problems of the Trade Deficit and we've had RECORD TRADE DEFICITS. You may not work at a competitor of Wal-Mart ,but eventually it will effect everyone ,IMO.
  I won't shop at Wal-Mart,but do what you have to do.
[right][post="93908"]<{POST_SNAPBACK}>[/post][/right][/quote]
You seem to have a big problem with Mexican immigrants. IMO they are not the villains they are made out to be. There needs to be a solution, but they are not the reason why we have a budget deficit, a trade deficit, unemployment, or the economy not doing as well. I know this was already discussed in another thread, but I just noticed that every thread you post in, you manage to include the Mexican immigrants. Just an observation.
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Guest bengaljet
[quote name='jza10304' date='May 18 2005, 07:02 PM']You seem to have a big problem with Mexican immigrants.  IMO they are not the villains they are made out to be.  There needs to be a solution, but they are not the reason why we have a budget deficit, a trade deficit, unemployment, or the economy not doing as well.  I know this was already discussed in another thread, but I just noticed that every thread you post in, you manage to include the Mexican immigrants.  Just an observation.
[right][post="93931"]<{POST_SNAPBACK}>[/post][/right][/quote]

Don't like the part of ILLEGALS(could be terrorists included) and really don't like that the US gov't set aside $1B for Illegal Immigrants Healthcare.

I have nothing vs Legal Immigrants. I worked with a Mexican that was in the 1968 Olympics(he carried the Mexican flag into the Stadium-good guy). I was being sarcastic about Wal-mart + US policy for Healthcare.
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Walmart became too powerful for me when they stopped listening the the people they are selling to. I have one right around the corner from me that was just built in a major us highway. (Rt 1) People were complaining that it would cause more traffic (already high in my area) and were asking them to move it ONE street over....yeah its on Rt 1... way to listen to the consumer WalMart....sad thing is people are still going to it.
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[quote]Harvey Brown:Every Wall*Mart has a heart, somewhere near the television department. Destroy the heart and you could reverse the entire process! 
Cartman: You speak too much, sir! 
Stan: Why don't you guys just destroy the heart? 
Harvey Brown: Because the Wall*Mart stops you. Many have tried, kid. Union leaders, nature activists, even the best fair-trade lawyers tried to stop the Wall*Mart and now? They are Wall*Mart shoppers all. [/quote]

[img]http://images.southparkstudios.com/media/images/809/809_img_18.jpg[/img]

[url="http://images.southparkstudios.com/media/video/809/randy1.mov"]http://images.southparkstudios.com/media/v.../809/randy1.mov[/url]
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Very tough question.
Walmart has come into mexico and taken the competition out of costs.

Regular places like comercial mexicana, gigante and other stores are trying to rally around walmart, but there is just no way to stop it.

I think the best you can do is support the local producers in the local markets or stores. There have stopped being local stores around the corner because walmart has driven them out of business.

I like what walmart offers, but its just making capitalism, but in a way that the differences in classes become more alarming.
They are making sams inheritants more rich, and people that work in walmart more unhappy.

Its a vicious cycle almost imposible to stop.
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[quote name='mongoloido' date='May 18 2005, 05:57 PM']I don't remember that at all. The Japanese weren't selling shitty cars in the States. After the War, my understanding was that the U.S. helped rebuild the Japanese factories and essentially gave them newer, better auto factories than we had. Coupled with intelligent auto design and the gas shortage of the seventies, Japanese vehicles outsold American vehicles because they were better vehicles that happened to also be cheaper.
[right][post="93928"]<{POST_SNAPBACK}>[/post][/right][/quote]
You probably don't remember the late 70's model Civics, then...VASTLY improved cars now.....
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And just for the record, Wal-Mart will NEVER (and cannot due to their corporate philosophy) offer highly specialized items, such as unique grocery items, etc....
They are good for what they are, but they simply cannot or will not offer certain items due to their broad nature...try finding jicima in their produce aisle, for instance....if you don't know what jicima is, then don't bother...
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[quote name='mongoloido' date='May 18 2005, 06:57 PM']I don't remember that at all. The Japanese weren't selling shitty cars in the States. After the War, my understanding was that the U.S. helped rebuild the Japanese factories and essentially gave them newer, better auto factories than we had. Coupled with intelligent auto design and the gas shortage of the seventies, Japanese vehicles outsold American vehicles because they were better vehicles that happened to also be cheaper.
[right][post="93928"]<{POST_SNAPBACK}>[/post][/right][/quote]


still are
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[quote name='Jamie_B' date='May 19 2005, 04:24 PM']Just thought Id add this...

[url="http://www.msnbc.msn.com/id/7901047/"]http://www.msnbc.msn.com/id/7901047/[/url]
[right][post="94264"]<{POST_SNAPBACK}>[/post][/right][/quote]
thats what i like to hear
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SWD;

I agree, this is a serious situation. I like your Wal-Mart comments because that, to me, goes to the core of the problem. Remember the days when Wal-Mart promoted itself as patriotic, "American-made", etc...? I guess profits got in the way of that campaign pretty quick!

I've been following this story for a while and here are a few observations:

1) I'm sure "face" has a lot to do with the Chinese reluctance to float the renminbi; I also suspect that they are hard-nosed enough to not fall into the trap that the Asian Tigers did.

2) When I heard this week's racheting-up of rhetoric, the first thought to cross my mind was: Does this have anything to do with the fact that hedge funds have been unwinding over the past week or so? The timing is interesting.

3) I think the Wal-Mart model of doing business is ultimately bad business. Driving down prices for the sake of driving down prices eventually leads to a lot of disruption in the marketplace. The problem is, what happens when people can't even afford the low prices because they are unemployed or underemployed? What happens to the companies which have their vendor's prices imposed on them by major customers like Wal-Mart? (This happens in a lot of industries; I know a fellow who performs this task for GE.)

4) What most people don't understand is that currency is (or ought to be) a sovereign affair. In international affairs, currencies ought to be pegged within ranges to facilitate the trade of goods and not to create advantages for arbitrage.
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Guest mongoloido

[quote name='Bunghole' date='May 18 2005, 11:54 PM']You probably don't remember the late 70's model Civics, then...VASTLY improved cars now.....
[right][post="94006"][/post][/right][/quote]


Sure I do. But I also remember the Chevettes, Pintos, Gremlins and serious poop that was being put out right here in the U. S. of A. :) Civics were no more crappy than those, and you can still find a Civic from that era on the road from time to time. How many Citations do you see out and about anymore?

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[quote name='mongoloido' date='May 19 2005, 11:26 PM']Sure I do. But I also remember the Chevettes, Pintos, Gremlins and serious poop that was being put out right here in the U. S. of A. :) Civics were no more crappy than those, and you can still find a Civic from that era on the road from time to time. How many Citations do you see out and about anymore?
[right][post="94430"][/post][/right][/quote]
Goddamitt, go play some more Counter Strike...and I drive an 88 Aries with 4,256,357 miles on it...a former govt car....



:angry2: :( :) :P :D :blink: :blush: :blush: :blush:

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Guest steggyD
I'm afraid of Wal-Mart. I don't understand how the store attracts some of the ugliest people in the world. Sorry, but I'm very handsome and I can't stand to see a bunch of ugly people gathered in one place. It really disgusts me. And for some reason, if I buy something at Wal-Mart, it seems to break before I want it to. Some examples of quickly breaking items: bicycle pump, fishing reel. And I bought a helmet for my daughter's head when she bikes, the fuckin' helmet wouldn't even strap properly to her head.

Wal-Mart should be banned, it is an insult to our intelligence. People, please stop going there. It should only be for fans of "professional" wrestling.
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