Wow "Where the World's Unsold Cars Go To Die"

[thomascovenant]

www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die

[axis16666]

Wow

[Paradoom]

Lol nice hoax!

[Mister Pin]

You think so? Look at all the cities China has built- complete with malls etc., that no one lives in. . . hoax? All this to keep the economy from collapsing. Every ones economy. . . .Can anyone say "Pop!"

[Paradoom]

Where are the geograhpical koordinates or the exact adresses of those locations? Why are there clearly photoshoped pictures in that "report"?

And if China goes down it will surely hurt the world. But on the other hand it will be another example of a failed communism attempt, from which the rest of the world hopefully finally learns.

[Enius the White]

Most industries rely heavily on manufacturing scale in order to reduce per-unit production costs. This structure extends from the factory design, all the way up the supply chain. Imagine what it would cost you to buy one car, if you had to order the parts individually, and pay a mechanic to assemble them for you.

In 2009, after the economy went south, car sales took a large hit. People's favorite vector for buying expensive items (i.e. borrow cheap money against their real estate), all but evaporated along with real estate equity values, and generous lending practices. This created a sizable inventory glut of automobiles, as factories continued to work through some longer lead time supply inventory that would be costly to curtail earlier. Normally, these short term over supply situations are absorbed by the vast dealership networks, where the car lots act as de facto storage warehouses when called upon. In 2009, this storage capacity was exceeded, and some creative inventory storage solutions were enacted.

In short, those pictures are largely real, but some probably dated back to 2009. Even normal factory/port inventories can look pretty impressive sometimes. I don't doubt that there was also an element of "keep those factories running if you want your bailout pork" policy direction in 2009.

That said, we are not out of the murky economic woods yet. Emergency ultra-low interest rates, that were enacted after 2001, have stuck around as the U.S. (and much of the world) economy just cannot ween itself off. How and when this will ultimately play out is difficult to predict, as there are several virtually unprecedented economic "juggling" dynamics at play.

While no country is exempt from broad, harsh global economic shocks, I am less bearish on China than you Doom. I'm no fan of their political structure, or human rights policies, but their economic problems are largely "growing pain" related, and they promise to continue to develop as a dominant world economic super-power, whether we like it or not.

[FunkySwerve]

Yes, those photos are all circa 2009 during the massive global recession. It's fairly telling that there are a bunch of right-wing nutters on there ranting about Keynesian economics, when in fact that would be a case of supply-side run amok - if it were true.

Fortunately, it isn't: www.snopes.com/photos/automobiles/unsoldcars.asp

Most right-wing politicians don't actually buy into supply-side econ enough to do anything leading to something as nutty as this. They mainly use it to stir up their economically-ignorant base. See, e.g., the comments to the original thread talking about 'command economies'.

Funky