Global labor arbitrage

The Jakarta Post today reports that

Indonesia’s labor costs, however, are still lower than that of China and Thailand, but higher than Vietnam. 

 The Post further reports that

a sizeable amount of investment from Taiwanese firms will soon enter Indonesia, not only in the sectors where investment is already ubiquitous, such as textiles, garments and footwear, but also in the high-technology industry.

and that

Taiwan is the ninth-largest foreign investor in the country, driven by the existence of big firms like Acer, Chinatrust Bank, Evergreen Group, Pao-cheng Shoes Co. and President Food.

In a nutshell, jobs will be shifted to Indonesia from China due to changes in relative wages. This is the essence of the global manufacturing sector now.

Gold!

The US Treasury reported on May 31, 2011 that US gold holdings amounted to 261,498,899 troy ounces.

See Ron Paul Hearing to Investigate U.S. Gold Reserves | Coin News.

Per the Federal Reserve website this gold is valued at roughly $42 per ounce for reporting purposes:

FRB: U.S. Reserve Assets and Foreign Official Assets Held at Federal Reserve Banks--December 2008 

At $1770 per ounce(today's price roughly), US gold holdings would be worth $462.8 billion; however at the current "book value" of $42 an ounce used by the Federal Reserve the valuation would be only $11 billion.

Here's a 5 year price chart for gold (from goldprice.org):

The US should clearly raise its "book value" for its gold holdings to at least a three digit number; the current book number is absurdly low.

American aging

The Census projects that in 2050 the largest age cohort will be women 80 years and older:

The chart shows a reversion to a pyramidal structure with the exception of the massive cohort of 80+ male and female.  If you are 80 in 2050, that means you were born in 1970.  Looks like U2 and REM royalties will be rolling in for a long time to come...

Auto financing and consumer credit

Average financing for new cars:

It appears that $28,000 is roughly the effective credit limit in recent years.  Assuming an interest rate of 9.99% and a 72 month loan term the monthly payment works out to roughly $519.00.

Total consumer credit:

Auto financing is clearly a significant component of this metric.

US gasoline demand in decline

Gasoline consumption is still well  below the peak in 2007. 

Less driving and more fuel efficient vehicles on the road caused in part by sharply higher prices is the formula for what we are seeing in this metric.