At MadeinUSAForever.com we have nearly 1000 products from over 100 suppliers. Most are facing significant pressure from cheap Chinese imports. Business is tough, but most are hanging on by focusing on high quality.
Unfortunately, that formula is not enough for every supplier. Wicks N’ More, our supplier of very high quality, premium candles folded without warning at the end of October. They let go all 50 employees and completely shutdown, hitting the small Mississippi community where they manufactured hard.
This bad news surprised me, as they seemed to selling a lot of their fine candles. Our prayers and good wishes go out to their former team and the many families affected.
Next time I see a cheap, imported candle I will have to again think of those families facing a dire future just before the holiday season.
Every product made here in America is made by real Americans who not only create something great, but take that paycheck home to their families. The stakes are for real. Another great reason to buy American made.
According to The Wall Street Journal, the FDA finally took action to restrict Chinese milk based products.
Months after evidence surfaced, and indeed after 13 smaller Asian nations already took action, our Food and Drug Administration finally restricted milk based food imports from China. Unfortunately, this is not a ban, as importers simply provide testing statistics that Melamine content is below 2.5 particles per million. The response has been shockingly slow, and that threshold is way too much. Even Taiwan allows much less than 2.5 particles of melamine per million, at 0.5 parts per million.
No action was yet taken on eggs or other products where real evidence on animal feed has been shown to have been poisoned with Melamine.
How much food do we import from China? According to the UN Statistics Division, $3,800,000,000 worth of wholesale food was imported into the USA from China last year. Very roughly, that is about 120 servings of food products per American in 2007 that could have contained some food from China, or about 10 per month for every American.
However, that may substantially underestimate other ingredients that end up in food products here, like the whey (wheat based product) that was laced with melamine added to pet food that was implicated in the deaths of thousands of pets here in America.
Why has the FDA response been so slow compared to 13 smaller Asian nations, which apparently have their act together? Why no action on the eggs, etc., when even Wal-Mart in China is pulling eggs off shelves? Is the FDA lacking competence, appropriate urgency, or is this another way our government does not want to offend China? Whatever the reason, people’s health has been put at risk.
We need serious change in the way food safety of imports is handled, and we need it now. Politics must not get in the way of food safety.
The yield on 10 year treasury notes is a key gauge of the economy. This is the rate that our government pays to borrow money for a ten year period and is widely followed and used by banks, corporations, etc.
Typically this interest rate follows closely what the Fed says interest rates should be, based what the Fed does with their target rate. The problem is this interest rate is not behaving anymore. While the Fed has been guiding a reduction in the target interest rate, the actual interest rate the government has to pay on ten year notes has risen sharply the past few weeks. According to The Wall Street Journal, the rate has climbed during the last several weeks from 3.43% to 3.97%.
“Experts” are calling it a mystery, but it simply shows a decreased willingness from those who buy these bonds (i.e. loan our government money) to continue to fund our ballooning debt.
Who buys this debt? A lot of people, insurance companies, etc., but most importantly in recent years, foreign investors from Japan, Korea, and particularly China lately. They each have a huge trade surplus with the USA, meaning we import vastly more goods from them than they buy from us. These massive trade imbalances cause these Asian countries to end up having large hoards of our dollars. A lot of end had been invested in “safe” debt issued from our government.
Why the sudden loss of appetite for our debt? The problem is they are beginning to suspect our debt is not perfectly safe. A natural conclusion when $700 “bailout” plans are passed with almost no debate or detail. Plus, with falling government revenue projections, it is likely our annual deficit spending will double from today’s level to $1 trillion annually within a couple years.
The media and politicians speak like the government is unquestionably solid, and apparently can now backup every bank, insurance company, corporation and mortgage in the nation. I would not be surprised if some politicians shortly start talking about a credit card bailout soon.
The problem this point stops being just economic, and starts being something we can see through basic physics as well – for every dollar of increased spending, that dollar must be borrowed in a time of flat government revenues. Worse yet, as projected revenues are falling, we must borrow more and more just to keep spending at today’s level. Imagine a seesaw, with government spending on one side and revenue from taxes, etc. on the other side. Physically, it must balance equally, or the revenue side is supplemented in the short term with loans from foreigners, etc. Thus, the trade deficit has not only depleted our ability to produce, but has funded large and growing government spending overruns for years. Now the stakes are getting higher. With spending surging and revenue falling, a massive amount of new cash for loans to our government will end up being necessary over the next few years. Those countries that had been willing to loan us money are losing the will, even the ability to fund our deficit spending of this magnitude.
Therefore, we have to offer higher interest rates to try to woo them into loaning our government the hundreds of billions presently necessary, plus the trillions of dollars in debt coming due within the next few years.
The short-term effect is an increasing interest rate that the Fed is less and less able to control. For these ten year bonds, the cost will be tens of billions in the near term, and hundreds of billions over the life of all the debt being refinanced soon.
That adds yet more weight to the government spending side of the seesaw, eventually pushing interest rates up very high until we find no rate will attract buyers that start to fear even a slight chance of default.
Bad scenarios are out there and looking increasingly likely in the next few years. Curbing the trade deficit through encouraging production here at home will help. We must do the same for the energy spending deficit as rapidly as possible.
As for the government spending deficit, we as a people need to seriously prioritize. If we had leadership with gumption, we could choose now and potentially reserve strength to get us to the next economic upturn. Alternatively, even harder choices will be thrust upon us (the government) in the not so distant future.
Just remember – the day we stop paying interest on the government debt is the day everyone else refuses to loan our government another penny.
Founder of MadeinUSAForever.com, your source for made in USA products.
The safety of food products that include those that will eventually be exported to the USA is a primary concern. We noticed the lead in millions of toys last year because kids were getting sick. However, other chemical impurities coming into America can take many years to show up in health issues like cancer.
Melamine is an industrial chemical used in plastics. It also has the odd side effect making the protein level of food products look higher in protein content. This poison was added to milk products on a very widespread basis involving dozens of China’s biggest food companies to make the milk test as more nutritious. Products that use milk, including candy exported from China were also implicated, not to mention the imported whey used pet food that killed or sickened thousands of pets here in the USA.
Now it turns out many eggs in China are also loaded with melamine, according to The Wall Street Journal. Apparently this dangerous chemical was added to chicken feed to make it also test higher for protein.
Eggs are being recalled, but clearly that is just the tip of the iceberg. Chicken itself is a mainstay of many Chinese dishes, as I know having been there many times. Chickens poisoned to the degree of passing it through their eggs means their meat is also poisoned. Not to mention the hundreds of products that use eggs, like noodles.
Just as some of the tainted candy showed up in the USA, it almost certain other milk, chicken, and egg products are already here.
Plus, if melamine is in chicken feed, it almost certainly in all animal feed, meaning all beef and pork products, and anything that uses them will also be implicated.
It is time for our government to take a stand on food imported from China. Right now no one is testing it at the borders or ports.