END OF DAYS

[sharpshooter90]

Some guys and myself were talking about the economy in general the other day, and after a few rounds it started to become clear that we are now moving into a whole new world order. Its been almost 30 years since China opened up to the west and the big boom in cheap products started. Across the board, we have been living a high life on the cheap labor and government subsidized exports from China. But the rapid improvements in Chinese domestic lifestyles are putting huge inflationary pressures on their entire system. In our little corner of the system where we are concerned about all sorts of metal working tools, the results are getting pretty clear. 25-30 years ago, companies could go to China and start up businesses with little or no investment because the Chinese government would fund the tool up costs just to create exports. In those days finished machine tool castings were about $0.25 per kilo. Today, with steel in short supply the price is about 10 times that amount and rising every day and there are no more free start ups- If you go to China with a design, you will most likely have to put up at least 25-50,000.00 for the engineering and molds. With our own economy in tatters, and prices bound to escalate for hobby and small business machines, we may see some real shake ups in the industry. I think we have seen the end of days for cheap metalworking machines.

[Geof]

Originally Posted by sharpshooter90 ...... I think we have seen the end of days for cheap metalworking machines.

We have probably seen the end of days for cheap anything. I think to get an idea of what things are going to cost in the future it is necessary to go back and look at the cost of things fifty or sixty years ago, maybe more. But not the cost in dollars, the cost in how long you had to work in minutes or hours to earn the dollars. Everyone thinks gas prices are extortionately high, but I did a crude calculation a while back and they have only just reached the cost in minutes worked per gallon purchased that prevailed back in the 1950s and 60s. This is going to happen with everything and the biggest shock is going to be food prices; depending on where you lived sixty years ago food costs were sometimes more than half your living cost, now they are around 20% or less with an enormously greater variety. Food price increase will be much more difficult to adjust to that gas price increases; car-pooling is possible to cut commuting costs but the idea of four people meal-pooling doesn't quite work the same.

[adamant]

It's the end of the world as we know it.

Necessity is the mother of invention.

[HuFlungDung]

"Meal-pooling" haha, I like that

At least we now know how to make our bodies tremendously efficient at conserving calories: yoyo dieting

[neilw20]

I remember a meat pie cost about 50% more than a liter of petrol. It still does. Cars now 50% cheaper compared to pies. Milk always costs more than petrol.

[The Blight]

Milk is cheaper then petrol here. A lot cheaper. In Denmark it almost costs $2.5 for 1L of petrol. The price of food is going up a bit, but not so much that you can't live with it.

About cheap machines? Maybe for a while until someone else takes over the market.

[neilw20]

I have new CNC 4 axis machining in my garage for 1/3rd the price of a car.
You couldn't do that 5 years ago.

[Geof]

Originally Posted by neilw20 I have new CNC 4 axis machining in my garage for 1/3rd the price of a car. You couldn't do that 5 years ago.

Sure you could. if the car was a Rolls.

[sharpshooter90]

Interesting comments- got me thinking back
1968 2008
Average working wage for a man 4800.00 yr - Man + Wife 80,000.00
Average suburban home 18000.00 - 220,000.00
Hamburger, Fries, Coke 0.49 - 5.00
Family sedan 2800.00 - 25000.00
Gallon of gas 0.35 - 4.00

Some things like travel had actually gotten cheaper over the years and guys like us would never have dreamed of owning a home machine shop in 1968, but thanks to technology and China, they are currently within the budget of most. Looks to me like gas had actually lagged behind in price and at 2.00 per gallon was a giveaway and 4.00 per gallon is in line with the average increase in other commodities over the years.

[Geof]

Originally Posted by sharpshooter90 Interesting comments- got me thinking back.....

Your numbers are very close to what I calculated. You are correct, gas was a steal at $2.00 or less.

[digits]

Originally Posted by Geof Your numbers are very close to what I calculated. You are correct, gas was a steal at $2.00 or less.

It's still a steal at $4 a US gallon - it costs £4.35/$8.55 in the UK, which has already put me off visiting a couple of engineering shows/supplier open days, as I'd have to know I'd be coming back with a bargain to justify £50+ in fuel.

TBH though, I'm more worried about the cost of food than tools or fuel. Perhaps it's not such a good time to invent the body-fat/air fuel-cell after all!