Ambrose Evans-Pritchard writing in the U.K. Telegraph:
"The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labor gap with China in a clutch of key industries. The current account might even be in surplus.
"The U.S. was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day," said Francisco Blanch from Bank of America, comparing the North Dakota fields to a new North Sea.
Total U.S. shale output is "set to expand dramatically" as fresh sources come on stream, possibly reaching 5.5m barrels per day by mid-decade. This is a tenfold rise since 2009. The US already meets 72% of its own oil needs, up from around 50% a decade ago.
"The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity. As US reliance on the Middle East continues to drop, Europe is turning more dependent and will likely become more exposed to rent-seeking behaviour from oligopolistic players," said Mr. Blanch.
Meanwhile, the China-US seesaw is about to swing the other way. Offshoring is out, 're-inshoring' is the new fashion. "Made in America, Again" - a report this month by Boston Consulting Group - said Chinese wage inflation running at 16% a year for a decade has closed much of the cost gap. China is no longer the "default location" for cheap plants supplying the US.
A "tipping point" is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture. "A surprising amount of work that rushed to China over the past decade could soon start to come back," said BCG's Harold Sirkin.
The gap in "productivity-adjusted wages" will narrow from 22% of US levels in 2005 to 43% (61% for the US South) by 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the US.
The 21st Century may be American after all, just like the last."
"The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labor gap with China in a clutch of key industries. The current account might even be in surplus.
"The U.S. was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day," said Francisco Blanch from Bank of America, comparing the North Dakota fields to a new North Sea.
Total U.S. shale output is "set to expand dramatically" as fresh sources come on stream, possibly reaching 5.5m barrels per day by mid-decade. This is a tenfold rise since 2009. The US already meets 72% of its own oil needs, up from around 50% a decade ago.
"The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity. As US reliance on the Middle East continues to drop, Europe is turning more dependent and will likely become more exposed to rent-seeking behaviour from oligopolistic players," said Mr. Blanch.
Meanwhile, the China-US seesaw is about to swing the other way. Offshoring is out, 're-inshoring' is the new fashion. "Made in America, Again" - a report this month by Boston Consulting Group - said Chinese wage inflation running at 16% a year for a decade has closed much of the cost gap. China is no longer the "default location" for cheap plants supplying the US.
A "tipping point" is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture. "A surprising amount of work that rushed to China over the past decade could soon start to come back," said BCG's Harold Sirkin.
The gap in "productivity-adjusted wages" will narrow from 22% of US levels in 2005 to 43% (61% for the US South) by 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the US.
The 21st Century may be American after all, just like the last."
HT: Lyle Meier
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