The other day I was commenting on a hub, and I realized a few things that I have not heard any talk about or if people even realized, with regards of globalization and current state of the economy. It been kind of linked together, but not in the way that I saw it at that moment. I will explain my logic. I may find out later that I am off my rocker on this, but it seems to logically connect together so far.

In 2007 and 2008, globalization was in force as strong as ever. Everything was going on in China. It seemed liked about every corporation wanted to build a facility and have their products made in China. I even have a personal friend who is in China, starting up a division for his employer in China.

At that time in 2007 and 2008, all of the freight ships were tied up shipping to and from China. The price of scape metal went sky high because China could not supply enough raw material to produce the products. Ships were freighting everything to and from China. The futures on oil sky rocketed because the oil demand was appearing to be more than the supply. Then it seemed to all crash. Gas prices topped $4.00 a gallon. Consumers were struggling with the high cost of gas, food and other essentials. So much that they started having trouble with their loans and debts. Loans started being defaulted on. Pretty soon the housing markets started struggling with defaulted loans and the housing market crashed dived. This strained the banks and the bad practices of the banks surfaced and caused even more problems and so forth. So this is where we are sitting at to day.

Well, I am no economic expert, but i just tied the recession back to globalization. One of the biggest problem being transportation of the products. If you make everything in China, you will need to ship everything to and from China, using a lot of fuel to do this. So all of the global warming alarmist should be against globalization, but I have not seen anything to show difference in this area. They are just talking about how China is polluting, and giving them a free-from-jail card to pollute.

Globalization is nothing new. In the 60's and 70's, Japan was the one who was making everything. They were the China back then. After a few decades, the shift of wealth caused the Japanese standard of living to rise so high, that they are now one of the higher cost producing countries in the world.

I basically see the large corporation, which a mostly European centered with some American one intermingled, (which is the heart of socialism who are supposed to hate capitalism), to keep looking for cheap wage countries and enter those countries to have then produce cheap products. And like Japan, once the wealth is transferred, and they no longer can be the cheap producer, the corporations will move on to other countries. One could say, this is one way to bring the third world countries out of poverty, but so far most of these third country worlds have been to unstable to work with.

I guess when at the end of everything, once all of the cheap wage countries are exhausted, with the high cost of transportation, and the need of transporting raw materials, we may be back to local producing. If wages all neutralize out. It may be come cheaper to start producing locally again.

To summarize, wages are effect the bottom lime more than transportation, but in the future, with rising transportation costs, the transportation costs will influence the corporations back to making the products closer to the point of sales and raw material. Right now, it seems like corporations want these big mega facility where they can mass produce cheaply and ship out from there to all over the world. As transportation cost rise, this may start to prove more expensive, and the smaller efficient facilities locally may start to come back and be utilized. This may be even back to be more to the advantage of small mom and pop type, where they can produce locally with low overhead.

This will be interesting watching this has our world changes and where things will head.