misleading indicator, at best.

Have always thought that raw industrial production is a poor indicator, which tends to mask deep seated problems. For example, the PRC leads in steel production, but they are highly dependent on outside sources for a substantial portion of both coking coal, and iron ore. Lose even partial access to those outside resources, and all you have is a large pile of sunk costs into non-productive assets. Truth of the matter is that China (PRC) is only a part of the overall manufacturing and fabrication process, and for the really finished goods requiring high quality, precision steel, there's a lot of other players outside of China who all have to be involved, otherwise the entire process goes into free-fall. That's why there is still a fair amount of steel producing capacity here in the US.

Which brings up a critical point. Manufacturing locations like China, Vietnam, India, and other locations have been seriously damaged by the vast increase in transportation costs over the last 6 to 9 months. The entire "offshoring" business has totally been changed because of the increases in transportation costs (and we are not talking small increases), and there's large international businesses out there who are currently sweating blood over the possibility that they are going to take some massive writedowns on investments made over the last several years in "offshoring" manufacturing capacity.

Check and see how many new announcements of major investments and/or expansions in production capacity are being made within the last 5-6 months in places like China. Hint: Not Many. There's a reason - the uncertainty in the marketplace is forcing a comprehensive review of many projects, and project validity with gas prices at $2.50 a Gal. is one thing, project validity is much more uncertain (and unlikely) at $4.00 a Gal. And remember, the government of the PRC was subsidizing fuel prices, and those subsidies have been cut by at least 40% to 45%, with more increases to come.

If you talk to any number of business analysts who are really have the insides into China's manufacturing potential, they are much less confident than what oftentimes gets presented in the MSM, specifically in that many very difficult issues China has to face just get ignored or glossed over.

In short, I'm a little bit worried about US economic power, but for different reasons. We need to build a substantial energy production base (and I'm not necessarily concerned just about oil) for both natural gas and electricity, but also high speed internet capacity (REAL high capacity broadband, not this wannabe nonsense being foisted off onto the general public these days). And addressing those issues, at least here in the US, are directly in the political realm.