Quote:
Originally Posted by Sly
Ok, lets say Bob sells widgets. Note: he doesn't actually make them, he just sells them.
Bob has $25,000. He sells widgets for $350.
Widgets cost $100 to buy from China. Widgets cost $300 to buy from Omaha, NE. Bob buys 250 from China and makes $62,500. Bob could only buy 83 widgets from NE and would make $4,150.
Bank of America loans Bob $100,000. Bob now has $125,000. Buys 1250 widgets from China, profit $312,500. Or 416 widgets from NE, profit $20,800.
Bob is not buying from Nebraska no matter how much money you free up for Bob. Bob will buy from Nebraska if the conditions are right (better quality, better service,) but he is not going to buy from Nebraska simply because he has more money from the bank. That makes absolutely no sense at all.
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you are assuming these 'widgets' are of the exact same quality, design, etc? Because that is pretty much never the case when buying in China. Also, Bob would be foolish to sell the widgets for the same price, even though the ones from Omaha are most likely of better quality. Much like you can't buy a lexus for the same price as a honda civic.