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Yet another post from Financial land!

While many people are under the impression that Outsourcing is going to destroy the United States and leave the nation completely idle...

Kumo is here to say that the doomsday scenario ain't gonna happen.

Why?

Because there won't be enough high skilled workers to supply the WORLD!

From Seeking Alpha:

The Surprising Shortage Of Quality Global Labor

Posted on Apr 9th, 2007 with stocks: INFY, WIT

Nicholas Vardy submits: At first, it was just a trickle. Indian call center workers become serial job hoppers, boosting their salaries 20% with every new position. Factory workers in Vietnam leave for the holidays and don't return. Computer programmers in Bulgaria don't bother to answer the want ads of a Los Angeles movie studio. But today, anecdotes of a global labor crunch have turned into a flood. Last week, staffing agency Manpower Inc. released the results of a survey of nearly 37,000 employers in 27 countries. It turns out that more than four out of 10 employers around the world are having trouble hiring the right kind of staff for the right kind of money. And the problem is getting worse.

The Global Labor Shortage: Cheap Labor R.I.P.?

At first, the flood of three billion new workers into the global marketplace for labor was a boon to employers across the globe. But cost cutting strategies, like offshoring and outsourcing work to low-wage countries, are running out of gas far sooner than many expected.

The salaries of IT workers from Central Europe to India are rising by double-digits every year. In the past five years, Hewlett-Packard (HPQ), SAP (SAP), and even Morgan Stanley (MS) have set up shop in former Communist countries of Eastern Europe. There, a deep pool of highly qualified math and science graduates were supposed to be willing to work for a third of that paid their Western counterparts.

Yet today, IT directors in Poland can cost companies more than $100,000 a year. That approaches Silicon Valley levels. And the number of highly qualified workers is surprisingly low. Multinationals have reacted swiftly, moving operations to ever lower-cost centers. Nokia, which already employs nearly 5,000 people in Hungary, recently announced that it is building a new handset factory in Romania.

This is all rather unexpected. Five years ago companies never thought they would have to worry about human resources. China and India were supposed to have seemingly inexhaustible pools of cheap labor. Yet today, the #1 challenge for multinationals setting up operations abroad is finding and keeping good workers...

Check out the rest for yourself.

So how does this scenario play out over the long term?

My take is simple... the world today is engaged in an economic structure that is unsustainable.

For example, get a load of this report.

When you click on it, you will note that the areas of the world with the largest share of global assets are The United States, Europe, and Japan.

The report also states that Ninety percent of global capital flows between the U.S., the U.K, and Europe.

But what about India and China? you might ask.

These countries aren't even on the map compared to the Big Four (U.S., U.K., Japan and Europe). In other words, the much ballyhooed "global economy" is very much dependent upon nations that have serious challenges that lie ahead.

Systematic Risk, in its purest form.

When this information is examined in the light of a very possible GLOBAL worker shortage, ever increasing inflation [1], massive upcoming retirement and healthcare liabilities [2], tremendous amounts of government debt both in the U.S. and in Japan [3][4], political instability in the Middle East and Nigeria, (where a significant supply of our oil comes from) [5][6], and the Islamification of Europe [7], and you have a situation that most definitely bears watching.

Our fiat "global economy," while excellent for making short term gains, will pop at some point, unless painful decisions are made.

Unfortunately, I find it hard to envision politicians and corporate leaders with the will and the skills to turn the ship around.

Don't sleep... hope for the best, and prepare for the worst.

Kumo.