Guitars and Economics

I was out of town a couple of days ago and, as I often do, I dropped in at a music store between appointments. I browsed, I chatted with the folks there and looked at all the new gadgets and instruments. It was great fun.

I also bought a guitar. I didn't need another guitar, really, I have four perfectly good guitars already. Why another one? I'll get to that in just a bit.

My first guitar, when I was fifteen or sixteen, was a Silvertone archtop acoustic, ordered from a catalogue. I bought an electric deArmond pickup when I started playing in a band in 1962 and although the guitar and the sound it produced were both horrible, that is how I learned to play. When I was eighteen and working full-time while taking some time off from school in 1963, I bought a Fender Jazzmaster. I loved the guitar, but sold it when I decided to go back to school and needed the money. And so it went. I've owned a bunch of guitars in my life but keep looking for something new, with the perfect feel and the perfect sound.

One of my favourite guitars was a Swedish Hagstrom model that I bought in the 1980's. I traded it for something else along the way, but decided that someday I would get another similarly styled guitar, reminiscent of the Gretsch Nashville models which I have long drooled over. When I was in the music store browsing, I picked up several guitars similar in appearance and design to the Gretsch line, including a Washburn model. I was underwhelmed by the sound and assembly quality of these guitars compared to their rather hefty price. The salesman then suggested that I try a guitar which I had overlooked somehow and I picked it up to try it out. It was an Ibanez semi-hollow body model that I had never seen before. Since I already have an Ibanez solid body guitar that I really like, I figured it was worth playing a few bars on this instrument to see if it might suit my needs.

I was really impressed with the guitar. It has a fast neck, is perfectly sized, has great tone and is very attractive, with a double-cutaway body at the neck and a highly lacquered maroon finish. The salesman plugged me in to an amp appropriate to the instrument, and after playing a few bars I was sold. When told that the price was only $387.00 Canadian, I didn't need to think about it any further. Why such a low price? This particular Ibanez model is made in China.

Now, finally, we're getting to the crux of this post.

I didn't really need the guitar but bought it because at that price the instrument is essentially disposable. The price is almost of no consequence, especially since the guitar I thought I would buy next costs about ten times as much.

This raises some interesting questions for me. Over the last year, televisions and electronic gadgets like CD and DVD players manufactured in China have dropped so low in price that anyone can afford just about anything they want or need. In my home, we already have two TVs and DVD players each for my wife, my son and me. We don't need them, but at the negligible cost involved, we can have them anywhere in the house we might wish to. It is the same with many other products. As a result, homes everywhere are crammed with all manner of electronic and other goodies.

How likely am I do buy another TV or DVD player in the next five or more years? Not very. How about another guitar? Maybe, but certainly not because I really need one. The same situation, I imagine, applies everywhere else in North America.

North America, I believe, is the largest consumer of Chinese goods. When we all have two or three of everything, who is China going to sell their manufactured goods to? Is there therefore a limit to the astonishing economic growth of China? If we slow down or stop our buying of Chinese consumer goods, what will happen? When interest rates go up again, as they always do eventually, and when consumer borrowing slows down, who or what, exactly, is going to fund continued growth of China, Hong Kong, Taiwan, South Korea and Japan? These places all hold significant American debt. What happens when they all start cashing in, selling American bonds? What happens when they won't or can't continue to purchase new American debt. The united States, with its enormous deficits, has a similarly enormous need for foreign capital. When that dries up, what will support the escalating American deficits and national debt?

I'm not sure I want to find out just yet. It has long been time, in my opinion, to purchase physical gold and silver as insurance against fiscal calamity. It's still not too late. I think that our economies are in a precarious state and that we are courting disaster by allowing our governments to carry on with fiscally irresponsible policies. Canada is, at least, running federal budget surpluses and is making nominal payments against our national debt. But because we sell so much of our production to our American neighbours, whatever happens to the United States happens here. America sneezes, Canada catches pneumonia.

Trouble is coming. I just hope it holds off for bit longer, so more people will recognize the problem and will have time to take precautionary measures.

If it will help, I may buy one more guitar to help shore up our economies, but that's it!

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