Here is a link to a Yahoo Finance article and a Bloomberg article on Intel investing up to $8 billion in new and renovated manufacturing plants in Oregon and Arizona. I am glad Intel resisted moving these plants and jobs overseas. The United States is a manufacturing nation and the rise of low paying service jobs at the expense of manufacturing jobs has been a drain for years. I didn't know that Intel already manufactures 75% of its microprocessors in the United States.
The latest Bill Gross Investment Outlook is worth a read and ties in directly to Intel's domestic production investment. He predicts and extended period of low returns on stocks due to low inflation, low interest rates and high debt. The high stock returns of past thirty years are not likely to be repeated, unless (second paragraph is the key and the bold type is Bill Gross'):
The predicament, of course, is mimicked by all institutions with underfunded liability structures – insurance companies, Social Security, and perhaps least acknowledged or respected, households. If a family is expecting to earn a high single-digit return on their 401(k) to fund retirement, or a similar result from their personal account to pay for college, there will likely not be enough in the piggy bank at time’s end to pay the bills. If stocks are required to do the heavy lifting because of rather anemic bond yields, it should be acknowledged that bond yields are rather anemic because of extremely low new normal expectations for growth and inflation in developed economies. Even the wildest bulls on Wall Street and worldwide bourses would be hard-pressed to manufacture 12% equity returns from nominal GDP growth of 2 to 3%. The hard cold reality from Stan Druckenmiller’s “old normal” is that prosperity and overconsumption was driven by asset inflation that in turn was leverage and interest rate correlated. With deleveraging the fashion du jour, and yields about as low as they are going to go, prosperity requires another foundation.
What might that be? Well, let me be the first to acknowledge that the best route to prosperity is the good old-fashioned route (no, not the dated Paine Webber road map utilizing hoped for paper gains of 12%+) but good old-fashioned investment in production. If we are to EARN IT – the best way is to utilize technology and elbow grease to make products that the rest of the world wants to buy. Perhaps we can, but it would take a long time and an increase in political courage not seen since Ronald Reagan or FDR.More companies need to follow Intel's lead and invest in production in the United States.