The USA Federal Reserve and Treasury Department are both
working very hard, hand in hand, to keep the fairy tale USA economy on
steroids, to make a case for Biden to earn a second term. They are
keeping the USA economy currently on ICU and cannot let it collapse
before November.
Today the Federal Reserve may talk about cutting
rates soon, manufacturing reasons to support their narrative. Then
someone will come out tomorrow to pierce the ballon by saying the
opposite. Later someone else from the Fed will come out to say rate cuts
are close by again. Then another backstep will take place and so on and
so forth. They have been talking about the rate cut issue, back and
forth for 18 months and still at square one. The Fed is just like the
weathermen, ever changing in their weather forecast. And everywhere at
home and abroad they continue to lap up the fairy tale.
The USA
over the last two Presidencies lost almost every step of their way, with
every policy move backfiring badly. They either shot themselves in the
foot or shot their allies in the head. Sanctions may be thought to hurt
the victims, but it also hurt allies that have been forced to cut off
dealings with the sanctioned party. Russia is a perfect example in
relation to Europe.
The sanctions cum technology war against
China presently is moving in the same direction for the USA. The USA is
attempting to lure manufacturing back to the country, but what it is
doing towards China is indirectly showing the rest of the world its
untrustworthy behavior towards foreign investments.
Many have
been left high and dry after pumping in millions to start factories and
forced to abandon them altogether. Chile wanted to start a copper-nickel
mine in Minnesota and was stopped in its tracks, losing hundreds of
millions for nothing. CATL has now found out it is too risky to start an
EV battery plant in Kentucky and has decided to scrap the project,
thankfully in time before putting in the money. But it is creating
problems for Ford, Volkswagen and Hyundai trying to expand production of
EVs in USA leveraging on CATL's battery plant move. Who else wants to
think of investing in the USA? Toyota is having second thoughts about
investing US$500 million to expand its foothold in the USA.
Trying
to lure manufacturing back to the USA is easier said than done. It goes
further than just printing money and throwing subsidies that cannot
last forever. Moreover, there is the dominance of industrial capacity in
China that is always posing a threat to those investments trying to
compete with Chinese manufacturing. Can they survive after pouring in
all their resources?
Anonymous
2 comments:
Nothing is more evident than the realization that the 'Empire of Lies' is being led by the biggest liars on the planet.
Joe Biden leads the country, Janet Yellen leads the USA Treasury, Jerone Powell leads the Federal Reserve. And not to forget that 'cabbage patch' black doll fronting the propaganda campaign for the USA Government. They have to generate lies to keep the USA functioning in ICU until November.
Donald Trump, if he squeezed into the White House next, will face a collapsing economy and banking crisis. But fortunately, he is in a privileged position to put all the blame on Biden. That is the beauty of changing leaders every four years. No accountability for failures, no consequence for mistakes made by and as predecessors. After all, the USA's forever mantra in its playbook is about blaming others, no matter which side of the political divide they came from. And voters are left to wonder how to get over the next four years, before being repeated again and again.
Will Trump tackle the homeless problem, or the drugs problem, or the debt problem, or the gun problem? Not on his agenda of course. Trump's preoccupation, like Biden is about containing China's rise. Is it too little too late? How is the USA going to contain China having no obvious leverage left to hold on to? Raw materials, refining logistics, industrial capacity, renewables and soon semiconductors will be or are already controlled by China.
All the USA had left are empty feel-good slogans, nursing expensive mistakes, jeopardizing the interest of allies, strengthening ability of enemies to fight back, and pushing enemies to close ranks.
How long more can the USA keep up this charade depends on how fast the de-dollarization movement is able to find a tipping point. I believe it is close, with China now retaliating tit for tat against the USA moves. It signals a new confidence emerging in China that it can tolerate decoupling, be self-reliant in most sectors and will not collapse. What China has seen regarding Russia gives it the confidence to take a stand.
That China is now increasing tariffs against USA and its allies is an unthinkable move a couple of years ago. Who or which country has ever dared to sanction the USA or erect tariffs to counter the USA? It has never happened before, right? Japan and Germany just ate humble pie all along, bullied by the USA and following its dictate. The world really is changing.
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