All that shrieking about how great the USA job market
had been the last one or two years has now suddenly become, in honesty, a
con job. How could the job market be that great with all those
widespread retail outlet closures and lacklustre push towards
re-industrialization. Now that reality has hit and now been clearly
revealed. It was all a mirage.
But voters in the USA are not
paying attention. All the attention has been focused on well-crafted
speeches giving glorified performances boosting political egos. It is
all a Hollywood make believe that will be swallowed line, hook and
sinker by the walking dead.
The same Hollywood blockbuster remake
that will still appeal to the masses. The Fed is at the end of its
tethers and no more rope is available for keeping interest rates
unchanged which will crash the economy. There has therefore been a need
to have a rate cut to save the job market. Whether it will work is still
to be seen, but more like an exercise in futility. Working back towards
cheap money to boost the economy and fund investments is not going to
work if competitiveness is beyond its capability to overcome and
address.
The USA is in a position it has never been before
according to Dr. Richard Wolff. The problems are daunting with debts
unsolvable, more so with de-dollarization eating into the US$ Hegemony.
While it had been able to sell its debts in the past to foreign buyers,
it is not so today. So, issuing more treasuries is not going to work as
there are fewer buyers of USA debts. So, it is left to domestic buyers
to shoulder the burden - hedge funds, pension funds and banks. Any
default is going to topple the house of cards, with citizens losing
their pants or even underwear.
Anonymous
2 comments:
How much greater has Trump made the USA during his Presidency from 2016 to 2020? Did the trade war result in USA's re-industrialization and the ability to decouple completely from China? In fact, the USA had imported more from China after Trump's trade war effort and was greater than ever before. Was the USA able to produce most of the items itself or source uncompetitively from elsewhere like the EU? The only stuff they are able to produce are toilet papers to export its inflation overseas.
When decoupling becomes unworkable, they invented 'de-risking'. How to de-risk when China is still in control of essential raw materials needed for USA's military, plane makers, semiconductor manufacturing, pharmaceutical industry and consumer products?
China had just issued new control over Antimony, a flame retardant, needed for the USA military, citing 'dual use' security issues, the new narrative invented by the USA which China is following suit, tit for tat. China is not playing all its cards at once and China has all the cards hidden close to its chest that it can use to retaliate. The control of Gallium and Geranium exports by China stunted the semiconductor manufacturing building frenzy in Arizona and is killing the Chips Alliance. Wonder how the extraction by the USA and the West to strip such rare metals from discarded laptops and other electronic devices is progressing and how competitive will that be to counter China.
Many plans to open up rare earth mines elsewhere have failed. The USA thought that extracting rare earths from Mongolia in a joint venture will counter China's control of Gallium and Geranium. But China killed it straight away by disallowing the use of its Tianjin Port for use by Mongolia to ship the ores to Japan for refining. Setting up refining facilities in Mongolia is costly and takes years and expertise that Mongolia lacks. Moreover, China can still kill such competing ventures by cutting prices that will bankrupt the investors. Are they willing to undertake such risks?
What was the fear actually over China's overcapacity citing the fate of others around the world? China's control over refining capacities in every sector will put investors trying to set up competitive logistics in grave doubt over investment feasibility. That is what the USA is trying to put a stop to. The USA cares little about the fate of other countries trying to compete with China. Most countries are not competing with China as China is already providing them with products so cheaply that they do not find it sensible to produce themselves. The economies of scale and comparative advantage of production does not accrue to small countries. Why should they be bothered with China's overcapacity?
It is the same imaginary fear mongering over threats to small countries so that they need the USA to place military bases for such countries' protection. The Africans no longer buy into the snake oil.
Sorry for error - should be Gallium and Germanium not Geranium.
Apologize for my seriousl mistake.
Anon 9.55
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