Building factories in the USA is akin to closing the
stable doors after the horses have bolted. It is an exercise in
futility. China controls the raw materials, the refining logistics and
is expanding its domination. Investors intending to help to build the
USA manufacturing hub will have to live with the possibility of losing
their pants trying to compete. The alternative is moving their
operations to China, simple and more realistic to avail themselves of
the supply chains at hand. They can always produce to cater to the
Global South market, not necessarily the USA or EU market.
From
now until the election in November, every little news about the USA is
going to be rosy or as pink as their swimmers at the Paris Olympics. The
stock market is shooting up, jobs are plentiful, manufacturing is
coming back to the USA, inflation is manageable, and a rate cut in
September is likely to happen. All these are spins to give the Democrats
a lift in November.
Money printing of about US$3 trillion was
reported in 2020, providing the growth in every sector of the USA
economy. Ask Professor Richard Wolff and he will tell you it is all a
mirage. Most of that money goes into the stock market on Wall Street,
not into productive endeavors. Today's printing is even more intense,
with the USA making hay while the sun still shines for the US$ hegemony.
When it ends, the story ends as well.
Anonymous
2 comments:
Painting pink and purple for November election on the surface will not last and may just disappear after the rain washed away the colors. Then we can see the real ugliness of the situation. Most people expect a recession after that, with bank failures imminent. Big banks will then absorb smaller banks with offers of pennies on the dollar. Investors will lose their pants to those at the top of the food chain, the 1% predators. Depositors do not have assurance of being protected too, as the deposit insurance mantra has already been rendered less assuring with the recent bank failures.
This is about as far as kicking the can further down the road will endeavor to do. The Fed and Treasury have been doing a patch and pray job to last until November. Then all hell will break lose after November.
The problem of luring manufacturing back to the USA is just like going to the moon. They were supposed to be there many times before and doing it now should be just a walk in the park. But it isn't so. What is the difficulty? They lost the expertise. Same with manufacturing now.
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