A Tale Of Two Americas... Going South Together

A 25 percent tariff on Chinese goods coming into the USA. That’ll git her done, all right - if you mean pulling the plug on America’s holographic economy. For about thirty years this is how it worked: China sent a massive volume of finished goods to us and we paid them with a massive volume of US Treasury bonds at ever-lower interest rates. A great deal for us while it lasted. Or so it seemed. Eventually, China caught onto the swindle and began liquidating its US bond holdings to buy gold and other real goods like African mining rights and farmland, Iranian oil, and port facilities in strategic corners of the world.

Now China has obviously designed a policy to dissociate itself as much as possible from the losing trade racket with us and replace the American market by increments with whatever customer base it can cobble together from the rest of the world. The Belt-and-Road initiative to physically link China with Central Asia (and beyond) with railroad lines and highways through some of the most forbidding terrain on earth was an out-front part of the plan, which we haplessly financed by buying all that stuff they sent over here for decades, and giving them the time to complete that colossal project.

Buying all those cheap toaster-ovens, patio loungers, sneakers, sheet-rock screws, alarm clocks, croquet mallets… well, you name it, naturally made it uneconomical for America to make the same stuff, with all our silly-ass sentimental attachment to union wages, eight-hour workdays, and pollution regs, so we just steadily let the lights go out and the roofs fall in, and ramped up the “financialized” economy, with Wall Street parlaying Federal Reserve largess into an alternative universe of Three-Card-Monte scams using multilayered derivatives of promises to repay loans (that have poor prospects of ever being paid back).

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