Losing the Economic Heavyweight Championship Bout
Economies compete daily in a worldwide arena and ever since the late 1800’s or so the United States has been the dominant force in competition and in the record books. Sadly however, this reign seems destined to end. When the reign does end it will not be because America "Finished a close second" or "Suffered from poor coaching." The reign will end because America has stopped working, stopped training, stopped competing, and like a bloated lazy Heavyweight Boxing Champion, is one TKO away from a major day of reckoning. Around the world our competitors are blackening our eyes and bloodying our noses pretty much on a daily basis and if the beating continues we can expect to lose the Heavyweight Championship Belt and all of the financial goodies that go along with being the dominant economic player in the world. Our Hardest hitting opponent over the last few decades has been China.
Here is a review of some of the scorecards:
• Over the past decade China’s GDP has grown 7 times as fast as America’s – 316% growth vs. 43%
• The International Monetary Fund reports that China will pass the United States and will become the largest economy in the world in 2016
• During 2010 the United States spent $365 Billion on goods from China while they spent only $92 billion on goods from us
• Forbes reports that in 2010 China produced eleven times as much steel as America (880 million tons versus 81 million tons)
• Because American steel companies cannot compete with Chinese State subsidized companies, some products like steel rebar are no longer produced at all in the United States, and only one company in the U.S.A. produces Military Grade Steel Armor, and it was sold to European steel giant Arcelor Mittal.
• China has so completely dominated areas of Pharmaceutical production that certain key ingredients for antibiotics are no longer produced anywhere in the United States – The last Lab to produce these components in the United States was a now defunct Bristol Squibb plant in East Syracuse, New York .
• ZeroHedge.com reports that since China joined the World Trade Organization, about 46,000 factories have been transferred from the United States to Asia.
• Bloomberg reports that last year China produced over 97% of all of the Rare Earth Metals mined worldwide. These Elements are necessary to produce batteries, solar cells, magnets, computer chips, etc. China has the worlds largest supply of Rare Earth Metals, the United States has the second largest.
• The U.S. International Trade Commission reports that China’s current major export to the United States is Computer Equipment and Communications Technology while our main export to China is "Scrap and Trash".
• There are currently more than three Chinese Citizens for every American Citizen.
Why the comparison between a Heavyweight Title Bout and the Economies of China and the USA?
If you have ever boxed, or studied boxing, or even watched boxing and paid true attention you will remember the first rule of boxing – Protect Yourself At All Times. When a Heavyweight Champion doesn’t protect himself a few things happen: Something unseen slips through- there is a crash- the lights go out- the pain and confusion rushes in- you wake up- it’s over- you have lost the belt- the opponent now makes the rules- and has the power- and the recognition- and the Title.
In the world of fisticuffs the Champion’s Belt is the prize, he who has it rules. Likewise in world economics, having the World Reserve Currency allows a nation to dominate the others. At some point China will surpass the United States as the World’s dominant economy, and not long thereafter the Dollar will cede to its successor just as a battered former champion hands over the title belt to the celebrating opposing corner. When this happens those contenders still 100% in the United States Dollar will have the financial equivalent of a glass jaw. Those who have diversified their positions and included precious metals and tangibles will have boxing’s first rule to thank for their prosperity.
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