In 1985, America's share of global GDP was 33%. Today, it is just 24%.
Our nation is rapidly being deindustrialized and we are becoming deeply dependent on industrial production from other nations.
Did you know that the new World Trade Center that is being constructed on the site of the September 11, 2001 attacks is going to be made from German steel and Chinese glass?
That says a lot about where we are at as a country.
We have allowed so much of our industrial infrastructure to be exported to China where workers slave away in almost unbelievable conditions.
A reader named Rish recently described what things are like over there....
As a product developer I went to china and saw the way the factory workers lived and worked in person. 50$ a month is about right, but if you are a skilled quality control expert you might make as much as 150$. at least this was true about 2 years ago the last time I went. The barracks were pretty meager, bunk beds with just plywood, no mattresses, if you wanted you could go to a store just outside the factory gate and buy a thick comforter that they sell as a “mattress” .
It will be interesting to see how the next few years changes the face of the USA. Who knows? if the unemployment rate and lack of jobs keeps going and enough people become homeless, we might become the next Bangladesh, and people will be lining up of the 30 cents an hour corporate factory jobs, and living in barracks just like those…
The only way the U.S. has been able to "thrive" during this deindustrialization is by borrowing gigantic amounts of money. But all of this borrowing is slowly but surely destroying the U.S. dollar, and we are getting closer to the point of absolute catastrophe.
Peter Schiff recently shook folks up when he talked about these issues during a recent interview on CNBC....
But it is not just the United States that is printing tons and tons of money. All of the major industrialized nations have been firing out gobs of currency. That is a huge reason why so many investors have been racing to get into hard assets recently.
Now Ben Bernanke and other top Federal Reserve officials have been dropping hints that more quantitative easing may be necessary.
Unfortunately, just like with any other addiction, once you give in a few times it becomes easier and easier to engage in destructive behavior. Now that the Fed has gotten a taste for quantitative easing it is going to be really hard to stop.
Nor can the Fed stop at this point. If they did it would be disastrous for the U.S. economy. But if the Fed continues on this reckless course it will make the eventual collapse of our economy even worse.
Under our current debt-based system there is no way out. The Federal Reserve can attempt to put off the inevitable for a while by pumping up the debt bubble even more, but at some point it is going to burst.
When that happens we are going to be facing a financial crisis which will blow what happened in 2008 completely out of the water.
So enjoy these good economic times while you still can. This is about as good as things are going to get from here on out.