Are we approaching a Post-US world?
Would it surprise you to know that some think we are already there? I recently read an article in the Asia Times entitled, “Post-US World Born In Phnom Penh.” The article highlighted the events surrounding a summit attended by President Obama late last year where he was attempting to push the US-based Tans-Pacific Trade Partnership, which included several Asian countries, but excluded China. The article called the event, “the greatest humiliation” ever suffered by the United States. Why? The Asians decided to play ball without the United States. The Association of Southeast Asian Nations together with China, India, Japan, South Korea, Australia and New Zealand are forming a new trade association, but excluding the US.
Don’t they NEED us to be part of this? Not really folks. Here are some stats to both make my point, and shock you.
- Exports of Asian Countries have risen more than 20% since 2008
- American exports have risen only about 4%
- Europe’s exports have fallen more than 20% in the same time frame
- China’s exports to Asia have risen by 50%
- China exports 3 times more to Asia than they do to the USA
- China imports 10 times more from Asia than the USA
They really don’t care if we are on the playground or not. Because of the trending trade patterns, Asian currencies are trading more closely with China’s Renminbi than the American Dollar. Why should you care about this?
Listen to what the Peterson Institute has to say about it:
A country’s rise to economic dominance tends to be accompanied by its currency becoming a reference point, with other currencies tracking it implicitly or explicitly. For a sample comprising emerging market economies, we show that in the last two years, the renminbi (RMB/yuan) has increasingly become a reference currency which we define as one which exhibits a high degree of co-movement (CMC) with other currencies.
In East Asia, there is already a RMB bloc, because the RMB has become the dominant reference currency, eclipsing the dollar, which is a historic development. In this region, 7 currencies out of 10 co-move more closely with the RMB than with the dollar, with the average value of the CMC relative to the RMB being 40% greater than that for the dollar. We find that co-movements with a reference currency, especially for the RMB, are associated with trade integration.
If you are not familiar with the Peter G. Peterson Institute for International Economics, they are a private, non-profit, non-partisan research institution devoted to the study of international economic policy. Since 1981 the Institute has provided timely and objective analysis of, and concrete solutions to, a wide range of international economic problems. It is one of the very few economics think tanks that are widely regarded as “non-partisan” by the press and “neutral” by the US Congress. Its research staff is cited by the quality media more than that of any other such institution, and it was selected as Top Think Tank in the World for 2008 in the first comprehensive survey of over 5,000 such institutions. Support is provided by a wide range of charitable foundations, private corporations and individual donors, and from earnings on the Institute’s publications and capital fund. It moved into its award-winning new building in 2001, and celebrated its 25th anniversary in 2006 and adopted its new name at that time, having previously been the Institute for International Economics.
What would happen if the US dollar were replaced by another currency as the world’s standard? A $4,000 loaf of bread would be considered a bargain!
According to Forbes, China’s yuan may be two years away from becoming a global trade currency. By 2014, an economic system may be created to settle cross-border yuan transactions, which could increase currency convertibility in Beijing and elsewhere. When this economic system is developed, it will permit nations to settle expenses with Chinese merchandises or in yuans rather than dollars. Over time, the yuan usage, mainly in Asian trade markets, would take demand away from the dollar along with its status as world’s reserve and trade currency.
Why are we not talking about this here at home? Everyone else is! Simply Google the term “US dollar replaced as world currency,” and you’ll see that China is lobbying for it, and the whole world is talking about it…except us. We’re too busy deciding whether it is prudent to spend taxpayer money on a robotic squirrel! What the hell is wrong with this picture?
For a closer look at what post-America world would look like, I recommend reading Mark Steyn’s “After America – Get Ready For Armagedon.” Steyn says: “Nothing is certain but debt and taxes. And then more debt. If the government of the United States had to use GAAP (“The Generally Accepted Accounting Practices” that your company has to use), Uncle Sam would be under an SEC investigation and his nephews and nieces would have taken away the keys and cut up his credit card”.
The Asia Times article that sparked this rant said, “America’s great economic strength, namely its capacity to innovate, exists mainly in memory four years after the 2008 economic crises.” Excuse me???? Really???? Americans might be drowning in a sea of intellectual numbness facilitated by a press core that no longer reports the news and a bizarre fascination with sports and entertainment, (which has preceded the down-fall of every great civilization in the history of the world), BUT, we still have ONE thing that changes everything. Although its being challenged daily and might have eroded to the point of hanging on by a thread…we have that one magical thing that sparks innovation like nothing else known to man. Its called Freedom! I suggest we use it and protect it! I suggest that we need some more Thomas Paine type characters to spark intelligent, relevant and real debate, starting with an honest assessment of where we are as a nation economically and educationally. Get rid of the fluffy crap and political correctness be damned! Before you can remedy something it must be accurately diagnosed. We have to START with the TRUTH! What do you think my manufacturing friends? Is America a “has been,” with no more innovation left in her?
Dr. Ben Carson, M.D. hit the news recently as a speaker at the National Prayer Breakfast attended by President Obama. Dr. Benjamin Carson is a Professor of Neurosurgery, Plastic Surgery, Oncology, and Pediatrics, and the Director of Pediatric Neurosurgery at Johns Hopkins Medical Institutions. He had authored several books, one of which I’m raving about this month call, “America the Beautiful, Rediscovering What Made This Nation Great.” A great read, even if you never liked history class! Dr. Carson makes a thought provoking correlation between events today and the events that led to our nation’s founding. This man is brilliant, AND tells it like it is with no regard for political correctness. The man, the book and the message, are truly something to RAVE about!
This month’s recommendation is for Modern Machine Shop online, http://www.mmsonline.com. A great web site for manufacturers with educational videos, webinars, manufacturing news and industry supplier connections. Their blog is on MY reading list each month.
Fran Brunelle is an industrial auctioneer with almost 20 years experience, a manufacturing business broker, licensed real estate broker specializing in industrial properties, a real estate auctioneer, certified appraiser and author. Fran has established several corporations that provide services to the manufacturing industry. The “Accelerated Group of Companies” provides tools and services to help manufacturers grow and exit strategies to maximize dollars when they are ready to retire or sell their manufacturing business. The group of companies that Fran Brunelle has established includes:
www.AcceleratedBuySell.com – Provides Online Industrial Auction Services, Used Equipment Auctions, Capital Equipment Auctions, Plant Liquidations, Industrial Plant Cleanout Services, Used Machinery Location Services, Certified Machine Tool and Equipment Appraisals, and more.
www.AcceleratedMfgBrokers.com – Specializes in Manufacturing Business Brokerage and Mergers and Acquisitions. We help manufacturers develop exit strategies to maximize retirement dollars, and successful manufacturers expand through acquisition of other manufacturing companies, product lines and customer lists. Manufacturing Companies for sale throughout the United States are listed on this site.
www.AcceleratedRE.com – Provides Industrial Real Estate Brokerage Services, Online Real Estate Auctions, Sealed Bid Real Estate Auctions and complete industrial facility cleanout services.
www.IgniteMfg.com – Provides funding for products made in the USA, and engineering/manufacturing educational needs through Crowd Funding.
www.MfgWebSolutions.com – Provides web development and social media services for manufacturers at under-market rates.
Fran Brunelle is a contributing author to:
blog.AcceleratedBuySell.com - A site that provides the latest manufacturing news, statistics and opinion. It also provides information on how to grow a manufacturing business, and what to do if you are a manufacturing company that needs to close.
MFGWebSolutions.com/blog - Provides the latest information on social media and web development for manufacturers. It gives manufacturers tips and tricks for boosting their web presence.