Over the last 40 years, China has leapfrogged all other third world nations to become the second largest economy in the world. Our TVs, smartphonesâ¦clothes⦠our cheap furniture. Theyâre all labeled âMade In China.â
â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â October 27, 2023Â |Â Â [View Online]( |Â Â [Sign Up]( âMade In China,â or The End of Cheap âAs Americans consider the United States an exceptional nation; so do the Chinese people think of their Middle Kingdom.â
â Patrick Mendis Dear ,  In New Jersey, we observe in our video [Shell Game]( the Lower Trenton bridge has a sign on it that reads âTrenton Makes, The World Takes.â We pass the sign each time we take the Acela from Baltimore to New York. Each time weâre briefly intrigued that the city keeps the sign maintained. All the neon bulbs work at night. The sign used to symbolize the pride its citizens had in the products made locally and shipped around the world. Alas, now itâs just an historical artifact. CONTINUED BELOW... POWERED BY REPUBLICAN METAL COMPANY The Hidden Anchor Investment of the Elite Revealed There's ONE investment that's discreetly held by over 97.6% of the ultra wealthy. We're talking about Goldâ¦But what the wealthy elite won't readily disclose, is the tax-free loophole they're leveraging to invest in gold without deploying their own capital. To follow the trail of the smart money whales⦠[Click here to claim your free copy of the Gold Investment Guide.]( CONTINUED... For decades, big American corporations have been shipping good jobs overseas thanks to high taxes and increasingly onerous environmental and labor regulations. In 2000, manufacturing accounted for 13.9% of US GDP. By 2022, that share had fallen to 11.9%. Manufacturing employment has also declined sharply, from 17.4 million jobs in 2000 to 12.9 million jobs in 2022. Fact is, âGlobalizationââthe trend of outsourcing manufacturing that got underway in earnest at the turn of this centuryâhas wrought disaster for large swaths of the US economy. Go to any small to midsize town in America and youâll see the rusting hulk of what used to be the manufacturing backbone of the global economy. Outsourcing made sense on paper. American corporations were able to save a lot of money on labor and production. And, ultimately, Amazon, Best Buy and Home Depot gave us the âcheap stuffâ we love⦠everything from electronics to baby diapers and new power tools. Apple and Tesla wouldnât be where they are without cheap labor. Walmart shelves wouldnât be full of toys and other gee gaws. Nor would any number of cheap âbrandsâ at Target. Over the last 40 years, China has leapfrogged all other third world nations to become the second largest economy in the world. Our TVs, smartphonesâ¦clothes⦠our cheap furniture. Theyâre all labeled âMade In China.â But as we demonstrate in [Shell Game]( the era of âcheapâ weâve enjoyed is coming to an end. Just like [the bond market has been turned on its head]( so has the balance of global trade. The Chinese economy has developed its own debt allergy in commercial property, residential real estate and infrastructure. The CSI300 indexâan index of the largest Chinese stocks trading in Hong Kongâis down 18% from its peak in 2023. The exodus of capital has put stress on âstructuredâ investments which depend on continued growth, giving derivative traders for pension funds around the world the willies. Reading reports of the Chinese governmentâs efforts to arrest a stampede from markets is reminiscent of financial news in the US in the fall of 2008. Reuters, today: China's benchmark CSI300 Index staged a moderate rebound from 4-1/2-year lows this week, after state fund Central Huijin Investment started buying exchange-traded funds (ETFs) on Monday, adding substance to the central bank's pledge over the weekend to fend off financial risks. Investors were also excited by Tuesday's approval of an additional 1 trillion yuan ($136.76 billion) of sovereign bond issuance. Drawing investors back into China's $10.5 trillion stock market, particularly the foreign buyers that have fled in droves this year, would stem further slides in a market which fell to its lowest since 2019 earlier this week. The policy efforts could also halt capital outflows and ease the yuan's depreciation and a stronger market could help fund a rejuvenation of the world's second-largest economy. Following Evergrandeâs bankruptcy last year, weâve had our eye on Chinaâs largest developer Country Garden. Last week, on October 18, Country Garden missed an $18.4 million dollar âdollar bondâ payment. Today, theyâre scheduled to make another $40 million dollar payment on another bond. The conventional wisdom on the Street is they wonât be able to do so. âWith $186 billion of total liabilities,â writes Pearl Lui in Bloomberg, âCountry Garden is one of the worldâs most indebted builders and a symbol of Chinaâs broader property debt woes.â Why does this matter at all? A debt crisis of any magnitude in China would create massive ripples of economic depravity, unemployment, market crashes, and unrest all around the world... and especially in the United States. And thatâs because of the very concept that was touted and brought us American âcheapâ in the first place: Globalization. While itâs tempting to compare Chinaâs 40-year boom to the U.S. financial crisis in 2008 because, just like in the US, Chinaâs prosperity and infrastructure boom were built on a mountain debt. And while the Chinese party line has been they are immune to debt crises⦠it turns out they arenât. Rather than 2008, however, the striking feature of the economic crisis unfolding in China is how eerily similar it is to America in the 1930s. Back then, when our own Great Depression struck, America was at the pinnacle of its manufacturing power⦠the U.S. produced 32% percent of all manufactured goods on the planet. CONTINUED BELOW... POWERED BY DEMISE OF THE DOLLAR CONTINUED... Then came the stock market crash of â29⦠a massive implosion of debt⦠and, yes, a national banking crisis. Over 9,000 banks failed over three years. The economic shock that followed devastated the national economy⦠and spread to every country in the world that was doing business with the United States. Everything collapsedâstock markets, personal income, prices, tax revenues. International trade fell by 50%. Unemployment shot up to 33% in some countries. Commerce virtually came to a grinding haltâfrom Europe to Asia. It was a total global disaster. And some maintain it led directly to World War II. Now itâs Chinaâs turn. Because of its own 40-year âeconomic miracle,â China makes up about 30% of global manufacturing⦠and does business with countries all over the world. Imagine what it would look like if trade with China slowed further. We could say goodbye to cheap labor⦠cheap imports⦠electric vehicles⦠smart phones. Everything would be more expensive and less available⦠If you think inflation is bad now, wait until you see what happens if Chinaâs economy collapses. More than just disruption to the global financial structure, the âend of cheapâ would be tantamount to another surge in inflation regardless of interest rate machinations of the Fed. Regards, Addison Wiggin, The Wiggin Sessions P.S. âSo it goesâ¦â âJust stop that please,â reader J. Best writes. âYou sound exactly like Linda Ellerbe when she closed her NBC News Overnight segments. It became a repeated phrase for a while in popular America. Oops, whatâs the correct term? A meme? A trope? I hate those words. âSuffice to say almost everyone ended telephone calls and casual conversations with âand so it goesâ in the 1980âs. It was the title of a book she wrote and it glared at passengers from every airport shop. With the advent of the television show Married with Children, Ellerbeâs phrase soon morphed into âwhateverâ accompanied by a look of dumb puzzlement and disassociation. âThereâs a whiff of surrender and protestant belief in the inevitability of the inevitable about the phrase. You deserve better. Even Garner Ted Armstrong closed his thousands of daily AM radio broadcasts with a simple ââ¦.thatâs it. Goodnight.â â Weâd never heard of Linda Ellerbee. And didnât spend a lot of time in front of the T.V. when Married With Children was still running new episodes. Our use of the term âso it goesâ bubbled up from memory, having read Kurt Vonnegutâs Slaughterhouse Five some 40 years ago. Whatevs. We thought you might be entertained by Mr. Bestâs remark. It is Friday after all. Have a good weekend. POWERED BY THE ESSENTIAL INVESTOR The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to The Wiggn Sessions delivering daily email issues and advertisements. To end your The Daily Missive from The Wiggin Sessions e-mail subscription and associated external offers sent from The Daily Missive from The Wiggin Sessions, feel free to [click here.]( Please read our [Privacy Statement.]( For any further comments or concerns please email us at feedback@wigginsessions.com. 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