It’s not a surprise. Or at least it shouldn’t come as a surprise. What did we think was going to happen with all those dollars we sent to China to satisfy our endless desire for the next gadget, for bigger and bigger TVs? You see, when you have a trade deficit, more of your currency goes to them than theirs goes to you. In our specific case, because international trade is usually Dollar denominated, China has been collecting huge amounts of Greenbacks, one iPhone’s worth at a time. Some of that money is given back in exchange for Levi’s, Coca Cola and other stuff made here, but what happens to the rest?
Well, an amazing scenario plays out in the new documentary “American Factory” on Netflix. You see, money wants to make money and these days putting it in the bank yields virtually nothing, so investing it in something is the modus operandi. The Chinese have been buying American real estate, driving up rents and home prices in many places; sometimes not even for actually living in it, or even renting it out, but just to keep the dough safe! What’s more scary is what can happen when they invest in business over here, as evidenced in Dayton, OH when a glass company takes over a shuttered GM plant and promises to bring jobs back to the region and build a real “American” company. Trust me, it isn’t pretty, and in my opinion everyone, EVERYONE, should see this documentary. It gives a priceless insight in both cultures when it comes to work and life; it gives a pretty damn unbiased look at what it would mean for us to have to abide by the Chinese way, what that would really mean for our middle class way of life.
Our trade deficit is quite dangerous, and in effect we’re slowly but steadily eroding our own wealth, giving it away in exchange for what? More plastic crap? Yet another slightly improved cell phone? You’ve got to be kidding me!
