Here is another illustration of the Great Deformation unraveling in plain sight.Nevertheless, this particular Reuters story laments an unexpected 25% drop in exports of bulldozers and monster mining machines during 2013, and notes, incredulously, that it snapped a “three year export surge that has been one of the bright spots” in the U.S. recovery. This narrative is merely typical, however, of the bubble blindness of the mainstream financial press—of which Reuters is among the worst offenders. The implication is that Washington needs to unleash some more stimulus tools.
Feb 26 (Reuters) – Foreign sales of U.S.-made construction equipment dropped sharply in 2013, snapping a three-year export surge that had been one of the bright spots in the country’s halting economic recovery, according to a report released on Wednesday by a leading industry trade group.
Yet, that only follows from the unexamined premise that wise anti-recession monetary and fiscal policies plus the inherent virtues of the American economy have been generating an organic, sustainable recovery since 2009—especially led by exports. Accordingly, the frightful days of the financial crisis and the Great Recession are safely fading into the rearview mirror, notwithstanding bumps in the road such as $5 billion collapse in exports sales of one of America’s most potent and competitive manufacturing industries.
Well, the decline isn’t temporary, and is not indicative of a competitive stumble by the mighty trio of Caterpillar, John Deere and Terex Corp. And most especially there is not a damn thing Washington policy makers can do about it: they should keep their stinking export subsidies and other taxpayer fleecing schemes looked in their drawer.
In truth, this sharp decline is just another developing fracture in the global economy stemming from the violent boom-bust cycle that has been generated by the world’s rogue central banks. At the last boom-cycle peak in 2006-2007, the trios’ heavy machinery exports hit nearly a $20 billion rate and then collapsed violently to $12 billion or by roughly 40% when world trade plunged in the winter of 2008-2009.
Soon enough, however, the Bernanke Fed was flooding the world with massive new dollar liabilities—-the Fed’s balance sheet went from $900 billion in September 2008 to $4.3 trillion and counting at present—-and the People’s Printing press of China responded by hauling in a tidal wave of these hot dollars at a furious pace. This maneuver by the red capitalist oligarchs in Beijing was to keep the RMB from soaring and it’s export industries from taking an even deeper plunge–a potential disruption to China’s hothouse economy so severe that it could have sent the oligarchs plunging from their perches, too.