The Coming Hyperinflation of Deglobalization | The End of America

of the greatest fears of this

recessionary cycle is that D

globalization will lead to the greatest

hyperinflation of Our Lives that it's

not just the expansion of the money

supply making Austrian economists roll

over in their graves it is not just the

money Printing and stimulus that led to

the greatest inflation since the 1980s

for over 40 years but is actually

potentially the frustration that

businesses face due to broken supply

chains during the covet pandemic that

potentially will lead to

de-globalization and therefore massive

inflation the argument is simple you

can't trust China anymore you can't

trust the existing Supply chains so

everybody needs to reassure and this

argument has been made for years that as

companies will reassure their products

and their manufacturing back to America

the costs of manufacturing will go to

the moon and if the costs of

manufacturing go to the Moon folks we

are all screwed because we will feel

nothing other than hyper inflation and

so I've written out this thesis on a

document here and then we're going to go

into a piece from TS Lombard on

globalization let me first give you this

reminder remember the 2022 theme we will

have hyperinflation because you can't

trust China we're going to onshore all

manufacturing we're going to rebuild our

own Supply chains because we can't trust

anyone and what was Kevin's response

Kevin's response was very simple the in

my opinion this was my opinion okay my

opinion was that thesis was ludicrous if

you've been watching my channel for over

a year now at least a year you know that

I've regularly said this idea of

de-globalization and hyperinflation is

ludicrous my thesis was

why would you let one supply chain snarl

ignore or lead you to ignore the cost

benefits of lower labor costs in other

countries remember that is also a

benefit to other people right when we

bring jobs to Mexico where the average

hourly wage is 3.50 cents and we build a

Tesla gigafactory there what does that

actually mean it actually means you're

creating more demand for labor in the

area which gives the wage earners more

pricing power which allows wages to go

up but it's still cheaper than what you

could manufacture for in America so it's

disinflationary for Americans and it

helps grow a market wherever we go

so I called for something known as

re-globalization you know this we've

talked about this pretty regularly I've

regularly talked about

re-globalization as my thesis for what

would happen and I believe and at the

same time we've seen Apple then move to

India Vietnam and Mexico gaining a lot

of cloud along with Indonesia Taiwan uh

becoming basically an area known for its

Advanced chip making now especially with

Taiwan semiconductors but then we also

have China now freaking out and really

saying oh my Lord we may have messed up

how can we get American companies back

this was a big deal right in China after

all with Xi Jinping making his

conference in front of the Chinese

Communist Party applauding Central

planning and socialism but for the first

time nearly ever applauding capitalism

as something that would be a priority

for them and now inviting whom well not

only American companies back but

recently meeting with Tim Cook and

meeting again soon with Elon Musk the

premier inviting Elon Musk back to

Shanghai why so they can brag about the

success story of American manufacturing

going to China that's what China is good

at they've become really good at

manufacturing consider what foreign

affairs told us about China they told us

that the Chinese when they decided to go

all in on solar panel solar panel

manufacturing not only do they make the

cheapest solar panels but they made the

best solar panels so what do we finally

have the institutions now saying well

look look at this folks I feel

Vindicated I feel Vindicated T.S Lombard

the future of re-globalization I saw

this and I just about fell off my bunk

bed this morning I cannot believe that I

actually have now for the first time

since we've been talking about this for

years actually seen an institution

finally talk about

re-globalization I could not be more

happy I can help I'm so happy my heart

is palpitating at such high levels I

have to remind you to get life insurance

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courses okay so the future of

re-globalization what do we have here

well hyper globalization may be over and

the U.S China decoupling may actually be

fueling not a de-globalization but a

re-globalization and in other words

Mexico Vietnam Taiwan India Indonesia

are the Future these are now the winners

as uh global companies International

multinational companies seek to rebuild

Global Supply chains and Mexico will be

a very large beneficiary of not only the

inflation reduction act but the move

away and out of China China is then

widely expected to fight back against

Mexico and India India and Indonesia

trying to take this expansion the more

Mexico India and Indonesia take business

from China guess what happens the more

China tries to incentivize manufacturers

to go back to China folks what happens

when China tries to incentivize people

to go back to China because people are

now fleeing to India and Vietnam or

Taiwan you have a pricing War you have

lost PP they manufacturers the

manufacturing Nations have lost their PB

their pricing power is waning well the

Legacy wants right the Legacy

manufacturer of China is losing its

pricing power instead you now have more

people wanting to share PP as a result

American companies multinational

companies the Teslas the Volkswagen the

the Fords the GM's uh the the the

massive ones like obviously the apples

the Microsoft they all benefit end phase

massive International production

producer now of of Asic based micro

inverters building factories over where

top G has finally managed to go from

jail to house arrest allegedly according

to the BBC uh we'll see what ends up

happening with that but anyway we'll see

so focusing here on what this means

re-globalization folks is a fancy way of

saying prepare for big

fat

thick

deflation

yes big fat deflation I believe that

this competition

between China losing what it was once

good at and everyone else will actually

likely lead to more deflation especially

as India and Indonesia and Taiwan

realize they have a limited window here

before China slaps back now keep in mind

that in the past India has failed at

becoming a low-cost Global Tech Hub why

because of labor laws infrastructure and

bureaucracy that continues to constrain

the managing sector let me give you a

simple explanation as to why this

happens in India versus China

China is centrally planned China is

communist we know this there but they

they are starting to enjoy some of the

benefits of uh of of capitalism right

but in a centrally planned economy what

do you have you have the ability to

streamline construction you can build a

gigafactory in Texas or Berlin in two

years you can do it in one year in China

in and the reason you can do that in

China is because you have Central

planning Xi Jinping can pick up the

phone and say get it done and then it

gets done

water lines are built in 40 days the

sewage systems the Plumbing Systems the

electrical grids everything gets

re-enginated

to accommodate

Tesla via Central planning that is one

of the Fantastic benefits of central

planning Central planning in China is

deflationary for America

recognize that

now what about

India Well India is very different

India's government is like a fractal

system where every local government the

more local you go the more the rules are

different there's no consistent

permitting between different locales and

municipalities there's no Central

planning everything is based on Whose

pockets are getting lined more at the

local level and I don't look I'm not

trying to suggest that NDS corrupt I'm

trying to suggest that it's a developing

country and there's obviously going to

be less transparency than in other

countries but the point here is TS

Lombard is making a clear argument that

maybe it's not as easy to say oh let's

just go to India or Vietnam and China

realizes that and that's why I think

China over the next year is actually not

going to be a massive negative for

America it's actually going to be a

massive Boon for disinflation so this

call for re-globalization I think is

fantastic especially since now we're

moving to this idea of going from a just

in time style of menu manufacturing to a

more of uh just in case model uh this

this is really a wave okay let's

understand that really quickly basically

companies generally don't like holding

inventory on their shelves because it

rots it gets stolen it decays it

depreciates

so usually if you're manufacturing a car

you want the wheels for the car to show

up the minute that you actually need

them not any sooner that's very

important for keeping your costs down

very important but what's incredible

here is that now companies are running

such more resilient Supply chains that

once they actually move to more of a

just in case model and they have more

inventory on the shelves and much

smoother Supply chains we will probably

go from normal Supply chains like let's

let's draw that out just to understand

the thesis of deflation here for a

moment if if this was your normal supply

chain and the supply chain got very very

expensive because of coven and now the

supply chains are becoming looser you

will probably through re-globalization

you will probably have cheaper and

looser Supply chains than you ever had

pre-pandemic so the pandemic might be

exactly what we needed to end up

creating less this or less inflation and

more disinflation potentially deflation

it's actually a fantastic piece here on

why disinflation could could be coming

thanks to

re-globalization now there is still the

fear that there will still be political

Strife between China and America after

all uh China is being labeled as a

foreign country of concern or a foreign

entity of concern which actually limits

some of the benefits of manufacturing in

China and limit some of the tax credits

of businesses being able to do business

in China who also want to take tax

benefits in America in fact there was

just a massive piece let me see if I can

pull it there was just a very massive

piece about how ship companies will

potentially have to choose China or the

United States it's actually very

relevant to this discussion right now

let's go ahead and pull that up and

while I don't think that will end up

being true in the long term I think in

the near term that could be a choice

that businesses have to face

especially since you're seeing that as

well uh with

I think this is like a Baron's piece or

something like that uh but anyway

especially as you're seeing that with

now uh ah there we go found it it was a

Wall Street Journal piece let's go ahead

and pull this up together we'll look at

this together

uh oh it's gonna make me go vertical

that's lame no I don't want to do that

let me see if I can get it on my laptop

but anyway uh the argument is that well

I mean maybe you can get disinflationary

deglobalization but if politics stand in

the way then what you actually

potentially risk is

more inflation in the short term as

basically companies try to get their tax

credits in America but by getting the

tax credits in America you're actually

printing stimulus checks again right I

believe that I actually believe the

biggest stimulus checks that are going

out right now are going to chip

companies and energy and Battery based

companies there's a reason my biggest

exposure right now to uh stocks is in

the space of chips and energy because

that's where the stimuli checks are

going folks and after all remember I'm

your stimmy check expert

uh anyway so let's look at this Wall

Street Journal piece because it gives us

some really good insight

stand by I will share the screen thanks

to stream yard let's see how easy it is

oh that's so easy that's nice actually

can I do this no that goes to my phone

this

works pretty well

that's interesting I'll have to play

with my little default settings a little

oh that's kind of cool that's not as

cool

that's not as cool this is pretty cool I

love this thing the software is so cool

anyway okay so four chip makers a choice

between us and China Looms

the semiconductor companies seeking

federal grants under the chips act could

face a tough decision take Washington's

help to expand in the U.S or preserve

their ability to expand in China the

Biden Administration last week proposed

new rules detailing restrictions chip

companies would face on operations in

China and other countries of concern if

the companies accept taxpayer funding

some of the proposed restrictions known

as China guard rails were tougher than

the industry expected lawyers and

National Security analysts said they

expect blah blah blah basically now

there's the potential because of these

stricter restrictions that uh basically

companies might have to decide do you

want to manufacture a lot of your pieces

or parts in China or not now you could

potentially manufacture

non-asscent what the heck is iPhone

yellow you could potentially manufacture

non-essential

uh Goods in China these could be

non-advanced chips or they could also be

um chips such as uh piece parts and cars

that are not Advanced or non-battery

related parts and cars you can still

manufacture cars in China so gig of

Shanghai doesn't get killed just a lot

of the assembly and Battery tech has to

be done in America I really think

companies I really think let me put it

this way I think a lot of this is

unnecessary fear uncertainty and doubt

now notice that's a difference from just

calling it fud but I think a lot of it

is unnecessary because I think companies

will be smart and they'll adapt see look

at this Samsung is building a 17 billion

dollar facility in Taylor Texas oh

that's interesting I didn't actually

know that I'm going to look up Paola

Texas maybe that'll be a place for house

hat

I want semiconductors is building

outside of Phoenix you've got Intel

building like crazy in Ohio I believe it

is but you also have now a partnership

between Tesla and catl expected to be

built in America uh it's being mold

apparently right now Tesla said to be

molding battery plant uh Partnerships

somewhere in America this is all to end

up getting the tax credits so that's why

I think there's there's potentially a

little too much for your uncertainty and

doubt because I think these companies

will just manufacture in America that

could increase costs but here's another

thing that nobody's talking about right

now you could literally just move this

type of manufacturing to Mexico and you

could get the benefit of the lower cost

of doing business uh while also

potentially getting

uh uh the tax credits right so you could

get the lower labor costs I mean this is

all of these acts that we have passed in

my opinion are just a literal Boon to

Mexico it would not surprise me to see

like

maybe even like an apple assembly plant

or some form of Apple manufacturing uh

there we go uh in in Mexico so that way

you can get North American credits when

they're applicable uh if you need to get

energy credits manufacture your Asics

for end phase in Mexico uh in the

meantime we saw this ad for a yellow

iPhone I did not know they were doing a

yellow iPhone this is just me being

getting distracted by a squirrel

basically

um but yeah they've actually come out

with more colors here look at that what

is this purple

my goodness I guess the yellow one's the

new one it's actually kind of cool I

like that anyway I don't know why I got

distracted on that uh so uh I think this

is uh somebody here on Twitch just wrote

can we talk about the attack on the

Petro dollar that nobody is talking

about well apparently you missed my

video where I literally went into detail

on this yesterday so if you type into

YouTube meet Kevin Petro dollar let me

get you the exact title of the video uh

oh yeah here it is the collapse of the

dollar the end of America and the rise

of China now it's actually extremely

proud of uh of this thumbnail I made

this thumbnail

and let me click the right button here

which button do I want this button yeah

look at that top thumbnail how sexy is

that I mean look at that thumbnail I

mean it's just like it's like the dollar

but it's like a zombie dollar but anyway

if you type this in on YouTube you will

learn everything you need to look it

even says hashtag petrodollar see that

the collapse of the dollar the end of

America on the rise of China if you have

not watched this video yet I highly

encourage it because it will tear apart

your fear of uh the Petro dollar here

so anyway okay good very well so now A

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