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.

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Uh, and the 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 Plus Photoshop work Hey thank you now I Have to run to the Elite Hustlers Course member live stream so I Highly appreciate you all being here.

I Absolutely encourage that you make sure you take advantage of the 69 off coupon code. We're going to Metcava.com Join: Make sure you go to Metcaven.com streamier to learn about how I did the stream today. Make sure you go to Metcaven.com life to get your life insurance in as little as five minutes which you can Apple pay or Android pay for And of course make sure you get 12 free Stocks by going to Mykevin.com Weeble 12 Totally freestyle Stocks by signing up at Weeble Met Kevin.com free. You can sell those stocks right away and folks we'll see in the next one.

Thank you so much! We'll see you in the Elite Hustlers Live stream for Saturday morning next.