Pig number three came out of the shoot like a house on fire. It had a clear lead by the second turn and was breaking away before it got jammed into the outside lane and smashed into the metal fence.
The other three pigs scrambled and pushed, leaving the yellow pig in the fine gray dust, churning its front legs to gain purchase. One last turn, and they are down to the final stretch… a quick scamper up the ramp, across the finish line, and into the trailer.
Team red won by a snout, and the seating section next to us erupted in applause and the shrill enthusiastic scream of a seven-year-old girl.
We are at the Howard County Fair.
A gaggle of teenaged girls walks in front of us. They are dressed in cutoff jeans and plaid shirts tied up to show their bellybuttons.
They aren’t cowgirls by any stretch of the word. This is Howard County, Maryland, and due to its proximity to Washington, D.C., coupled with its strict building codes (nothing less than three acres), it is the third-richest county in the United States in terms of household income.
No, these girls who jostle and cluck like chickens are wearing the costume of what they think cowgirls look like. And they do what all young people do at the fair: strut down the midway and cast shy glances at the opposite sex.
The boys, in turn, push each other and try to work up the courage to talk to the girl they knew from science class. It is part of the great business of being human.
It is a beautiful summer evening. A cover band tries to overcome the bad speakers with enthusiasm and fiddles. They play a song about a cheating man and his souped-up four-wheel drive.
It is a perfect world of American clichés.
“I wonder what a foreigner would think of all this,” I ask my beautiful wife.
“They would probably think cowboys will pop out and have a gun fight.” She laughed.
“Yes, they might.” The smell from the cow-barn is dank and earthy.
Despite the “end of the world” media rhetoric, the view from the fair is alright.
Gold
Gold has been falling for the past few years after topping out in 2011 at $1,873 an ounce. It is down to $1,118 an ounce today.
Many people thought that with all the money printing, the global debt explosion, and the currency wars, gold would ramp higher on an inflation surge.
That hasn’t happened. The dollar is strong. It is commodities that are getting creamed.
China, the big buyer, has stopped buying. The great Chinese factory isn’t doing so hot. Trade numbers were bad last month. Exports were down 8%, and imports fared just as poorly.
China has a number of problems. Success over the past 25 years means China is no longer the land of low wages. Furthermore, cheap and abundant natural gas in the U.S. means low-cost electricity, which cuts power expense up to 50% for companies that make steel, aluminum, paper, and petrochemicals.
This feeds into other micro-booms like commercial aerospace, which is why Warren Buffett just paid $32 billion, a 21% premium over the market, for Precision Castparts.
Given these facts and the hassle of manufacturing in China — what with the copyright rip-offs, the lack of contract law, and the logistics — business leaders are going back to America.
Hidden Boom
There is a stealth manufacturing boom in the United States.
As reported in Cleavland.com:
Since 2010, manufacturing companies have added more than one million workers. Similarly, the value of production from America’s factories has jumped from $1.7 trillion in 2010 to $2.1 trillion last year and now accounts for 12 percent of our gross domestic product (GDP).
… the average cost to manufacture goods in the United States is now only about five percent higher than in China and 10 to 20 percent lower than in major European economies.
According the Boston Consulting Group, by 2018 production costs in America will be three percent cheaper than in China.
China can no longer compete. This is why it slashed its currency 4% over the pass few days and tossed Wall Street into a tizzy.
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American Metal
At the fair, we walked past the sleek new American metal — a big John Deere machine resplendent in its green and yellow. But farmers are overstretched, and corn is half the price it was two years ago.
There are Kubotas in orange. Kubota is a Japanese company, but half of the machines are made in Gainesville, Georgia.
Soccer Moms and Gangsters
“This is what we need,” I said as we stopped in front of a 2016 Chevy Suburban. It was long and dark, shiny black.
“It looks like a hearse,” my wife quipped. And it did.
I opened the door, and a running board eased out near my shin. The inside was leather and wood, lights and flash. The seats were big enough for an NFL lineman.
A saleslady appeared next to us and asked if we liked it. I squinted through the dark glass to see the price sticker: $79,000.
“I know, it’s ridiculous,” she said, shaking her head. “And that’s before taxes and tags.”
That’s more than my first house, I thought. And I’m not that old.
All the best,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
