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Inverteum Capital's avatar

Definitely an interesting thesis that the tariffs are designed to enable a transition from cheaper offshore labor to US manufacturing automation.

Would anticipate a lot of short term pain during this transition, particularly because of the massive upfront investment and employee retraining required to pull it off.

One major headwind to this transition is the fact that imported components to enable flourishing US manufacturing are subject to the same tariffs as finished goods. As a result, inadequately capitalized US manufacturers will go out of business and lay off their employees.

China also has a massive advantage compared to the US when it comes to this transition to automated manufacturing. Automated manufacturing benefits from much of the same inputs as more labor-intensive manufacturing: a large pool of skilled and relatively cheap engineers, developed regional supply chain, excellent transport infrastructure (e.g. high speed rail).

It won't be easy transitioning a services-based economy to a manufacturing-based one, even if it is mostly automated. For one, with a factory-based job, there's no way to work from home.

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Steve's avatar

Well if Microsoft controls the dollar, the military and the legal system; I’ll have my gold, in my bomb shelter along with my arsenal every second Wednesday of the month after the updates came down Tuesday night. What a frightening concept!

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