Let me try to translate my commentary for fintwit about why Dragonbear(China-Russia) has no chance in the foreseeable future to dethrone US and Dollar.
Imagine the US-China competition was the global automobile market pitting the US as Daimler vs China as Tesla. Lets talk money:
Imagine the US-China competition was the global automobile market pitting the US as Daimler vs China as Tesla. Lets talk money:
Tesla's market cap is ~50% larger than that of Daimler or BMW. BMW has sold ~2.4mln vehicles, Daimler ~2.3mln Mercedes-Benz vehicles while Tesla delivered 367,500 vehicles total in all of 2019. How? DEBT. Artificial valuations using debt and fancy production #'s to boost value.
Sound familiar? China hoards Dollars to credit multiple it out to its corporations doing nearly the exact same thing. China's debt/GDP ratio is about 500% high & accelerating up to point that servicing $ debt becomes impossible. Its started to affect its defense building with
cancelled aircraft carriers and limiting its use to aging fighters. China has 2, US meanwhile maintains 19 carriers with 6,000 mile range within 90 mins of being positioned. $1.2 million per day per carrier and you see the daunting mountain for the Chinese to climb in defense.
Lets talk supply chains:
Tesla & China are simply piggybacking on the long established routes Daimler & the US has grown and made efficient. Suppliers for automakers have set contracts in place for parts & services. Would suppliers choose Tesla over Daimler? 2.3 million vs 370k?
Tesla & China are simply piggybacking on the long established routes Daimler & the US has grown and made efficient. Suppliers for automakers have set contracts in place for parts & services. Would suppliers choose Tesla over Daimler? 2.3 million vs 370k?
Shipping supplies is no simple task, sourcing raw materials is complicated. China & Tesla can be disruptive by using their artificial values to spin up the markets in their favor but that cannot last as fundamentals eventually come into play during recessions. Logistics wins wars
China has no operational capabilities outsides its immediate borders & is $ starved & resource dependent on others. Tesla has similar problems in production having to resort to tents & China in desperation
The US is blessed with natural resources & oceans apart from adversaries.
The US is blessed with natural resources & oceans apart from adversaries.
Like the US, Daimler has extensive factories and suppliers globally and can shift production accordingly to produce the volume needed working within standard industry 6% margins. Tesla loses money hoping to win on perception like the Chinese debt bomb doing the same exact thing.
Fundamentals in industrial players like automakers are the same as fundamentals in nations which are just big corporations on steroids.
@Halsrethink @gbponz @RobertMCutler @vtchakarova @chigrl
@Halsrethink @gbponz @RobertMCutler @vtchakarova @chigrl
