On September 4, the BEA released the latest statistics for investment in US manufacturing. They show that America has been failing to put modern productive processes into place for the last six years. The decline over the past twelve years stems from the US government's policy of letting China steal market share from American industry through currency manipulations. President Obama is the third president in a row to adopt this policy.
As shown in the following graph, gross fixed investment was 1.43% of our GDP in 2008, continuing at the depressed level of the previous five years:
As shown in the following graph, net fixed investment (after subtracting for the wearing out of equipment) was a miniscule 0.29% of our GDP in 2008:
Economists hope that American exports will increase and drive US economic growth. But, given our dearth of manufacturing investment for the past six years, increased exports are unlikely.
Unless we stop China from fixing the dollar at a rate where US manufacturing investment is unprofitable, America's trade deficits will likely grow, leading to an eventual dollar collapse.
Disclosure: No positions.
