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When did we become so darned unimportant? When did we officially become an annex of Europe, where we trade with the worst of the worst, the lowest of the low: Greece, Spain, Portugal and the like?
I think the answer is when we failed to create any jobs to speak of and became a suspect place in which to do business. I think we became this when our budget deficit became laughable and everyone knows that our balance sheet on any other country would send our interest rates soaring. I think we became this when it was clear that China tightening was more important than out loosening.
That's the bad news.The good news is that with the sudden break in commodity inflation we have a chance to create some wealth in the companies that export overseas and are dependent on emerging growth. That's because emerging-growth countries will stop being forced to slam on the brakes, as they have for most of this year. Let's focus on three areas. The first is American companies with big businesses overseas. That's what brings me the autos, specifically General Motors (GM). Here's a company that people got all excited about because of Chinese sales -- not American sales. But the company's IPO window coincided with the shutting of the cheap-money window in China. I expect that by September, after this oil intervention, China will no longer be actively trying to slow the economy down. That means GM can start selling many more cars. It is a huge swing factor and the base in the stock is showing you that's what's to come. Other companies, Cummins (CMI), Caterpillar (CAT), Joy Global (JOYC) and Freeport (FCX) can be winners. Heaven knows they've been crushed. But it is GM that I think does the best in this environment.
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