Why This “New-New Thing” Will Benefit U.S. Stocks


Why This “New-New Thing” Will Benefit U.S. Stocks

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Onshoring is the new-new thing in corporate America. Onshoring also goes by names like “reshoring,” “near-shoring,” “localizing,” and even “friend-shoring,” as in, doing business only with friends.

But at its core, onshoring is just another word for “security.”

Every time an American corporation transfers any facet of production back to the U.S., the company’s supply chain becomes more secure. It becomes more disaster-proof against supply disruptions, no matter whether they be caused by transit bottlenecks, geopolitical events, or acts of God.

During the past three years, U.S. corporations have had their fill of disruption and are now rejiggering their supply chains to bring them back home.

The long era of globalization is over – putting an end to a trend that is almost as old as America itself.

But as this one trend ends, a new, profit-producing one emerges.

So, if you’re ready to invest in the opportunities that are about to explode stateside, read on.

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When the Big Bang Sputters Out

The centuries-long evolution of U.S. supply chains resembles the Big Bang theory of the universe. What started out as a contained nucleus of commercial activity has exploded into the massive, ever-expanding firmament of globalization.

In the early days of American expansion, pioneers became self-sufficient by necessity. Before heading West, they packed their wagons with high-tech gadgets like rifles, axes, metal pots, and horseshoes. But once they left civilization behind, they had no choice but to rely on themselves.

Gradually, sporadic barter developed between distant neighbors and/or Native Americans. Then, local commerce popped up, like what the “General Store” provided. From there, national supply chains developed, and then rail- and shipping-based international supply chains.

This, of course, gave way to cost-effective air travel integrated with land-based transport to create global supply chains.

Despite the complexity and fragility of these supply chains, they successfully enabled precise “just-in-time” production processes for decades.

As a result, many businesses learned to trust those supply chains completely. They learned to give no thought to “just-in-case” precautions, like holding excess inventories or securing redundant suppliers.

But the “just in time” mindset died during the pandemic. As a result of the coronavirus, the ever-expanding Big Bang of globalized trade came to a halt… and started to reverse course toward something less global.

The Need for Supply Chain Security

For most of the last four decades, American corporations gave little thought to the theoretical risk of supply-chain disruptions. But that nonchalance has ended.

The global pandemic, combined with trade wars and shooting wars, have converted theoretical risks into palpable ones. As a result, American corporations are rushing to deglobalize their supply chains and repatriate as much of them as they can.

Job creation as a result of onshoring by year

“We’re seeing the balkanization of the world economy,” one prominent mining entrepreneur remarked recently. “The Chinese want to secure their entire supply chain, top to bottom, womb to tomb – the Americans also.”

Although this quotable entrepreneur was referring specifically to the metals that feed the renewable energy industry, his observation applies to most other supply chains.

Like the Chinese, we Americans also want to secure our “entire supply chain, top to bottom, womb to tomb.” The more that U.S. corporations move in this direction, the more they safeguard production.

The U.S. electric vehicle (EV) industry provides one illuminating case study.

Dozens of American and foreign automakers have been ramping up their EV production capabilities inside the U.S., but the “American-made” EVs that are starting to roll out of these new factories rely heavily on supplies and components from overseas, especially from China.

As a supplier to the worldwide EV industry, China provides about…

  • 80% of the graphite material for battery anodes…
  • 70% of the refined cobalt…
  • 55% of the primary nickel…
  • 60% of the lithium chemicals…
  • 79% of all lithium-ion batteries…
  • And 85% of the processed rare-earth elements.

The picture that emerges from these percentages is impossible to miss; China dominates most of the links in the worldwide EV production supply chain.

That’s not an ideal structure for U.S.-based EV manufacturing.

The nascent boom in American-made EVs might not boom for very long if EV manufacturers continue to rely heavily on battery-metal inputs from China and other distant lands.

Obviously, the American EV industry cannot end its heavy reliance on Chinese supplies overnight, but it can put a dent in that reliance… and that’s exactly what’s happening.

America’s New “Epicenter of Wealth” 

As U.S.-based EV makers steer away from China and reshore their supplies and components back home, there are plenty of reasons to believe that there is a chance to make a lot of money – right here in America.

If you get in early enough, the end of globalization could provide you with not just one opportunity… but dozens of chances to build your wealth over the years and even decades ahead.

And it will all take place within a 300-square-mile radius.

There is an economic “supercluster” of EV innovation happening, and it’s going to mint brand-new millionaires out of the few folks who understand how to take advantage of it.

Companies are making billion-dollar-plus investments in this supercluster, and you can get in on the ground floor of what I call “Made in America 2.0,” the push to bring revenue and industry back to the United States.

Get all the details here – including one of my top EV picks, absolutely free.

Article printed from InvestorPlace Media, https://investorplace.com/smartmoney/2023/03/why-this-new-new-thing-will-benefit-u-s-stocks/.

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