TL;DR
Trump’s plan to challenge China’s mineral control by investing in miners reeks of past economic blunders. Expect subsidies, cronyism, and taxpayers footing the bill for another market distortion.
Story
Trump’s plan to counter China’s mineral dominance by investing in U.S. miners sounds like a replay of past industrial policy failures.
It’s presented as a patriotic move, boosting domestic industries and reducing reliance on foreign powers. Sounds familiar, right? Governments love throwing money at problems, hoping for a miracle cure. But like the housing bubble before 2008 or the dot-com crash, good intentions often pave the road to financial hell.
Here’s the likely scenario:
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Subsidies and tax breaks distort the market. Companies chase the free money, not necessarily what’s economically viable. This leads to overproduction and wasted resources—think ghost towns built on the promise of gold rushes. ‣ Subsidies: Government handouts to businesses, like free candy that rots your teeth.
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Cronyism thrives. Connected companies gobble up the subsidies while smaller players get squeezed out. Imagine a pie-eating contest where only the rich kids get forks. ‣ Cronyism: Favoritism towards friends and allies, usually involving money or power. Think backroom deals and insider trading.
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The taxpayer foots the bill. When the inevitable bubble bursts, guess who’s left holding the bag? The average Joe, whose taxes funded this whole charade. Remember the bank bailouts? Same story, different costumes.
Trump’s sudden interest in ‘minors’ also rings alarm bells, considering his past associations. This adds a whole new layer of cynicism to the narrative. Is it about national security or self-enrichment?
The sad truth is, these grand plans rarely help the people they claim to serve. The real winners are usually the well-connected, leaving everyone else in the dust.
Advice
Don’t buy the patriotic hype. Government intervention in markets rarely ends well. Be wary of companies benefiting from these schemes—they’re usually the first to collapse when the bubble bursts.