The Odd Decoupling

By Bill Tatro
Friday, January 06, 2012

Decoupling is such a wonderful word.

When I hear it, I’m reminded of my younger days as I grew up while living near a train station.

I would look out my bedroom window at night and watch the passenger trains go by wondering who the people were. Where were they going? What were their stories?

That was the 1950s, a long time ago.

Periodically, the train engineers would remove empty railroad cars from the train, and leave them off to the side. The train would then continue along without the removed cars, officially deeming them as decoupled.

The decoupling was real; you could see it with your very own eyes.

Today, we are supposed to believe the United States is decoupled from the rest of the world.

For the past several years we were told by the pundits and so-called Wall Street experts to ignore the U.S., and focus on Brazil, Russia, India, and China (“the BRICs”). They said our future was in their hands.

Occasionally, we would also hear how the euro could be the next global currency. The pundits added that we had been decoupled from the world, and the growth engine was going to come from foreign shores.

Now, it’s just the opposite. As inflation/deflation, unemployment, regime changes, banking disasters, and outlandish indebtedness engulfs the world, we’re told we are still decoupled.

However, the experts now say WE are the new growth engine.

Our exports will rise, they declare. But exports signify that someone else imports. Who could that be? Given that Japan, China, Germany, and many others are also exporters. We’re told our consumers are on the rebound, as long as our products have value (code for giveaway.)

We’re told our banks are on the mend and have little overseas exposure (MF Global? Hmmmm.)

Finally, we’re told that employment is on the rise and high priced jobs replaced by low wage jobs will have no affect on us.

After all, we are decoupled, and we are the new growth engine! Unfortunately, there never was, there never is, nor will there ever be such a thing as decoupling.

All the problems that other countries face, we share the very same fate. Alas, we will always be connected, invariably.