Executive Summary

• Will profit-chasing bring corporate capital back to the U.S.?
• China's dwindling T-bill leverage
• The decline of dependence on Mid-East oil
• Autarky may be the best investment for the U.S. (and similar nations)

If you have not yet read Part I: What If Nations Were Less Dependent on Another? available free to all readers, please click here to read it first.

In Part I, we sketched out a framework for evaluating the trade-offs implicit in autarky; i.e., national self-sufficiency.  In Part II, we’ll explore a few potential ramifications of America’s declining consumption of energy and increasing ability to replace foreign-supplied capital, resources, energy, and expertise with domestic sources.

The core issue of autarky boils down to: What are the risks and costs of exposing the nation to the vulnerabilities of dependence for the convenience and profitability of remaining dependent on foreign providers?

Of the potential consequences, let’s focus on several high-visibility possibilities:

1. China’s ownership of U.S. Treasury bonds possibly giving it leverage that amounts to blackmail-type veto power over U.S. policies.
    
2. The dependence of U.S. corporations on foreign sales and the weak dollar for profits
    
3. The decline of oil imports changing the calculation of U.S. interests in the Middle East and other oil-exporting regions

Profits as Priority

As I have often noted, the stupendous profitability of U.S.-based corporations is largely the result of non-U.S. sales and the profits reaped from a weak U.S. dollar.  When the euro was at parity to the dollar a decade ago (1 euro = $1), U.S.