By Joe Montero

Morgan Stanley, one of the biggest American multinational investment banks and financial services company, revealed that at the end of 2024, reported that United States corporate profits were on a high. Predictions so far this year are almost as rosy. How can such a well-resourced institution like this see a different reality to just about everyone else? This is an important question.

Morgan Stanley, one of the biggest American multinational investment banks and financial services company, revealed that at the end of 2024, reported that United States corporate profits were on a high. Predictions so far this year are almost as rosy. How can such a well-resourced institution like this see a different reality to just about everyone else? This is an important question.

Part of the answer lies in that the analysis is based on a small sample of American corporations, and these are weighted to those depending far more on exports than the home economy to do business. There may be some winners in this regard. Some agricultural products have been an example. But the main export industry is investment capital, and a large part of this is the export of credit.

Another part of the answer is that Morgan Stanley’s growth is based on 10 corporations, and much of this comes from what is called market capitalising. In other words. Increasing a company’s size through buying up shares in other companies. This is cannibalism and not real economic growth.

A second gain for these corporations has been from the capacity of the United States to transfer a considerable proportion of its problems to the global economy. This is because of its economic linkages to other nations, and the impact on the global economy. One result is that other western currencies lost even more value than the American Dollar in recent years. The tables have turned this year, as returns for United States investors in currency trading has fallen significantly. By around 9 percent with many European countries and Japan.

Charlie Bilello, the chief market strategist at wealth manager Creative Planning, lists the decline in United States earnings from currency transfers. The table below represents the current position.

For United States based corporations in the business of trading in currencies and providing loans, a relatively stronger dollar last year meant extracting more by making access to finance more expensive. This is not genuine economic growth either. In any case, Trump’s economic war against the world is feeding a speed up in the fall of the Dollar.

The third advantage is to those able to use the opportunity of putting their capital into futures markets in gold, oil, property, and certain agricultural products (such as the price soybeans going up 4 percent so far this year). Although risky, growing instability in the global economy provides very profitable opportunities. Speculation means trading in already existing assets. The gain is from speculation on future prices. Buy cheap, hold onto it, and then sell at a higher price. This is not genuine economic growth.

Back in the United States, the losers are corporations unable to keep up with the race towards monopoly, and most of all, those depending on making things, especially those who have transferred their productive capacity overseas. Their products have become more expensive and the margin of return on their investment has narrowed. Add falling consumption, the flight from riskier assets, the impact of waging war in Ukraine, and overall loss in confidence at home and in the United States abroad.

These are problems being exacerbated by Donald Trump’s policies. This year’s decline in the Dollar mentioned above is both a cause and a signal of something deeper, and internal to the American economy.

The brunt of Trumpism is to push further the advantages of the type of corporations Margan-Stanley is concerned with. And Morgan Stanley is one of them. The problem is that the massive overreach is starting to produce vastly different results. The slow decline of the American economy is picking up pace. The attempt to export the crisis is causing counter reactions across the planet. The rise of BRICS as a counter to the United States dominated international trade and financial regime, is the most important. Other alliances are emerging.

All seek to break dependence and promote alternatives to existing control and subjugation to the monopolistic regime of a declining power seeking to maintain control by all means.