At Next Generation Wealth, we believe the China | U.S. seesaw is about to tip our way. Offshore production is out while "Made in America, Again" is in vogue. Chinese wage inflation, running at 16 percent annually for the last decade, has closed much of their cost gap. China is no longer the default location for cheap plants supplying the United States economy with goods.

A tipping point is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture. "A surprising amount of work that rushed to China over the past ten years could soon start to come back," says Harold Sirkin of the Boston Consulting Group.

The gap in "productivity-adjusted wages" may narrow from 22 percent of U.S. levels in 2005 to 43 percent in 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the U.S. Corporate America is putting their money where their mouth is and here is a growing list of repatriates:

• Farouk Systems is bringing back assembly of hair dryers to Texas
• ET Water Systems has switched its irrigation products to California? Master Lock is returning to Milwaukee, Wisconsin
• NCR is moving its ATM output back to Georgia
• NatLabs is coming home to Florida

As Philadelphia Fed chief Sandra Pianalto said last week, U.S. manufacturing is "very competitive" at the current dollar exchange rate. Whether intended or not, the Fed's zero rates and $2.3 trillion printing blitz have brought matters to an abrupt head for China.

Beyond China, Volkswagen is investing $4 billion in America, led by its Chattanooga Passat plant. Korea's Samsung has begun a $20 billion investment blitz in the United States. Meanwhile, Intel, General Motors, Caterpillar and other American firms are opting to stay at home rather than invest abroad. Boston Consulting expects up to 800,000 manufacturing jobs to return to the U.S. by mid-decade, with a multiplier effect creating 3.2 million jobs in total.

Europe has only itself to blame for the current “hollowing out” of its industrial base. It craved its own reserve currency, without understanding how costly this burden might actually prove to be.

Worse yet, the European Central Bank has made matters worse [for Italy, Spain, Portugal, and France] by keeping interest rates above the United States, UK, and Japan. That has been a deliberate policy choice. 

The trade-weighted dollar has been sliding for a decade, falling 37 percent since 2001. This replicates the post-Plaza slide in the late 1980s, which was followed, with a lag, by three percent of Gross Domestic Product shrinkage in the current account deficit. The United States had a surplus by 1991.

In realistic terms, the switch in advantage to the USA is relative. It does not imply a healthy economic recovery in the United States. The global recession will slowly recover as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble.

It is almost the only economic power with a fertility rate above 2.0 - and therefore the ability to outgrow debt - in sharp contrast to the demographic decay awaiting Japan, China, Korea, Germany, Italy, and Russia.

Yet America retains a pack of trump cards, and not just in sixteen of the world’s top twenty universities.

The 21st Century may be American after all. And, much like the mythical bird which could be reborn from its own ashes,the American Phoenix is rising again.