LAUSANNE, Switzerland – European Central Bank chief Mario Draghi set off a riot yesterday.

Investors rushed the stock market, like looters hoping to score a new TV set.

By the end of the day, the Dow was up 320 points, or nearly 2%.

The proximate cause of this hullabaloo was Draghi’s hint that the ECB may go back into the market with more QE.

That and a good report from Mickey D’s was enough to erase the last of this autumn’s losses.

A Changing World

But why would Draghi be ready to expand euro QE?

Maybe he’s been looking at sales figures for the yellow machines.

Caterpillar tells us that not only have sales been falling every month for the last three years, but also that its losses are becoming more widespread. In September, not one of its reporting regions saw an increase.Either CAT is a terribly mismanaged company (unlikely)… or something else is going on.

So let’s take a look at the part of the glass Draghi must be studying – the part that is half-empty.

After all, the former Goldman boy must have some reason to be talking about expanding QE. (We’ll set aside our darker suspicions that it is purely an inside job… the real purpose of which is to help European banks unload more of their mistakes onto the ECB and the public.)

Taking the train from Baltimore to New York, you go through the great metropolis of Trenton, New Jersey. There on the Lower Trenton Bridge, in full view of the passengers, is a faded sign, evidence of the burg’s faded glory: “TRENTON MAKES – THE WORLD TAKES.”

That sign was put up in 1935… when it was true. By the 1980s, Trenton was doing the taking. One of the places from which it took the most was China.

The U.S. was the China of the early 20th century. It was the world’s lost-cost producer, its leading exporter of manufactured goods.

In World War I, it was to the U.S. that Britain – then the world’s leading empire – turned. Britain needed food, fuel, guns, trucks, and everything else necessary to fight a war. The U.S. happily took the orders until Britain went bust.