Let us examine the recent tariff's on steel and aluminum. Today, there is nothing but lies in the so-called free market. If the foundation of modern trading is based on lies, where do we begin?
Gold Standard
When modern nations entered the 20th century, countries traded as today, but the market had a control device in the British pound. The pound was backed by gold which kept currencies stable. This kept an even keel in the ebb and flow of trading. There was little room for currency manipulation until central banks and politicians began to push the envelop of manipulation. In addition, modern industrialization increased production and productivity. This led to undercutting and the undercut tee, to find a solution. These combined actions eroded the value of the pound and the English central bankers panicked. They raised the value of the pound above gold. Idiots!
Then, nation's with fiat money, exchanged their pounds for British gold until the English gave up. They exited the gold standard. This left a vacuum in world trading. As global trading declined, unemployment rose. In seeking to grow exports, countries began to tinker with their export/import policy.
Now, what I have not mentioned in this overall picture is the actual internal process to export or import in the main industrial nations. Every nation, I repeat, every nation except the US, used as a foundation with their largest firms, state support. An exporting company could count on their government for financial support like loans below market rates. They received protective measures in the form of laws and regulations that made importing competition extremely difficult. Then, they added a layer of license procedures and finally, they implemented a standards policy. Now, I will say that the standard policy has value in today's market with GMOs and artificial ingredients, but overall, this is just another level of protectionism.
One aspect that I won't get into in this piece is theft of intellectual property, disregarding of patents and the illegal copy of brand names. In the past Japan didn't respect our patents. S. Korea is always a threat to steal intellectual property, but the clear violator in today's market is China. They steal, copy and even when they receive permission to produce a product, they cut corners by substituting cheaper materials...Back to the historical progression...
Our individual companies were competing against nation backed entities who used fiat money and in the past, we used the gold standard. Our government should never have allowed a convertibility of fiat for gold. One is real and the other is fake. Idiots!
While this occurred, our nation saw a collapse in the stock market. In seeking to bolster jobs through exports and to help American farmers who throughout the 20s suffered with low prices and drought, politicians acted.
Smoot-Hawley Tariff Act
So, in 1930, Congress passed the above act. It heavily favored farmers to export their crops. The global community followed suit with direct taxes on imports along with all their already in place protective measures. World trade declined. The world turned to violence.
WWII
As the war moved into its apparent conclusion, the allied nations held a summit in New Hampshire. In this gathering, the members agreed to make the US dollar that was backed by gold, the new central point to value currencies for market trading. This conference also established the IMF and World Bank. They were suppose to act as a layer to keep market balance in the pluses and minuses of trades between nations. This mechanism held up very well until personal egos with foreign policy among nations caused riffs. The worst were the French and Swedes who demanded US gold for their dollars. As our nation's deficit grew, our politicians panicked. In 1971 president Nixon shocked the world by ending the convertibility of dollars for gold. This killed the gold standard and began our nation into the decent into fiat currency. I could write a book on this section. The US decline from gold really began in 1913 with the formation of the Federal Reserve, but blog space is limited. Bankers are for fiat to which our founding fathers were against. Enough said!
Nixon found an answer in Saudi Arabia. Since oil became crucial to modern economies and it is the most traded commodity, Nixon agreed to back the House of Saud who in turn would only use US dollars in oil. This began the petrol dollars to which today, global nations trade.
China
The oil trading platform held up until the world began to use China to stop inflation at home by importing cheaper products from the Chinese. This is how China surged to lead the world in trading. If our so-called market were free to act, the Chinese money would be so high that no one would take their exports due to the value of their currency. How come it isn't? Because trade is UNFAIR! Also, it is worth mentioning that oil is losing to technology along with geopolitics which will kill the petrol policy of trading.
Conclusion:
The market is not free, but totally out of synch. If one looked at US steel production, it only gets crumbs in world production. At one time, it led in world production. US aluminum was number one too, and today, it only produces 1.2% of world production. I could mention almost every industry. We invented the radio and TV, but state sponsored companies killed our companies. We invented solar, but foreign nations run the industry. We invented the computer, but all production went overseas. The story is the same with textiles, furniture, auto parts and auto manufacturing. Almost every aspect of our once self-sufficient economy is now imported or manufactured somewhere else. It is so bad that we import food. Can you believe that?
In addition, I could mention the many times where nations used their state sponsored companies to dump their product, mainly in the US, to which is in the timeline of our economic decline.
Germany and England in the 70s. They sold steel less than they charged for it at home. This began the rust belt in the US. We lost high paying jobs. This destroyed our unions to which killed labor and this also began our decline in our standard of living. We also have the shills at home and idiots like the Brooking Institute. We now can trace our decline to global trading under the lie of free trade to which the people like Brooking, say yes too. By the way, they never admit that they were wrong. Dear reader, The EU is nothing more than an economic barrier for US exports. NAFTA is nothing more than an exporting machine for Canada and Mexico at our expense and greed. The Trans-Pacific Partnership Trade deal is nothing more than a new fiat layer that will allow foreign nations to lift their standard of living at our expense. Whenever we get into these trade pacts, it is done by lawyers who are shills for fiat currency and greed with no concern for what is best for America. It is always done behind closed doors. Enough said!
Trump is right, but he is giving into pressure. We should tax all imports and suffer with temporary inflation until we can return to a self-efficient country. Then, when the world realizes that they can no longer use us as a dumping ground, we can allow exemptions. However, we should never allow us to be pawns in the hands of global trading who like Jefferson predicted, "our sons will be born into captivity by foreign powers."
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