Thursday, November 9, 2017

Trump is hysterical to watch in all of his economic ignorance.

Trump says things that swing wildly from day to day and even hour to hour.  This is not opinion it is fact.  Never has there been a president who has backtracked so many times.  This is different than lying.  Obama and Bush and Clinton were just look you straight in the eye liars.  Bold faced liars all.  That is different than Trump. Trump sees that something is going on but has no idea of the underlying economics.  Let me give you a great example. ABC News reports today on Trump's comments coming out of China.  In the past Trump declared China to be currency manipulators, economic terrorists, etc.  But now he is saying that we should not blame China and that America is to fault.  It hardly gets more wishy washy than this when it comes to flip flopping between extreme behaviors.

So let's just calm down and understand what is really going on. 

The world runs on fake money called fiat currency and fractional reserve banking.  It is literally a confidence game started in the early 1900s with the creation of the Federal Reserve and the associated New World Order where the US would effectively enslave the rest of the planet.  What was different about this iteration of slavery is that the slaves had to agree to it!  So it was not slavery that was strictly enforced at gun point (even though a breakdown of the system is likely to lead to WW3) but it was slavery nonetheless.

What happened is that in 1945 the US conned the rest of the world into using the dollar as the global reserve currency.  In other words, the dollar became world money for all intents and purposes.  That meant that most business was transacted in dollars and that meant people outside the USA had to hold dollars.  While they were doing this, the US government was working with the federal reserve bank to inflate the currency (i.e. water it down) with a target of 2% annually.  In this way the USA could tax the rest of world's commerce at 2% without doing a damned thing to earn it.  Why would people pay this?  In many cases it was because of global economic growth fueled by expanding global debt.  So the 2% tax was a small price to pay to be part of the debt Ponzi.  In other cases people simply didn't know what was really going on.

When Nixon approached China in 1972 he had just de-linked the dollar from gold and it threatened to make the dollar irrelevant on the global stage.  This is why Nixon decided to trade with China.  It would give the dollar new life.  China had this huge but backwards workforce and the US had lots of tech to share.  The deal was that the US would share tech if China would do the work of manufacturing stuff.  China had so many people that the law of supply and demand required them to work in this new industry for low rates. 

So Trump wonders why jobs left for China.  The answer is simple: slaves work for less money than non slaves.  But Trump is too economically unaware to realize that this is not a bad thing.  If someone comes to me and says they want to maintain my house doing all the dirty heavy dangerous grunt labor thus leaving me free to either have leisure time or to go do better work that pays more, should I be angry that the slave is relieving me of work??  OF COURSE NOT!  Only a damned fool would complain about someone taking care of their needs at very low cost.  Does it mean I need to go do something more value added than cutting the lawn and trimming the hedges?  Sure.  But how hard is that?  Not very.  So this whole idea that China is ripping us off is ridiculous.

The truth is that China and others in the world work hard to produce goods which they send to us in physical containers.  In return we send them paper dollars which are promises to ship physical goods back to them some time in the future.  But that is never going to happen because we don't have the manufacturing capability to do it.  What will happen is that we will default either outright or by massive inflation and then the world will lose confidence in the US as the world leader.  China will rightfully get its turn at the helm.

Why rightfully?  Doesn't intrinsic American Exceptionalism mean that we automatically have G-D given rights to rule the planet forever?  Well, no.  The global herd will follow whoever provides more recognized value and right now the US provides precious little value relative to our consumption.  That number is quantifiable; it's called a trade deficit.

China has done and continues to do good for the world by providing us a high quality of life at a low cost.  That is what life is about, not stupid political ideologies which are never anything more than marketing stories to keep this con man or that in power.  At the end of the day humans are on this planet to consume, produce, grow, learn, enjoy, etc.  These are the important elements of humanity.  If someone can consume a lot that is produced by someone else without having to reciprocate then, while unsustainable since nobody is going to be our slave forever, it is certainly a very good time to live.  It's like being royalty and having willing subjects.  The last thing we should be doing is insulting or accusing them.  We will learn this the hard way once they stop accepting our fake green currency in return for their real goods that were produced by real labor.

No comments:

Twitter Delicious Facebook Digg Stumbleupon Favorites More