Sunday, September 19, 2010

Economic Collapse

Americans have loved rushing out to Wal-Mart to get super low prices on all kinds of stuff, but in the process we have slowly but surely been shipping our manufacturing base and our standard of living over to China....

Last month, the monthly trade deficit with China was approximately 26 billion dollars.  For the year, the trade deficit with China will be somewhere in the neighborhood of 300 billion dollars or so.  The transfer of wealth to China that represents is absolutely mind blowing....

Virtually all major exporting nations want the value of the U.S. dollar to remain high so that they can keep flooding us with lots of cheap goods.  The sad reality is that our current system of globalized trade rewards exporting nations that have weak currencies....




All of the above is accepted as true by most Americans. Common knowledge, a real yawner of an article. But I have a couple of questions.

If a person decides that a Wal-Mart purchase is more valuable than the Federal Reserve Notes he parted with, then obviously that person is "richer". So how can we be "shipping our standard of living" to China? Discuss.

What is this thing called a "trade deficit"? If America gets real goods in exchange for some scrip, I'd say that's a prudent swap. If you say that the majority of Americans can't be trusted to make wise decisions in purchases, then what does that say about the wisdom of democratic elections? Discuss immediately!

Common knowledge says that the lower the value of a country's currency, the higher their exports, i.e., their goods look like a bargain to other countries. Since the dollar is in the shitter, why aren't we exporting like crazy? If other countries are "flooding us" with goods, that means that Americans have lots of spending cash. An obvious contradiction. Discuss.

                   

3 comments:

  1. Uh oh. You're setting off independent thought alarms all over the country.

    ReplyDelete
  2. Hi Brass,

    I sure hope so, although anyone with a nose should be able to give these "truisms" the sniff test.

    Dave

    ReplyDelete
  3. Hi,
    Nice info!!
    I am Swathi Pradeep.
    Pls check my comics blog:
    http://swathipradeep-comics.blogspot.com/2010/09/cwg-part-2.html

    ReplyDelete

All comments are welcome.