Celcius

Obama Faces Decision Time on Trade

"A study by a Rutgers University economist suggests that higher tire prices due to tariffs could cost US consumers $600 million to $700 million a year, lower national income by between $250 million and $300 million a year, and cost 25,000 American jobs in sales, marketing, and distribution. Even if they worked, tariffs would cost $300,000 per manufacturing job protected, and destroy 12 times as many jobs as they save."

What about the economic value of the US tire manufacturers salaries? The income tax revenue, the money multiplier of their bank deposits, the income spent within their local economies, the velocity of the money within their local economy, and the tax multiplier as the money is spent within the local economy. The fuel savings to ship the tires locally vs. across the pacific. What is the environmental cost to global warming of the additional CO2 produced from the Chinese tire factory? What is the cost of the Chinese pollution: air, water, and soil to the global economy? Are the Chinese using prison labor to produce the tires? What is the local market purchasing power of the Chinese Yuan vs. the US dollar? And, if the Yuan is kept artificially low, then the sales of the Chinese made tires on the US market is actually dumping, since they are being sold artificially below their real market value in the US. What are the US health care costs due to the Chinese pollution created? What is US insurance cost of the global warming due to more extreme weather patterns? I can go on...

The sad thing is that when most financial comparisons are done only the labor costs are examined and compared. There are significant financial losses to the local economy from imports. Especially, when they are not in balance with exports. What we need is a rising tariff on all imports by country until imports and exports are in balance. Currency value manipulation has prevented free trade with our trade partners for decades, and what we need is fair trade: where both countries can prosper and build wealth.

China Wants to Ditch the Dollar

Reserve Currency 1800's - Pound Sterling
Reserve Currency 1900's - US Dollar
Reserve Currency 2000's - ???????

This meltdown illustrates the need for a stable, difficult to inflate currency. Why not a supra national currency based on Gold and Silver vs. a bucket of national currencies... Bretton Wood's 2.0