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Trump's Ignorance

Discussion in 'Politics Forum (Local/National/World)' started by Goldhedge, Jan 11, 2017.



  1. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    10/January/2017
    Trump's Ignorance

    Hugo Salinas Price
    The president elect of the US, Mr. Trump, does not know what he is doing when he proposes protectionist measures to encourage the reindustrialization of the US and bring home again, the American industry that emigrated to foreign lands.

    The US lost their industry as a result of the Bretton Woods Agreements, which were signed (under pressure) by representatives of the allied countries and of the countries conquered by the US in World War II. Those Agreements established the world's monetary system for the post-war world, after the victory of the Allies, which was already in sight in 1944.

    The monetary system was to be based on gold, which would be the world's reserve currency, supplemented by the American dollar, which was to be considered "as good as gold". So the world's monetary system was founded upon a lie: that a promise can be as good as the physical thing it promises.

    This lie has accumulated a negative "karma" for the US since the moment it was pronounced, and the financial disaster which will overtake the world in the not distant future is its consequence.

    In 1960, the economist Robert Triffin detected the central problem residing in the Bretton Woods Agreements. I detected the same problem without having any knowledge of "Triffin's Paradox", as it has come to be known. Many years ago, sitting in my office smoking my cigar and contemplating the world's financial situation, I came to the same conclusion as Triffin.

    In a few words, it turns out that in order for the international monetary system established at BrettonWoods to function, the US is forced to run a permanent trade deficit with the rest of the world. Year after year, the US must purchase more from the rest of the world, than what the US sells to the rest of the world, thus creating a permanent flow of dollars to the rest of the world. This flow makes possible the creation of Monetary Reserves in the Central Banks of the rest of the world.

    Without this constant flow of dollars from the US to the International Reserves of the Central Banks of the world, the currencies issued by those Central Banks would cease to exist. If Banco de México, the Mexican Central Bank, does not have dollars in its Reserves, then Mexicans do not have money: without dollar Reserves, the Mexican peso would not be worth peanuts - at least, in international terms.

    In order to obtain dollars, it is necessary to sell to American customers some product at a lower price than that demanded by an American producer. It is self-evident that there is no other form of introducing an export into US territory, than by means of underselling an American competitor.

    This is the reason why a large part of what was once the great American manufacturing industry has disappeared: the overwhelming need of the rest of the world to export to the US, in order to obtain dollars, caused the deindustrialization of the US.

    It is quite unjust to blame the rest of the world for having caused the deindustrialization of the US, and to point an accusing finger at Mexico, for instance, as an enemy of the US because it has been a successful exporter of manufactures to the US. Mexico has simply been operating according to the rules established by the US itself in the Bretton Woods Agreements: the dollar is the world's currency, and at all costs, it is imperative to have dollars in order for Mexico to have a monetary system.

    If Mr. Trump should attempt to eliminate or reduce the US trade deficit and protect and encourage US reindustrialization by means of tariffs on imports, what he would achieve would be to choke the economies of the rest of the world with a scarcity of dollars obtained - how else? - by exports to the US.

    Choking on dollar scarcity, because exports to the US decline or are eliminated, the world will not remain in paralysis. Another alternative to the dollar as the world's currency will be sought, simply because finding an alternative becomes a matter of life or death.

    What can take the place of the dollar? Possibly it will be the SDR - the "Special Drawing Rights" created by the International Monetary Fund - another huge lie that has been nicknamed "paper gold". No one knows how what sort of acceptance will be given to this monetary fantasy.

    On the other hand there is gold, latent but repressed: true money that implies a world of balanced trade where there can be no trade deficits or trade surpluses.

    Mr. Trump does not know it, but applying a policy of protectionism for American industry through tariffs on imports means the death of the world's monetary system based on the dollar.

    Postscript: Dr. Agustin Carstens, Governor of the Bank of Mexico: would it not be convenient to think about the silver coin, given a monetary value by a simple procedure that I suggested years ago?

    http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?offset=140&fiidarticulo=303
     
    mayhem, TRYNEIN, Uncle and 1 other person like this.
  2. Buck

    Buck Fabian Society Gold Chaser

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    In essence:
    What I'm taking away from all of this is the American Taxpayer is put on the hook for the entire global Central Banking System as the Dollar is ultimately "ours"

    The paradox to the main complaint is:
    As American Manufacturing drifted away, the very ability for the American Taxpayer to support any further expansion of this Central Banking System has effectively been de-railed.
    Many Americans, due to lack of jobs, are taking support from the Government which in turn produces nothing, etc...

    That's not Trumps doing

    I say:
    Bring the jobs back home
    It's going to bring some inflation also
    Bring It!
    IT also brings growth, comfort and excess

    If Mexico wants this, build their own society
    If anyone else want this, build your own society

    In the mean time, leave us Americans alone, we're busy fixing things
     
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  3. Son of Gloin

    Son of Gloin Gold Member Gold Chaser Site Supporter ++

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    When that "accumulated negative karma" produced by Bretton Woods brings about that inevitable worldwide financial disaster in the not too distant future, won't it be a good thing for the US to have an industrial infrastructure, so we can actually produce some of the stuff that we need?
     
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  4. OverOver

    OverOver Silver Member Silver Miner Site Supporter

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    "...in order for the international monetary system established at BrettonWoods to function, the US is forced to run a permanent trade deficit
    with the rest of the world." So, what's on the other side of this trade? All the rest of the countries are running trade surpluses with the U.S.
    and their in house finances are okay?

    "Bring the jobs back home" We all want that but I don't see any way possible that the jobs lost to the movement overseas of a nation's
    manufacturing base can ever be regained. Bringing back a car factory doesn't mean bringing back jobs. Not in the day and age of never
    ending technological advances. There will be localized employment improvement for building a factory or re fitting it but after it's up
    and running....well maybe a dozen humans wandering around trying to catch the robots sneaking cigarettes.
     
  5. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    I think he steps over the line here. Trump, I think, is blaming Mexico for illegal immigration more than anything else.

    This was done, even with tariffs (to bring their price up) prior to Nixon starting the exodus of our manufacturing.

    This is one Mexican's opinion, I think Trump knows what Trump is doing !!
     
    Last edited: Jan 12, 2017
  6. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    Mexico isn't doing anything that the US doesn't allow.

    The failure of the US to enforce its own laws isn't Mexico's problem.

    Mexico is merely taking advantage of a market situation.


    The world monetary system has run it's course.

    The economic engine seizes once liquidity dries up.

    QE is a shortsighted attempt to 'fix' the inevitable.

    The engine has an ever-growing leak in the pan. Pouring more oil into the spigot keeps it running.

    Unless you own an oil well, how long can you supply the oil?
     
  7. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    Yes sir !! and there in lies the problem !!! Hopefully, Trump will stop much of it.
     
    southfork likes this.
  8. the_shootist

    the_shootist I self identify as a black '69 Camaro Midas Member Site Supporter ++

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    He pretty much has been saying this all along. He doesn't blame Mexico or any other nation who has taken advantage of the gay Kenyan led US. He would have done the same thing had he been in their shoes. But now there's a guy in charge who can tell when he's getting screwed and knows how to combat it. It helps that we now have him under contract and he now works for us, the American people.

    Can you imagine if Killery was elected?
     
    Last edited: Jan 12, 2017
  9. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    Cuz nafta worked out so well for the US. Cuz the muzzy was a genius that was present for 8 years after holding the all important beer summit. We still don't know much about him........ and that says a LOT.

    I think a lot of these articles are being written by people that know that they produce nothing useful but waste & are unneeded in the real world. But it's how they get paid.
     
  10. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    The Mexican situation has developed over decades. It is basically a safety valve and GDP enhancer for the White European Mexican Elite. So many Mexicans are in the states that now we are being flooded with Central Americans as there is a shortage of Mexicans.

    Amazing, I have watched this develop all my life, and I am past sixty.
     
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  11. mayhem

    mayhem A Different Perspective Silver Miner Site Supporter

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    While I don't agree with the OP headline, I do agree with what was said within the article.
    Bretton Woods was 'just put on a band-aid, and a kick the can down the road' move. As Buck said "inflation will show up", well it already has, and has been hidden or dumped overseas for now. Trump's policy's will expose that hidden inflation quickly, and the pain will be sharp, but it must be done if we are to survive. History says that these band-aid policy's always lead to war, always. Humans resort to violence when all hope appears gone.
    Sadly, the greed of a few not the many are what brings these can kicking policy's to bear, not the everyday worker. The everyday worker has spoken, and truthfully Trump appears to be the only person out there who can fix this with as little pain as possible. Big job, can't think of another, the man for the time has come. Just prep as best as you can, and remember no man is a Island, we will need to go through this together, not alone. So finalize your circle of friends around you. Now!
     
  12. Son of Gloin

    Son of Gloin Gold Member Gold Chaser Site Supporter ++

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    Great post!
     
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  13. the_shootist

    the_shootist I self identify as a black '69 Camaro Midas Member Site Supporter ++

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    Excellent post. I've been going with the very same mindset that you've described for a number of years now. I look forward to the 'reset' and feel I'm well prepared for it...I guess we'll soon see
     
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