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February 11, 2017 | Germany’s Trade Surplus – Draghi is the Problem!

Donald B. Swenson: Born January 24, 1943, Roseau, Minnesota. Graduated H.S. 1961, Moorhead High, Minnesota. Graduated College 1968, Moorhead State University, Minnesota. Designated member of Appraisal Institute (MAI), 1974. Employed with Western Life Insurance Company, 1968 – 71; Iowa Securities Company, 1971 – 73; American Appraisal Company, 1974 – 81. Part-time teacher/valuation consultant/bartender, 1979 – 2008 (taught workshops at Waukesha County Technical Institute, Wi. and Madison Area Technical College, Wi.). Retired 2008 (part time teacher/blogger), AZ. Self educated economist/philosopher/theologian:

Image result for Draghi and Merkel meet to discuss trade

Today’s WSJ had two articles worth thinking about. See page A8, Friday, February 10, ‘Europe Central Bank Gets Political’ and ‘Record German Trade Gap Risks Riling U.S.’. These two articles reveal that the German trade surplus of $270 billion (2016) marks the highest German surplus since records began after World War II. Think about this situation! So what is causing this sharp increase in Germany’s trade situation (goods). Is it fair trade or manipulated/distorted trade? I think I know!

The problem is not free market demand and supply (based on a level playing field) but a manipulated Euro currency rate. Peter Navarro, head of Trump’s National Trade Council, says that German exporters had an unfair advantage due to the Euro exchange rate relative to the $ rate. Does Peter have a valid point? I think so. What Mr. Draghi has been promoting at the ECB (Europe’s Central Bank) is excessive QE (a $2.5 trillion bond-purchase program) which totally distorts the Euro exchange rate relative to the American $ rate. This manipulation of a currency’s ‘value’ is the core problem with all trade relationships today!

Today, we live with cyber currencies which get created ‘out-of-nothing’ by mere thinking within the halls of our Central banks. Draghi has copied our prior Fed chairman, Ben Bernanke, with his excessive currency manipulations via his QE (quantitative easing) policies. This QE (quantitative easing) policy lowers the exchange rate of the Euro relative to other hard currencies and this allows Germany to experience an unfair advantage with their exports. The American $ has been excessively high relative to the Euro and this has continued since 2015.

If fair trade is ever to emerge on the world stage we need to get to the CAUSE of the problem. The cause of all this unfairness within the international trade arena is our imaginary cyber (electronic) currencies and their lack of any independent ‘value’ (as a standard of value for trade). Think about what we now use for trading between nations. These cyber currencies (mere numbers within the computer screen) are units of ‘nothing’ which get created directly from the mind of select Central bankers. How can a subjective currency unit solve any of our trade imbalances?

When nations trade between themselves, they need confidence in the trading UNIT. This unit must be ‘tied’ to some ‘thing’ of substance which people can recognize as having some ‘value’. Does a mere unit of consciousness (Draghi’s Euro currency) have substance or ‘value’? I don’t think so! This unit is a ‘mental abstraction’ which resides with his mental structure (his consciousness). His $2.5 trillion (that’s TRILLION) of QE totally distorts the Euro exchange rate and gives Germany (the strongest nation using the Euro) a huge advantage (assuming the $ is not also distorted with a similar corrupt policy).

The American Fed (our Central bank) stopped their QE policy in 2015 and this has allowed our $ exchange rate to exceed its relative relationship with the Euro exchange rate…allowing a country like Germany to favor its exporters. If we desire to create a fair playing field then we need to get to the CAUSE of the trading problem (it’s our Central bankers and their continuing manipulations and distortions of exchange rates). We need a trading unit that is ‘tied’ to some substance (outside the human mind/consciousness) which is perceived to have ‘value’. Wake-up and think about the CAUSE of all these trade problems!

Judy Shelton has written a book on all this which everyone should read to gain understanding on these issues. The book is called ‘Money Meltdown’ restoring order to the global currency system. Her analysis reveals that a currency system needs some anchor to physical reality (say gold/silver) to have viability when trading between nations. Peter Navarro and Donald Trump need to read this book and hire Judy as a consultant for their understanding. Mario Draghi needs to wake-up to all his personal policy corruptions! Enjoy! I am:

Additional information for this missive:

Image result for Draghi and Merkel meet to discuss trade

These policy makers need to LOOK in the mirror if they desire to understand trade relationships!


Mario Draghi is the problem as he lacks understanding on the consequences of his excessive QE policies. Where does he get his cyber money from? Think on this!

Image result for euro exchange rate relative to the dollar

Mario Draghi has driven down the Euro/$ rate to 1.0627 as of today. Much of this has been the result of his excessive QE policies IMO. Floating/cyber exchange rates can not create a level playing field for international trade. Some ‘fixed’ standard to a commodity (like gold/silver) is required. 

Image result for money meltdown, judy shelton,

Read the above book for understanding of the CAUSES of our trading problems!

Image result for QE and money from a central bankers computer

Mario needs to LOOK in the mirror prior to talking about Germany’s trade imbalances! His policies are a major part of why Germany has this excessive trade surplus!

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February 11th, 2017

Posted In: Kingdom Economics

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