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March 3, 2018 | Trade Deficits – Trump’s Instincts Valid!

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: http://kingdomecon.wordpress.com.

Many are criticizing the Donald for imposing tariffs on some commodities. But does the Donald have a valid argument for his thinking? Personally, I think so! Mr. Trump recognizes the following facts with respect of our current trade deficits (goods):

  1. the deficit with China is $379 Billion +-
  2. the deficit with Mexico is $71 Billion +-
  3. the deficit with Japan is $69 Billion +-
  4. the deficit with Germany is $65 Billion +-
  5. the deficit with Canada is $17 Billion +-

Our overall trade deficits are currently around $800 billion (annually) and growing. These are momentous records. America has had these trade deficits since 1975 (continually). It is unlikely to change. It can not change without a serious economic depression and collapse. Why is this happening?

 

Basically, America is allowed to import more than they export as the American dollar is the reserve currency for the planet (some 65% of trade imbalances are settled with dollars). Everyone needs our dollar for balance of payments settlements as this is the game being played (since 1971). The game was set up after WWII via the Bretton Woods Agreement. And nearly everyone needs the American dollar for purchases internationally when their own currency is unacceptable to their counter-party.

 

America, however, is exempt from any real financial discipline due to our banking/payments advantages and currency advantages.  All this has evolved mostly since 1975. This means that we can borrow and spend with no real limitations or discipline. As consumers we spend and spend and then the government spends and spends (continually). Americans can borrow and borrow to make up all the DEFICITS which we incur via our spending behavior. Our total debt is now some $69 trillion (when all government and consumer debt is added). See it here: http://www.usdebtclock.org.

 

Mr. Trump, and his advisers, think that this game of spend and borrow must change. Unfortunately, they seem unable to change the core behavior which has evolved. What has happened since 1975 is that the problem has grown to unsustainable levels and to levels where the problem can not be solved (with math or Keynesian gimmickry). The game of international finance is now out-of-control and with fake/digital money (which we create via merely punching of computer buttons) this game will not change. The problem is systemic, corrupt, and beyond human solubility.

 

All the Trump financial policies to date will make our problems MUCH more dire (in time). His instincts are valid as he desires to change this systemic trade deficit problem with new trade policies. But any major change in this game of trade will produce a serious economic recession and then a depression. The game has evolved to a state where it has become systemic and beyond policymaker solution. Just look at the numbers for evidence: http://www.usdebtclock.org. Notice the trend since the 80’s and after!

 

Our problems today are now unsolvable with current tools of finance. We need to wipe the slate clean and start over. This means we need a NEW MODEL for the planet after the next great financial holocaust (soon coming). We need a MODEL which recognizes that DEBT must be eliminated from all trade and commerce. We need a MODEL which eliminates all fake money units and money gimmickry. We need a MODEL which puts people FIRST…not governments, corporations, politicians, and elites first.

 

Our problems are now UNSOLVABLE by any political or financial means. This is the mindset that we all need to reach so that we can think creatively about a NEW MODEL which will work for the entire planet. The DEBT model which we currently live with is destined to collapse totally. It’s based on pure metaphysical gimmickry. All the QE and central planning being done by our Central Banks will not change the real NATURE of this problem. The problem is SYSTEMIC and beyond solubility (as is)!

 

To understand this issue it may be necessary for the reader to do some historical research on the nature of money, the nature of value, the nature of debt, and the nature of human nature. All these factors play into these issues which we now face. Mr. Trump is doing the best he can but his efforts can not work long-term as the PROBLEM is beyond any solution. Math can not solve this problem. Trade gimmicks can not solve this problem. The problem is beyond any human solution if the current economic MODEL is continued. Our future is dire given our past lack of discipline and our lack of understanding of how human nature works!

 

Keynesian math can not solve our current trade problems, debt problems, government spending problems, or consumer spending problems. We live with an evolved Keynesian math/debt MODEL (globally) which has run its course (fully). We need a NEW MODEL for a new growing digital AGE. Our planet is now wired for global communication and exchange. Technology has changed all relationships going forward. We now need to recognize our situation and CHANGE the MODEL. Getting informed is essential as a first step! Think for yourself on this and all other issues, however! I am: https://kingdomecon.wordpress.com.

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March 3rd, 2018

Posted In: Kingdom Economics

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