Guest article from Samseau explains the intricacies of free trade and why it cannot co-exist alongside monetary manipulation.
Written by Samseau
Third-world countries such as China, India, etc, have a set of laws in place to keep their population enslaved while they work to produce crap for First-world countries. China, for example, has a currency peg set at roughly 6:1. So no matter how much a Chinese worker saves, his dollars of value are always worth six less than American dollars. So if America prints 3 trillion dollars, that means his base currency supply has also necessarily devalued by 18 trillion.
This creates a powerful incentive for First-world companies to setup shop in third-world slave countries since labor costs are practically non-existent. First-worlders enjoy the slavery by sending their dollars to the third-world for these slave goods, but because money is not spent in the First-world, the money isn’t circulated back into First-world economies which then slowly go bankrupt.
What First-world governments have chosen to do is print more cash as they run out of it. To do this, they loan bonds to specially chosen banks with extremely low interest rates. The banks as a result have effectively unlimited money. The banks then selectively loan out the cash to whatever special interests and projects they want. The money is slowly circulated out to the workers who are tied to the financial industry: government workers, Wall st. hedge funds, banker lawyers, certain real estate companies (very few compared to pre-2008 in America), tech companies, and other industries with “proven” returns. These First-world companies then pay salaries to First-world workers, who are all classified as working in the “service” industry. These First-World workers then spend their money on cheap goods produced in third-world slave countries, who have currencies pegged at a value vastly below what it would be if the currency were allowed to be floated.
At the bottom of the economic totem pole are Third-worlder’s savings which are constantly devalued and rendered into shit, which means they must continue working to pay for a cost of living they can never keep up with.
The end game is that the Chinese man works until he dies because he will never accumulate savings, and most First-world citizens go without real work until he dies because his country men have few high-paying jobs and cannot accumulate capital to start new businesses. The only ones who make it are those who win approval from the ever selective financial “industry,” which is nothing more than slave-racketeering.
The only reason this state of affairs occurs is because of collusion between both First-world and Third-world elites; First-world elites know they can use Third-world slave labor to sell dirt cheap goods in First-world markets and hog all the cash and profits for themselves (which is why the income disparity has gotten so bad in First-world countries), while Third-world elites secretly use the immediate profits they gain to buy First-world goods and convert to First-world dollars yet simultaneously paying Third-world citizens with pegged trash money and placing capital controls on the average Third-world citizen so they cannot escape their fate.
For example, in China it is illegal to take money out of the country. This is why bitcoin and gold are so popular in China, because it is a way for the average Chinaman to escape the capital controls and brutal currency peg. By changing his Chinese dollars into bitcoins he can avoid the steady devaluation of his money. This is also the reason why the Chinese elites buy up tons of American property in major cities, because these places are priced in American dollars which are worth 6 times as much as Chinese dollars, via the peg.
Other countries, such as Mexico, do not use capital controls but instead have “parallel economies” where citizens trade with one another in their trash pegged currencies, and have a much more valuable trade involving US dollar hoarding that they can get via remittances from illegal or legal labor sent into the US.
The ultimate situation today is not much different than the old slavery system of the American south. You had the working black slaves (Third-worlders), high unemployment among free Whites (First-worlders), and the rich plantation owners (corporate shareholders). Since slaves are forced to work below a market wage, just like the third-worlders are via their peg, there is no chance for the free men to compete with their labor on an open market because free men would never work for the pitiful wages given to the slaves so they remained unemployed. Meanwhile, the plantation owners grew richer and richer.
Libertarian and classical economists got it wrong on free trade. They did not consider how international markets could be manipulated to turn groups of people into slaves for the sole benefit of an elite few. I don’t know many libertarians who support slavery, so usually when I point out the above analysis they quickly change their opinion on how free trade is supposed to operate.
Trump has a very sensible plan regarding free trade. His official policy paper states that total free trade will not occur unless the country America does trade with also applies the same labor laws and currency standards that we do, and lets their currency float. There will be less enslavement of third-worlders in the name of global profits under the Trump administration. Countries, such as China, who refuse to comply will be met with huge tariffs that will force American companies to think long and hard before they start opening up sweatshops in these countries.
Third-world countries can still respond to tariffs by further devaluing their currency to keep labor costs low, however. It remains to be seen if tariffs will just make third-world countries beat down their workers even harder with further poverty and even worse slave conditions, or if the slaves revolt, or if they finally let their currencies float. In any of these circumstances, it will be good for First-world countries like America.
THIS ARTICLE ORIGINALLY APPEARED HERE.