{"id":33247,"date":"2018-04-09T06:03:43","date_gmt":"2018-04-09T11:03:43","guid":{"rendered":"http:\/\/olduvai.ca\/?p=33247"},"modified":"2018-04-09T06:03:43","modified_gmt":"2018-04-09T11:03:43","slug":"were-trade-wars-inevitable","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=33247","title":{"rendered":"Were Trade Wars Inevitable?"},"content":{"rendered":"

Were Trade Wars Inevitable?<\/a><\/h3>\n

Trade in which mobile capital is the comparative advantage is a system of Neocolonial exploitation of developing-world nations.<\/i><\/p>\n

Were trade wars inevitable? The answer is yes, due to the imbalances and distortions generated by financialization and central bank stimulus.<\/b> Gordon Long and I peel the trade-war onion in a new video program, Were Trade Wars Inevitable?<\/a> (27:48)<\/p>\n

Let’s stipulate right off the bat that trade is not necessarily win-win<\/b>–the winners (corporations, financiers and the financial sector) have skimmed the majority of the gains, leaving the losers with a few pennies of dubious value.<\/p>\n

Consumers’ got a nickel in savings and a disastrous decline in quality, while corporations reaped 95 cents of additional profits:<\/p>\n

<\/p>\n

As I explained in Forget “Free Trade”–It’s All About Capital Flows<\/a><\/b> (March 9, 2018), the comparative advantage<\/i> into today’s global economy is mobile capital<\/i>: i.e. access to low-cost credit in nearly unlimited sums.<\/p>\n

Those with low-cost credit created by central banks issuing reserve currencies in nearly unlimited sums can outbid everyone else for productive assets.<\/p>\n

In effect, trade in which mobile capital is the comparative advantage is a system of Neocolonial exploitation of developing-world nations<\/b> which don’t have reserve currencies they can create out of thin air. Trade is exploitation via cheap credit.<\/b><\/p>\n

The winners are the few at the top of the wealth-power pyramids in both exporting and importing nations.<\/b> I discussed this recently in There is No “Free Trade”–There Is Only the Darwinian Game of Trade<\/a> (March 12, 2018).<\/p>\n

Central bank policies don’t just distort domestic economies, they distort global trade<\/b>, which parallels domestic distributions of winners (a few at the top) and losers (everyone else).<\/p>\n

Trade is intertwined with currencies.<\/b> China has used its currency peg to the USD to avoid being exploited; China has followed a “Goldilocks” strategy that keeps its currency, the yuan\/RMB, in a narrow range: not too costly, not too cheap.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Were Trade Wars Inevitable? Trade in which mobile capital is the comparative advantage is a system of Neocolonial exploitation of developing-world nations. Were trade wars inevitable? The answer is yes, due to the imbalances and distortions generated by financialization and central bank stimulus. Gordon Long and I peel the trade-war onion in a new video […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2973,127,16582,1573,3643,587,805,7040,19291,4311],"class_list":["post-33247","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-bank-stimulus","tag-charles-hugh-smith","tag-comparative-advantage","tag-financialization","tag-neocolonialism","tag-of-two-minds","tag-trade","tag-trade-imbalances","tag-trade-tariffs","tag-trade-wars"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33247","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=33247"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33247\/revisions"}],"predecessor-version":[{"id":33248,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33247\/revisions\/33248"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=33247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=33247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=33247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}