I’m trying to understand trade imbalance in a way that’s meaningful to me.
Let’s begin with an article that Thomas Sowell wrote many years ago in which he pointed out the meaninglessness of a trade imbalance.
In his article he pointed out that he had a net trade imbalance with his grocery store. For decades he had been buying goods from the supermarket, and yet the supermarket had never once bought any goods from him.
His point was: Trade imbalance? So what?
I’m not sure about that, but it’s a good starting point. Let’s run with this.
Let’s create a hypothetical country call the United States being run by King Louis.
During the reign of King Louis of France, that fat fuck didn’t do a damn thing except eat grapes, drink wine, fuck women and figure out ways to loot other countries.
The people in his country made everything for him. He didn’t do anything himself. He rewarded them with shit wages, dimes.
In essence he carried on a trade imbalance with his people.
He got away with it through force.
In many respects, this is what the United States and our King Louises do today. We sit back like a fat fuck, watch Hollywood movies, drink wine, go to nice restaurants, fuck, and figure out ways to fight wars while other people do all the heavy lifting for us.
We then pay many of these exploited countries shit wages.
We get away with it through force.
When King Louis of France needed extra money he would tax the citizens but that would make life worse for them. They would get angry. So he would go to war or colonize in order to take things from other people.
When the King Louises of the United States need extra money they do pretty much the same thing. But they also print up notes, do some accounting tricks, then use other countries as borrowers. It’s an IOU of sorts, a promise to pay.
But of course, we don’t plan on paying any of that money back. It never gets paid.
It never gets paid because we are King Louis. We are the biggest motherfucker around.
It’s like Sean Penn stated in the movie Casualties of War: Yea though I walk through the valley of the shadow of death, I will fear no evil because I’m the biggest motherfucker in the valley.
This is how the United States operates today.
This is how Louis of France operated.
And what happened to King Louis XVI?
In time the people get wise and say: “We’ve had enough. We are doing all the heavy lifting, and you’re sitting back doing all the fucking.”
That’s the danger of a trade imbalance.
That is our future.
A trade imbalance in time favors the people providing the raw goods.
In 1850s China, the Chinese were providing more raw goods to Great Britain then Great Britain was to China. As a consequence, British sterling was flowing out of the country. To combat that, the British decided to import opium into China. When the Chinese objected because their people were getting addicted to opium, the British insisted that the Chinese purchase opium, and the results where were the opium wars. There were two of them.
This is how the west generally corrects a trade imbalance.
Now, the analogy that Thomas Sowell used with his supermarket is a little unfair. There are of course other factors that go into the equation, but if we lived in a world where there were no external factors except you and the supermarket, in time you would run out of money. If you tried to print up money, your supermarket might cut you off. Now, of course, you could run up a debt to your supermarket, give them an IOU; but in time the note would come due. At that point, if you didn’t have money, which you won’t, you can again either print up money or not not pay.
At that point, you’ll be cut off at which point you can either starve or resolve to go to war and simply steal the food from the supermarket.
Those are the poor choices before the King Louis who now runs the United States of America.
The alternative is not palatable to our elites, our King Louises.
The alternative is to return the United States to a country that actually makes things, that restores the trade imbalance.
Our King Louises reject that option because it cuts into their money.
And they are too stupid to see that it will kill them in the end.
Copyright 2021 Archer Crosley All Rights Reserved