Friday, August 19, 2011

The dark side of Globalization...

Hey I am all for globalization, how else can I get all that stuff that I don't need from Walmart for such a low cost.

But a dark side of so-called globalization is that countries that actually try to make and produce stuff are forced to trash their currencies and make them dirt cheap... Obama's dream is to print trillions of dollars and make our once proud dollar so worthless that even the Chinese's will find that it's cheaper to make stuff here. Except the Chinese tie their currency to ours. Well that was exactly how it worked with Japan... With the yen now at its strongest that it has ever been, it cheaper for Japanese to make their cars and electronic toys here... The problem arises when all countries want to devalue their currencies... Vietnam pushed their currency so low that even the Chinese are forced to make stuff there, but with worthless currencies comes high debt and high inflation...

The dollar would have collapsed even further if it was not for the fact that the Euro is collapsing too... So what is a poor currency trader to do. Well buy Swiss francs or gold... Now one of the strongest currencies in the world... sounds great for the Swiss... except for the fact they rely on foreign companies to retain their headquarters there... Now the cost of living in Switzerland is so expensive many foreign nationals and their companies are moving back to their own country resulting in higher unemployment and lower tax revenues for the Swiss... So even the Swiss are thinking about how to make their currency cheaper...

So all one can hope for that this rush to print money and trash the value of currencies is that we do not become Germany before WWII... I for one don't feel pushing a wheel-barrel of money to pay for a loaf of bread... And from what I recall the Germans didn't either and elected that man with the funny mustache.

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