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Navarro: Biggest Threat is China’s Price Distortions within our Trading System!

April 16, 2018

The article in the Wall Street Journal today entitled “China’s Faux Comparative Advantage” by Peter Navarro was enlightening. China now produces more than 50% of all refrigerators,  60% of all televisions, 80% of all computers and air conditioners (according to Navarro). China has increased their exports (mostly since 2001) at the expense of America and other Western nations. China has developed the ability to create subsidies for its entrepreneurs, buy American start-up companies with Central bank money, and manipulate trading markets to their advantage. They have also manipulated intellectual property laws to favor their public/private companies.


China then manipulates their digital currency, the Yuan,  and implements various tariffs and special barriers to another countries products to maintain their control over the trading markets. All this corruption is what Mr. Navarro and Mr. Trump think must change going forward. But what are these thinkers missing in their analysis? My sense is that they are missing the real corruption which starts with our monetary units. Our monetary units are now mostly digital/fake and Central Banks create these units behind closed doors artificially. All this money corruption causes price distortions and trading distortions everywhere.


The real problem today in our trading markets is our digital/fake currencies. Navarro’s faux comparative advantage thinking is partially flawed as the real issues are these trading currencies which get created artificially (out-of-nothing) and then distort all our prices and the various stock market exchanges which supposedly reflect what is happening. His article does reveal the many distortions which have occurred these past 40+ years since the closing of the gold window in 1971. America’s trade deficits have been continual since 1975 and its all a result of money units which have no tie to material reality. The problem is systemic and persistent.


How can money transactions be reflective of trading reality when the money units get multiplied by select Central Committee’s operating behind closed doors? Our entire trading system is based on money units which have no stability and no tie to material reality. Price distortions result from these fake money units. Currency manipulation results from these fake money units. Trading gimmickry and various trading barriers develop as a result of all these global fake currencies. Navarro and Trump need to think about a global RESET of all these fake currencies. Nothing will change until the core issues are addressed.


Navarro is correct in his desire to change our trading markets…especially with China. But his analysis does not get to the ‘root’ of the problems. We need to review monetary history to ascertain why these problems have developed. The problems started in 1975 and after. What happened? America dropped the dollar’s tie to gold and then created these fake international currencies. With no ‘tie’ to anything material, our currencies are now mere ‘mental abstractions’. Mental abstractions are subjective/inner. They can not work long-term. We need a RESET of the entire global trading system. Think for yourself! I am:

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