Spreading the wealth (around the world)
The redistribution of wealth is here. No, I'm not talking about "spreading the wealth" here in America. I'm talking about the global redistribution of wealth from the developed world to the developing world. It is significant and it is directly impacting our quality of life in America... and it will continue to have a deleterious impact on our quality of life for years to come.
We all know about the jobs that have moved from America (and the developed world) to China (and the developing world). This happened over the past couple decades. And more recently we've witnessed the outsourcing of white collar jobs, including highly trained radiologists. But the outsourcing of jobs was, IMO, the tip of the iceberg.
Now on the heels of the bailout comes the bigger whammy. Our central planners central bankers (Bernanke & Geithner) are selling America's gold. And again, the transfer is reputedly to China and the rest of the developing world. It seems to me that this sale of gold is a direct attempt to lower the price of gold by flooding the market.
But what does this mean?
In a few years time, America is going to look back and see two significant happenings:
1) the printing presses ran 24/7, inflating the money supply and devaluing the US dollar; and
2) our gold supply will be greatly diminished
At that point, people around the world will have lost a great deal of confidence in the US dollar and they will look for alternatives to use for trade. Keep in mind, there's little backing the dollar, except the "good faith and credit" of the United States. And if people's confidence in the dollar is diminished, then they'll demand more dollars for fewer goods. And we'll then be able to really see the impact of the ongoing global redistribution of wealth from the developed world to the developing world.
FWIW, the solution I offer is a return to sound money - something backed by gold, silver or anything that cannot simply be printed when our elected officials want to increase spending, but avoid risking the wrath of the voters with a commensurate tax hike.
Tim White
3 comments:
I don't think selling gold is the real problem.
The real problem has been greedy CEO's who have given away America's jobs and technology. For our currency to have value, it has to be backed by the production of goods that the rest of the world wants.
When you buy a product that is not made in this country, you are weakening the dollar and sending jobs out of the country.
We can thank the Walmarts, Targets and all of the other big box stores for killing our economy. You see product made with cheap foreign labor that sell for the same prices as if they were produced with U.S labor. Where does all that profit go?
Forget the Gold Standard and work to return manufacturing to the U.S. It all starts with us, the buyers.
"You see product made with cheap foreign labor that sell for the same prices as if they were produced with U.S labor."
Perhaps you haven't noticed what happened to a manufacturing industry that tried selling stuff made by workers paid unionized US wages...How's GM doin these days?
I'm sure if the Chinese manufactured GM's cars the price would be dramatically less. Now , the quality might suffer, but, right now GM is hanging by a thread anyway
"right now GM is hanging by a thread anyway"
Yes, GM's labor costs are higher than they should be, but you just can't blame the workers and management for everything. Nobody talks about the high costs related to government mandates, worker safety, clean air and water, social security and on and on. In addition are the high costs of taxes that pay for bloated federal, state and local governments. Compare the salaries and benefits of government workers to that of the private sector and I'm sure you will find that these people are ahead of the curve. Government workers are the most unionized group in the country. Why should government workers work 35 hours instead of 40 like the private sector?
What is the actual hourly rate of teachers who actually work less than 180 days a year.
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