Blowing It Scenario #43-Trade Wars Are Here, Brace Yourself.

President Trump Wants To Raise Tariffs On Imported Steel And Aluminium.

This could very well set off a trade war with the rest of the world. I really don’t know how to feel about this. Both sides have a great argument. If we truly are losing billions in trade then it does make good business sense to cease these trades. On the other hand I imagine it can severely raise cost, not only to consumers but to all countries benefiting from trade with the U.S. Which in turn would create more reason for those other countries to retaliate and raise tariffs on U.S. products.

War is never a good word, it doesn’t matter what you are referencing. That is unless you are discussing the card game but even then, that game usually involves infighting and ends with someone holding all the cards. We have seen it countless times throughout history. Cold wars like trade wars or currency wars or nuclear armament, can often end in hot wars. In 1930’s Germany they began to institute protectionism as aspects of free market capitalism were viewed as failures to a nations sovereignty. They instituted public-works programs like autobahns, protected industry from foreign competition, expanded credit, instituted jobs programs, bullied the private sector on prices and production decisions, vastly expanded the military, enforced capital controls, instituted family planning, penalized smoking, brought about national healthcare and unemployment insurance, imposed education standards, and eventually ran huge deficits (mises.org). Which all seem great, and were to a country rebuilding a nation. However it most likely was the issuing of government backed credit that was their first major mistake and the beginning of their downfall. Their we’re much more horrific mistakes in the proceeding years. That is a whole other colossal failure topic. However for this article we’re discussing money and trade and when it comes to finances, the debt collector will as come calling.

Every war in history has been a battle over money you can spin it anyway but it all comes back to finance. It can be over land but that land usually has something of financial value. Or the land is strategically placed near a port or central to operations to obtain near by lands and their prosperity. Most people think the civil war was fought over slavery. This is simply not true, it was a financial war. Lincoln was issuing greenbacks throughout the nation (money back by the government) without any foreign interest. Which is a very protectionist stance against money lenders. However the war itself was over trade tariffs. Which put the country into insurmountable debt that the green backs had to be abandoned. Boston Tea Party, taxes. Hilter’s credit expansion. Napoleon Bonaparte and the french revolution again, began over taxation. Protectionism was instated to prevent further financial decay. Later introduced a government ran bank with new currency and ended in exile and death. The moneyed interest will always come for the pie. So although protectionism seems good for a country’s people and their sovereignty. Some entity, be it a country or a financial institute, with a lot more, will come for their share and usually win it. Often times at great loss. As long as the U.S. doesn’t try to issue their own money outside of central bank control. We should steer clear of a hot war. Good luck Venezuela with you government cryptocurrency. Those who introduce their own currency don’t usually fare well throughout history.



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