Posted by
rycK on Monday, December 22, 2008 4:38:00 PM
Protectionism: The World Economies
Circle Their Wagons
There is a must read article by Ambrose Evans-Pritchard
“Greece has been in turmoil for 11
days. The mood seems to have turned "pre-insurrectionary" in parts of
Athens - to borrow from the Marxist handbook.
This is a foretaste of what the world may face as the "crisis of capitalism" - another Marxist phase making a comeback - starts to turn two hundred million
lives upside down.”-- Protectionist dominoes are
beginning to tumble across the world The
riots have begun. Civil protest is breaking out in cities across Russia, China, and beyond. By Ambrose
Evans-Pritchard 22 Dec 2008 [Emphasis is mine in all quotes.]
This article
shows how various governments are handling the deflationary forces that have
gripped the world. What China is now doing is something like our Smoot-Hawley
Tariff Act of 1930.What that act did was to truncate America’s exports, especially agriculture,
and cause a 30% contraction in our GDP. England only contracted 5% we learn from the
article by Ambrose
Evans-Pritchard because it seems the British Empire held up their own barriers. We will probably have to do that. Asia will form their own sphere of economic influence.
“Britain and the Dominions retreated into Imperial Preference. Other
countries joined. This became the "growth bloc" of the 1930s, free
from the deflation constraints of the Gold Standard. High tariffs stopped the
stimulus leaking out.”
China and parts of Asia are starting off the trade
wars with their indirect tariff systems with various rules and licenses.
What I expect to see here is falling exports from the US and some bargaining with Canada and Mexico to form our own Economic Fortress America. That will not be easy. There will
be strong forces ahead that will tend to beg
the government to nationalize businesses and ruin the rest of our
economy. We have Freddie Mae to thank for our 5 trillion dollar debt and
another 4.3 trillion in bailouts.
Then, we have a pack of
socialist parasites in Congress and in the White House.
Hard times ahead.
rycK
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