The very word “Exchange,” indicates a trade, barter, purchase, or the like. Be it a night on the town with a damsel, for physical considerations, or currency exchange for the same thing, it is the oldest profession, and certainly involves exchange of one item for another. Purchasing a meal at a restaurant, a car at a dealership, or a home using a realtor, it is all an exchange of one item for another.
The system, at one time was so simple, and now is rife with fraud. It is so complicated, that universities graduate hundreds each year, with a degree in “economics.” Picture silver coins, dollars backed with gold, no depreciation, no withholding taxes, Social Security, and any of the over 700,000 pages in the IRS “code.” I always thought that a “code,” was a method of keeping information secret from an enemy. Is the IRS “code,” understandable by anyone? Does the Congress actually write it, as IRS employees tell us? Before the IRS, and all the complexities of modern living evolved, thanks to bureaucracy and legislators, life was so simple, that an accountant was not even necessary for 90% of us.
Now we must also consider foreign trade and trade imbalances, which are also exchanges, and of late, to America’s detriment. Before the gold standard was abandoned, so that politicos could spend without limit, and for no other real reason, all nations had gold backed currencies, and no currency went up or down in comparison to another with very few exceptions. This is the way it should be, in a sane world. Today, America exports a half trillion dollars more in goods, than it imports. As I write this, the dollar is “weakening.” I have to place that word in quotes, because no currency in the world is “strong.” The dollar is weakening against other currencies, thanks to our printing so many, trade imbalances, Iraq and Afghanistan, and several other reasons, which are far to numerous to mention.
What is the result of the dollar “weakening” against all the other worthless pieces of paper with ink on them in the world? A “weak” dollar makes exports easier, since the weak dollar makes our goods cheaper to a nation with a “strong” currency. Helps exports, huh? What exports? The factories are all closed, burned, or torn down in most cases, and the workers laid off and getting welfare, or having a difficult time. Recent layoffs, where the factories are still intact, such as the textile industry maybe, are a potential for reviving an industry, thanks to a weak dollar. Some will say that since foreign auto makers are now making their cars in the US, that this should help factory workers, and cause employment to gain. The trouble with the foreign auto plants, is that the profits go back to Japan or Germany, rather than to a US corporation. The labor layoffs are in the literal millions, and no signs of re-hires, so the BMW’s, Mercedes, and Hondas have not brought prosperity back to the US, and still a half trillion dollars goes out of America each year. The figure is growing.
“Weak” dollars also makes foreign travel less expensive for Americans, and more expensive for those foreigners wanting to travel to the US. This, of course, harms the tourism industry here, and helps that industry in nations with “strong” currencies compared to others, but not in actual value.
Then there are the exchanges between foreign nations and America, for America’s debt. In other words, other nations, such as Japan, Germany, or others, buy our bonds (debt) and receive interest in dollars for their investment. If the dollar slides, as it has of late, it may be good for any remaining factory output remaining, but it also causes other nations to either sell, or no longer buy US debt. Trillions of dollars in US debt, has been bought by foreign nations. If the weak dollar causes them to dump the securities they bought, it could cause the economy to crash, and the dollar to do the same.
Then there are the Chinese and Japanese, who have deliberately kept their currencies low, so that their merchandise will be cheap for American consumers to purchase. We now have the phenomena of “China Marts,” and Chinese merchandise everywhere. Were the Chinese to allow their “money” (unbacked pieces of paper with ink on them) to rise against the dollar, (unbacked pieces of paper with ink on them); their merchandise wouldn’t be as cheap as it is, and China Marts, Home Depots, and Hobby Lobbies et al, might find some other place to send their dollars.
All of this is “exchange,” and all, is full of political overtones, skullduggery, bribes, payoffs, and power.
There is also the wage aspect of “exchange.” When a worker exchanges his labors for a paycheck, he uses these dollars to exchange for food, payments on cars or mortgages, fuel, or whatever he needs to live. When a government levies huge taxes on the paycheck, this cuts the value of that paycheck. When the same government makes the workplace very expensive to operate, because of rules and regulations, which are administered by highly paid bureaucrats, the workplace owners, must raise the price of their output, to pay the cost of these insipid rules and regulations. Their output then becomes so expensive, that the output of foreign factories with no insipid rules and regulations administered by highly paid bureaucrats, can easily outsell the American factory output. The American factory has to raise the wages of its workers very high, to overcome the high taxes, so the worker can live from week to week. The factory owner then moves his factory to Mexico, or China perhaps, where there are no insipid rules and regulations, administered by highly paid bureaucrats. The factory owner, also learns that he can get workers for a fraction of the cost of American workers, because there are no high taxes and work rules on labor, as there are in America. The result is that American factories are shuttered, workers laid off, and billions of dollars in overseas merchandise floods America. Since there are millions laid off, it becomes increasingly difficult to sell the stuff.
The laid off factory and office workers, immediately go on “unemployment,” or other welfare handouts, which are paid by selling debt (printing press money) either to foreigners or to Americans, or as of late is happening, the government buys its own debt. Anything; just keep the presses running. The more the presses run, the less the dollar is worth, and as the dollar declines, foreign investors decide not to buy any more debt of America, which has become a rather weak trading partner, and regarded as shaky, unstable, and weak. When the welfare benefits run out for the laid off, many get two or three jobs, just to stay alive. Some commit crimes of theft, just to eat. Always, it seems, both Dad and Mom have to work to make ends meet, and this results in millions of “latchkey kids,” who will probably not turn out well, because of not having a decent home life with two parents, or at least a mom to care for them.
The once simple matter of exchanging labor for gold, gold for merchandise, and having currencies backed by gold, is out the window. It has been replaced by octillions of pieces of worthless paper floating around the world, endless ledgers of figures, and millions of government checkbooks sending out increasingly worthless dollars to all who request them. This then brings us to foreign aid. When America subsidizes foreign nations, and especially Israel, to the tune of trillions of dollars per year, this not only weakens the dollar, due to their numbers, but it also harms the receivers of the largess, by destroying their economies. Just a simple explanation and illustration will suffice, and you can apply it to any nation receiving something for nothing. Take an innocent child, and spoil him rotten by giving him limitless toys, games, clothes, and anything he desires, and he will grow into a perfect example of an adult who is irresponsible, untrustworthy, lazy, incompetent, and useless. It has happened millions of times. The same thing happens to recipients of SFN, (something for nothing) be they foreign nations or welfare recipients any place. In the case of foreign aid, and welfare in general, where is the exchange? There is none. The dollars are handed out, and what is received for them? What is exchanged? Nothing, and that’s just another problem with not only America, but several other nations in the world. The nations who have taken our jobs and factories, through our default, do not seem to have any welfare, high taxes, huge bureaucracies, or the like. This has reduced us, as now jailed Representative James Trafficant says, to “doing each other’s laundry,” and that is not the way the Founders intended us to go down in flames. Protect yourself.