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Sask | On one hand you ask why I am so fixated on currency exchange and its effects on trade and then go on to say currency exchange effects trade.
And yet I am to beleive we still have "free trade", as if two companies in the exact same market but in two different countries are on the exact same level playing field and the one company with the most efficient production wins the market. That is how "free trade" is supposed to work, until you throw in just one variable such as currency exchange rate.
No comments on "free trade" between Canada and US lumber mills? Is it the most efficient lumber mill that wins the market and so trade moves freely, or is there one or two other factors?
And yest there absolutely is free money. All levels of US government are something like $100T in debt. And there is absolutely no indication of that being paid back. In fact it keeps being added on to. If you take something with no intention of ever giving back, did you get it for free?
Now, when that endless debt is put into the economy, does that or does that not impact the cost of goods? If it does, that impacts how those costs of goods are seen when compared between two different countries.
As Pofarmer notes, yes lots of trade flows switch directions based on currency exchange rates. As well as government policies like environmental, tax rates, healthcare spending and of course how move governments pay big corporations directly to "help" the economy. A government giving free money to a corporation in tax breaks, or zero interest loans, or simply incentives to build locally, all impact the how much more free that corporation can free trade its goods exported.
So yes, there is a very good reason to be fixated with the numerous factors that say "free trade" doesn't exist.
Which other factors should we go into depth on? Corporate tax structure or government gift to big corporations? Cost of doing business in one country vs another?
To Morningdews original reply on a universal currency. We actually had that not too long ago. A country could do whatever it wanted to its currency, and when another country called BS, that other country would expect trade settlement using gold as medium of exchange as that was a universal asset. Central banks gold reserves are more than a desire for pet rocks. | |
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China expands restrictions on rare earths and chips..
