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Sunday, November 18, 2012

Men: Money Games

 Trade Secrets
Do you know his secrets?  Do you know his " trade secrets"...
A good area to gain knowledge and attention would be to learn about international trade.  This is a high level of interest among Gem Males.  Talking Trade is better than any pick-up line ....Ladies cast your spell ; influence him with trade.  Pow!  Right in the kisser!

Thousands of years of exchanging goods between nations has led to the evolution of the vastly sophisticated mechanisms that govern international trade today.  However, for all our all technology, we have lost sight of the basic principles upon which inter-national trade was founded.  While some countries continue to import far more than they export, many manage to maintain a healthy profit from trading overseas.  Nations that are oil or mineral rich such as the Gulf States ($520bn) and Australia ($20.7bn) tend to generate trade surplus; while manufacturing power houses such as Germany (€158bn), China ($155bn) and Japan (-$32bn due to earthquake) are also able to maintain a healthy profit from international trade, even though they themselves are not necessarily rich in raw materials.  Emerging economic powerhouses such as Brazil ($30bn) and Argentina ($12bn+) have managed to maintain both trade surpluses and economic growth as the ‘old powers’ of Western Europe and the United States grapple with perennial trade deficits through boom and bust.   In fact, the United States has sustained a trade deficit since 1975 which last year reached a staggering $560bn. Meanwhile in the UK, the trade deficit is so bad it is given in monthly figures.
So how do mineral rich industrial nations like the USA & UK defy sound economic reason and common sense?  One of cornerstones of international trade is that a nation seeks to export those commodities, goods or services which it has in abundance for those which are scarce.  This stands to reason, as nations rich in manpower and technology, yet poor in resources such as Japan depend upon the import of metal ores from Australia, rubber from South East Asia, and fossil fuels from the Gulf which can they turn into manufactured goods for export.  As far as is possible they manufacture what they need at home and import that which they can’t or don’t have.  Common sense prevails.  In contrast, the UK and the USA have spawned multi-national corporations which serve to suck in foreign imports on the basis of cost rather than need, and transfer the processing and manufacturing of goods overseas without hesitation simply to maximize profit margins.  From a corporate viewpoint this makes rational reading, but to their host countries this represents economic suicide.  Although the target markets and raw materials may lie overseas, the prosperity that comes from jobs and technology is lost along with the manufacturing base.  Recently this has come to a head as Amazon, Google and Starbucks have been called to Parliament to account for their tax avoidance and ravaging of the domestic economy.
In theory, trade deficits accumulated in times of austerity may be repaid during years of prosperity, but this has not been the logic applied by the United States or the United Kingdom.  The corporate culture has transcended the fundamental principles of national economies, with such absurdities arising as supermarket chains importing foods which are actually grown within their host country solely on the basis of consumer preferences and cost.  This defies the first principle of international trade, which is that you don’t buy overseas what you already have in abundance at home.  True, tomatoes grown in North Africa may cost less per pound than those in British glasshouses, but this policy results in lost revenues to the national economy as well as depleting water resources which the growing nation can ill afford.  The consumer may actually end up paying less for tomatoes, but the nation ends up paying more.  While spending £500m on tomatoes grown overseas may save the supermarket chain £100m, in effect it costs the domestic economy £600m in lost earnings and £500m in exported currency.  Once the cotton fields of India and the United States fed one of the world’s largest textile industries centered within the United Kingdom.  Today, little remains of the British garment and textile industry, and the internationally renowned fashion houses of the UK focus their manufacturing base overseas and import the finished goods at the expense of the British taxpayer.  In conclusion, it is entirely rational from an economic standpoint to suggest, where possible, that goods and services be manufactured and provided within the domestic economy.  If a nation needs to import technology and commodities, such as coffee or steel which it does not have, then it has to pay for them by exporting its own surpluses.   Until this presiding principle of trade is remembered, the Old World will never regain its prosperity.  
Article  written by: James Prince 
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