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The Bretton Woods agreement reached in that little New Jersey town was a document enthroning the dollar, when the world community recovering from WWII ravages decided to peg the U.S. dollar to the gold standard at 35 dollars to each ounze of gold. |
Fort Knox was rendered so famous that it became an icon in the James Bond movie "Goldfinger" as an incontrovertible symbol of fiscal strength -- America had enough gold in reserve and both political clout and military prowess to back up any amount of its paper currency now being used in the Marshall Plan to revitalize a recently war-devastated Western Europe.
The protracted Vietnam War drained enough resources from America to effect a policy change -- in 1971 Nixon had to delink gold from the dollar, thus creating the first post-WWII landmark decision after which the dollar's value against precious metals went into free fall literally overnight.
That brought on the stagflation of the Carter years during the late 1970s, to be followed during the Reagan Revolution by a prolonged period of deficit spending which rose in lockstep with the nation's resurgent can-do spirit after the release of the hostages holed up for 444 days in Tehran's US embassy.
From that time on America had turned on the dollar-printing machine because she had learned that deficit spending didn't matter -- so long as her military power was second to none and the Anglo institutions were in place guiding the world's economic forums -- since no one in the world could effectively challenge the dollar's dominant position in the world's financial institutions and capital markets if everyone had fundamental faith in the tenets of economic theories upon which that dominance was based.
That's in fact how Reagan started to build his 600-ship fleet in the 1980s, how the Nobel Prize for economics started to be awarded in 1969, and how attending the London School of Economics came to be regarded as a badge of honor for the world's scholars.
This continued with both of the Bushes. Gingrich's Contract with America was actually the first blueprint for fiscal irresponsibility. Clinton's ability to get rid of most welfare benefits to able-bodied non-parents depended on what I'd call his Anti-Contract with America, which only a Democrat could implement in the real world. George W. Bush tried to bring back what his advisors had called the trickle-down economy to combat the Democrats' "voodoo economics" -- a term coined and a concept deadpanned by his dad's advisors including James Baker -- by lessening the tax burden on the rich in order to jumpstart job growth.
Trump advocates "America First" but in reality he only represents the interests of Rustbelt workers, the Rednecks and the Zionists. He is pushing aside Wall Street bankers in favor of economic mavericks like this Navarro chap who has always been the laughing stock of practicing economists.
The ill effect of his overall policies will be apparent as soon as the mist surrounding his protectionist agenda has been played to the hilt by the early part of next year after he has levied 25% tariff on 200 billion dollars worth of Chinese imports into America. The effects of the tariffs in disrupting the supply chain inside America itself will be most keenly felt at that time. His main thrust is merely a enrich-the-already-rich Program acting as a disincentive for achievement by the best and brightest in the country -- the higher middle-class wage-earners including the doctors, lawyers, software engineers and other employed professionals who cannot make tax deductions the way business owners can and therefore stand to suffer the most from the new tax regulations.
Tariffs on everyone except israel -- that's the way the American Jews surrounding Trump are trying to build on their economic retrenchment plans by taxing everyone at the state level. The state of California in the west, for example, has already promised to increase its sales tax revenue yert again just to pay the public school teachers -- who are already the highest paid in the country despite their lackluster performance as reflected by the poor scores of their pupils in tests for math and reading.
So their state education board has elected to circumvent this problem by making some pivotal changes in college admissions criteria for prospective matriculatiing students this year. Years ago it had already done away with two critical college entrance tests in which Asian immigrant students have traditionally excelled as admissions parameters on the pretext that only rich students could afford to take coaching classes to do well in the two tests -- in order to enlarge the pool of students eligible for "reconsideration" in the admissions process to the University of California system, and who gets admitted after such "reconsideration"? Non-Asian minorities such as blacks and Hispanics. This remedial action is therefore racist and is like shearing off one's toes just to fit into smaller shoes.
I am examining these measures taken by the Americans to show that in the present social climate, the systemic risks to be incurred by China if it continues to place faith in U.S economic institutions and to acknowledge American paper-swaps will be devastating. America is out to hurt China and no matter how much you try to explain the benefits of a win-win strategy they are not planning to be sincere about discussions on the negotiation table.
Externally, it is much better to use the dollars we already have to buy up all tangible assets that we'll need -- including but not limited to mineral-exploration and mining rights globally, at an greatly accelerated speed before acquisition costs skyrocket in short notice in anticipation of Chinese procurement plans.
Internally, it is urgent that we should set up social safety nets to mprove the social environment in China itself especially in medical, educational and housing areas. As we have seen during the recent China-led economic conference at BoAo, much has already been done but a lot is still in the planning stage.
Wei chao, M.D.