Archive for March, 2009

China Moves Against The Dollar

March 24th, 2009


With the G20 meeting of advanced economic nations coming up, China is pushing for a “new currency” to replace the dollar as the world’s standard.

According to today’s Wall Street Journal, “The unusual proposal, made by bank governor Zhou Xiaochuan in an essay released Monday in Beijing, is part of China’s increasingly assertive approach…”.

Anyone who knows Chinese politics at all would know that a senior official of this magnitude would not take an aggressive stand like this without it being the real government position. This is a bold move, and clearly part of China’s economic effort to overtake the USA as THE world’s superpower.

Make no mistake, Beijing views economic and military means as tools to further political goals.

Meanwhile, senior Washington officials have sought recently to “…reassure Beijing that the current US spending spree is a short-term effort to restart the stalled American economy, not evidence of long-term US profligacy (continuing weak policy).” Why is Washington so concerned with reassuring Beijing? Because they are funding our massive federal budget deficit. The Chinese funded 40% of 2008’s $500 billion deficit, and Washington is counting on them to loan us a massive amount to fund 2009’s $2 trillion deficit.

Our federal budget deficit quadrupling in one year? Surging to heights not seen since 1943 (when we were fighting the Japanese and Germans at the same time). It’s a fact.

This utter irresponsibility on our part is just the opening China needs to further its efforts to become the world’s dominant nation.

How did they get all this money? We handed it to them via the trade deficit. Every time we buy a cheap Chinese product instead of something made here, we are taking money out of the USA and giving it to them. Plus, the trade deficit drains our ability as a nation to produce items on our own, killing good jobs, which in turns causes the federal budget deficit to surge. Buying more American-made products is not just the right, patriotic thing to do it is the way to solve this recession and the counter China’s ambitions.

We dug this hole and it is time we started digging our way out. Please join me in thinking about the USA with every purchase.

Sincerely,

Todd Lipscomb

Founder of www.MadeinUSAForever.com, a source for products made in America.

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Mexico Threatens USA with Tariffs Over Truck Access Dispute

March 17th, 2009


Today the Mexican government threatened tariffs on 90 products they import from the USA because we will not allow free access of Mexican truckers back and forth over the border.

There are very severe safety issues involved with allowing truckers from Mexico to roll back and forth over the border at will. I know someone personally who was in his car with his family when they were struck by such a driver, injuring his whole family while the other driver, apparently drunk, disappeared.

This free access for Mexican trucks issues is one the worst parts of the NAFTA treaty not just because of the very real safety issues, but also due to security and job loss. Right now just south of our border there is a drug war that according the Wall Street Journal, killed thousands last year. Now is not the time to decrease security at our border. Plus, this will definitely mean Mexican trucking companies with foreign workers underbidding USA based trucking companies within the USA. Due to the wage difference (we pay a living wage to truckers here), the eventual effect will be to kill jobs, lower wages, and wipe out American trucking companies.

Don’t believe me? Does anyone doubt that Wal-Mart would use Mexican truckers if they could save a dime? Especially since they already have no issue being by far the biggest single part of our trade deficit?

If we let this happen, it is just a matter of time before there are destructive effects. As to the Mexican threat on tariffs for 90 USA products, well two can play that game, and due to our big trade deficit with Mexico, they are much more vulnerable if we actually stand our ground.

Please join me in contacting congress to say “no” on this important issue. Here is an easy way to write them: https://writerep.house.gov/writerep/welcome.shtml.

Sincerely,

Todd Lipscomb

Founder of MadeinUSAForever.com your source for American-Made products.

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Chinese Premier Expresses Concern Over USA Deficit Surge

March 14th, 2009


In a previously unheard of public exchange between senior government officials, China’s Premier Wen Jiabao expressed concern over the USA’s deficit spending and our government’s economic management. This forced the President’s chief economic advisor, Lawrence Summers to field an embarrassing defense of our surging federal budget deficit. The federal budget is forecasted to quadruple this year from $500 billion in 2008 to $2 trillion in 2009, reaching a record as a percentage of the economy not seen since World War II (when we were fighting Japan and Germany simultaneously). The overall deficit will increase just under 20% this year, or about $8000 per every American citizen.

China recently surpassed Japan as the USA’s biggest creditor, a far cry from several decades ago when the USA was the largest creditor nation. China funded about 40% of last year’s $500 billion deficit, so any growing unease on their part will make funding this year’s $2 trillion deficit very difficult.

This whole thing is disturbing on a number of fronts:

1)      Our deficit spending has put us in a place where a foreign government (China)  is increasingly dictating policy and demanding special debt protection ahead of other borrowers.

2)      Washington will probably management to borrow and print enough money to get through 2009’s $2 trillion, but faces the inability to fund future deficits. This could lead to default, even national bankruptcy.

3)      Borrowing for “stimulus” is actually sucking trillions of dollars out of the economy that could be invested in more effective economic activity.

4)      It is our massive trade deficit that has giving China this huge advantage over us.

5)      China, the new super power, has us in a dire economic position.

6)      We did this to ourselves! If only we would buy our own products and live within our means, we would still have economic security and prosperity.

We are in a pretty deep hole. What are we going to do about it? Pretty clearly we cannot count on Washington, and there is no such thing as borrowing our way to recovery.

As individuals, I believe we can have a real effect on the economy if enough of us actually care and do something within our sphere of influence. For example, if we live frugally and buy stuff that is made here, it really does touch others around. Someone had to make that pair of jeans, pillow, jacket, etc. We choose everyday whether that is done by our neighbor or someone in another country. When our neighbor does it, she or he not only makes something special for us, but is able to put food on the table for their kids, pay taxes, and contribute to our society instead of looking to the government for help.

Please stand with me.

Sincerely,

Todd Lipscomb

Founder of MadeinUSAForever.com; a source for products made in America.

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February Was Another Dismal Economic Month: The Solution is More Self Reliance

March 7th, 2009


Another 650K jobs disappeared, over 12 million people are without employment, and the unemployment rate spiked over 8.1% up from 7.6% in January. At this rate, we could easily hit 12% unemployment within this year.

Unfortunately, Washington is not in a position fiscally or mentally to help. The federal budget deficit is at least quadrupling to $2 trillion from $500 billion in 2008. It is becoming clearer everyday that “stimulus” is politician language for pork. We already had to borrow 40% of 2008’s deficit from the Chinese, but WHO will loan us the $2 trillion? It is just basic physics (not even economics) that this grave debt level is too much weight for the world to carry. They may get through this year, but trying to continue this direction means default and chaos – just look California on state level.

The economic theory of Keynes that seems to be in style was that government spending automatically created a “multiplier effect” beyond the dollar spent. For example, $1 borrowed and spent by the government was supposed to create something $1.50 in economic activity. This might work in certain very specific areas, like reducing our energy (oil) deficit, but the multiplier is simply a pleasant myth if the money is wasted. If the government borrowed to build a wind, solar, or safe nuclear plant, which in turn allowed us to import less oil or natural gas from our “friends” like Venezuela or Iran (With friends like these, who needs enemies?), than we probably could make the case of the overall economic activity being positive for the USA.

The economy actually runs on confidence and jobs. When people feel confident, they spend and create jobs. When people have jobs, they have confidence and spend.  This is a symbiotic, mutually beneficial economic relationship. However, when confidence wanes, and the government borrows like a Latin American government borrower on steroids, this does help economically or cause a net increase in employment.

However, we can drastically increase real employment without having to borrow a penny. All we need to do is focus more on self reliance, meaning shift part of consumption away from cheap imported goods to safe American-made products. It really is that simple.

The day this problem really starts to get solved is the day roll up our sleeves and start to fix it. Whining and bailouts are not going to make America great again, but we can and will once WE seize the day.

Please join me.

Sincerely,

Todd Lipscomb

Founder of MadeinUSAForver.com, your source for products made in America.

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