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Winning The Global Export Race

Tyler Durden's picture


It is no secret to anyone that as we said some 3 years ago, the world is now engaged in all out currency warfare whose sole goal is destroying one's own currency faster and more brutally than "the other guy" can. Because while devaluing one's currency is imperative in order to return to a viable debt load, about $40 trillion less than where it is now (as per BCG) by pushing monetary inflation upon one's people and inflating said debt away, just as important is to stimulate one's economy and exports which, all else equal, can only be done by making them cheaper to one's trading partners. It is, after all, a zero sum world.

This is precisely the tug of war that the developed world is caught in currently, where every attempt is made to talk down one's currency, and when that fails, to dilute it by printing more of it (the Fed), to backstop it with collateral of every lower quality (the ECB, although in Europe's case it is more of an involuntary phenomenon), or just to talk, and talk, ant talk (Japan).

Yet while every country with a self-respecting central bank (i.e., currency printer) hopes that they will be the ultimate winner of the currency debasement export race, what has become obvious over the past 30 years, is that when it comes to specializing in exports, there is just one true winner: a winner which is self-evident from the chart below.

So the question becomes: while everyone is scrambling for the peanuts and breadcrumbs of marginal exports while injecting trillions, then quadrillions, then quintillions and so on, to make their exports "attractive", is China merely sitting on the sidelines and smiling, knowing well that when it comes to Ricardian dynamics, there is nobody who can ever catch up or slow down its momentum, benefiting from a (still) cheap labor force that is second to none, and an unprecedented work ethic (the lack of a social safety net does miracles for motivation), even if every country destroys their economy in the process of trying to catch up?

Of course, when every other country's economy implodes, that means the traditional Chinese export partners will no longer exist, and the country will finally have no choice but ending its mercantilist ways, and actually focusing on internal growth. But China, like the US in so many other things, will only cross that particular bridge when it has no other choice.


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Fri, 01/18/2013 - 16:10 | 3167278 diogeneslaertius
diogeneslaertius's picture


currency wars > trade wars > real wars

always resulting in a tighter control grid on the human resources by elites


how many thousands of years now?

every safety net thus far has been a trap. its culture - a noble culture is all that matters in some last analysis.

Fri, 01/18/2013 - 16:22 | 3167308 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

Hey, just want to give a shout out to my fellow AG stackers here on ZH.  Silver is going to crash hard Monday…I know this because I just bought a bunch of silver eagles and that my friends is the way my luck runs.  Happy stackin :)

Fri, 01/18/2013 - 16:26 | 3167326 LawsofPhysics
LawsofPhysics's picture

Thanks, so buying opportunity on Monday.  Good to know.

Fri, 01/18/2013 - 16:32 | 3167338 gmrpeabody
gmrpeabody's picture

If I buy Monday..., you may want to wait till Tuesday.

Fri, 01/18/2013 - 17:15 | 3167438 Haager
Haager's picture

That'll make it Wednesday.

Sat, 01/19/2013 - 17:08 | 3169442 The Miser
The Miser's picture

Thursday looks like the day.

Sun, 01/20/2013 - 03:47 | 3170268 MSimon
MSimon's picture

I'm buying gold - plated PCBs.

Fri, 01/18/2013 - 20:27 | 3167990 Son of Loki
Son of Loki's picture

I foresee a surcharge on all property owned by foreigners in the USA. Many countries already do this.

Fri, 01/18/2013 - 22:20 | 3168206 philipat
philipat's picture

QE isn't achieving the goal of pushing down the USD because other CB's are onto the same game. The USD has been in a trading range around 80.

IF the Fed really wants to achieve a lower USD, it seems to me that it will have to use the strong inverse correlation USD/Commodities, especially PM's and allow the latter to rise substantially. The Fed can't have it all and this would appear to be the lesser of two evils, recognising that it can't keep a cap on PM's forever anyway. May as well abuse the role of the USD as the world reserve currency whilst it still is.

Fri, 01/18/2013 - 16:10 | 3167281 falak pema
falak pema's picture

only one winner on this paradigm chart of current globalism / China!!!

Fri, 01/18/2013 - 16:13 | 3167288 diogeneslaertius
diogeneslaertius's picture

NWO moved their main base to China and was setting up auto mfg infrastructure pre ww1


they put into powr both kai-shek and mao


they are currently cooking down the old world western countries - indonesia etc. have come along well - all thats needed is a decade or two of cultural debasement as the slave nations come to power under a one world order (even before the official IPO)

Fri, 01/18/2013 - 16:57 | 3167378 James-Morrison
James-Morrison's picture

The Chinese are so glad that we are glued to tube, illiterate and have not read "Trojan Horses for Dummies".

Sat, 01/19/2013 - 06:34 | 3168567 Mountainview
Mountainview's picture

Only possible conclusion: Buy CNY !!!

Sat, 01/19/2013 - 09:13 | 3168619 ATM
ATM's picture

CYB and I own some.....

Sun, 01/20/2013 - 03:49 | 3170269 MSimon
MSimon's picture

kai-shek made his nut selling drugs. You can look it up.

Fri, 01/18/2013 - 17:20 | 3167457 bank guy in Brussels
bank guy in Brussels's picture

There's really another big winner on the above chart ... South Korea

Up in every category and big-time in most

In fact South Korea is one of only two places in the world with consistent 5%+ plus growth over five decades, along with Taiwan ... a much longer record that China's boom, which has been recently sharp but is much more fragile

And South Korea is a decent place, with human, social and labour rights, health care for everyone (given by their autocratic ruler General Park half a century ago!), low gov't debt, and they even have had a fifteen-year moratorium on the death penalty ... They are nearly a European Enlightenment country

And they are at the technological cutting edge of the world right now ...



Fri, 01/18/2013 - 17:54 | 3167585 LawsofPhysics
LawsofPhysics's picture

wait a minute, where the fuck are the financial "products"?  LMFAO!!!!

Fri, 01/18/2013 - 18:23 | 3167700 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

When the f*ck are the ideologues on Fox News gonna notice this fact around the world: when you make sure the society works for EVERYBODY in it, guess what IT"S A BETTER COUNTRY. Even Henry Ford knew he had to pay his workers a decent wage because THEY WERE HIS CUSTOMERS. Gee does GERMANY have any labor rights? Does Korea have universal health care?

Fucking scorched earth elite in the US: rape and pillage and then move on to the next country you can buy and rape and pillage. Stupid pusher kills all of his junkie customers then constantly has to find a new neighborhood to work over...

Fri, 01/18/2013 - 18:54 | 3167775 Flakmeister
Flakmeister's picture

I guess there are a few people here that notice these things.....

I'll take some liberties with Hegel.... "purity of ideology and nothingness are the same"

Fri, 01/18/2013 - 20:32 | 3167994 Son of Loki
Son of Loki's picture

+1,000 on SK and Taiwan.

Fri, 01/18/2013 - 16:11 | 3167284 LawsofPhysics
LawsofPhysics's picture

Tme to fix some "imbalances."

Fri, 01/18/2013 - 16:29 | 3167333 BattlegroundEur...
BattlegroundEurope2011's picture

"Not until all the slaves are on equal footing with each other"


Fri, 01/18/2013 - 16:35 | 3167344 kaiserhoff
kaiserhoff's picture

You don't have to outrun the bear to avoid being eaten.  You just have to outrun the other guy.

Fri, 01/18/2013 - 17:05 | 3167400 LawsofPhysics
LawsofPhysics's picture

"Everyone shall work for Chinese wages!" - NWO

Fri, 01/18/2013 - 21:49 | 3168153 SaveTheBales
SaveTheBales's picture

If Monster Boxes are any guide, price-suppression and abundance don't mix, so good luck with that.

Fri, 01/18/2013 - 16:16 | 3167296 newdoobie
newdoobie's picture

I tell this story to everyone I meet and share it on the net, but all I hear is  "crickets"

Fri, 01/18/2013 - 16:20 | 3167304 PUD
PUD's picture

You cannot breath the air in China. Fruit trees have to be pollinated by hand because the bees are all dead....China will die too...maybe by a different sword but die they will. There are limits to "growth" earthly limits as well as debt/money limits

Fri, 01/18/2013 - 16:22 | 3167310 azzhatter
azzhatter's picture

I always laugh when people say China labor is getting too expensive. All these plants will move back to US. Yeah right. US is becoming more uncompetitive, not less. Nobody is going to close a $200 million dollar plant in China and move to US to pay higher labor costs. Sure, there are quality issues and shipping costs but nothing that would make the shuttering of a plant a viable strategy. And there are many more more options than the US. Africa probably has a good 30 year run for slave labor, India, Indonesia, When people move product back to US it will be automated, not to increase jobs

Fri, 01/18/2013 - 16:46 | 3167365 Spitzer
Spitzer's picture

Low currencies are bad for exports, contrary to popular keynesian beliefe.

The USD has been falling for 10 years yet the trade deficit is wider.

The Euro rose over the same period of time and German exports went higher

Fri, 01/18/2013 - 17:05 | 3167390 akak
akak's picture

Not to mention how the debasement of currencies punishes imports, and savers, and investors, and the overall economy and society as a whole, through the inevitable economic distortions caused by the debasement and the resulting unproductive (or counterproductive) malinvestments.

This myopic and idiotic, neo-mercantilist focus on exports, Exports, EXPORTS, in disregard to ALL other considerations, is the height of economic idiocy.  Which must be precisely why it is so popular among the Keynesians and most other pro-Establishment, pro-status-quo shills.

Fri, 01/18/2013 - 19:50 | 3167887 Ghordius
Ghordius's picture

+1 both. if it does short term "wonders", who cares about mid- or long term?

Sat, 01/19/2013 - 17:59 | 3169538 falak pema
falak pema's picture

there is ONE major historic impediment to avoiding imports : cheap imported oil going market priced, our blood line of first world that has made the world addicted to fiat pump since 1973 spike. 

We needed to get off that addiction in 1979. We didn't and Reagan was all for opening the ME oil tap and saying :  what's all this peak oil nonsense? Our Saudi freinds can jst pump it up if we do a little bit of housekeeping on our side.

That decision just made the fiat bonzanza four times bigger in 2008....

So there are some commodities that are vital to the industrial model. Importing them becomes "non negotiable"...


Fri, 01/18/2013 - 17:06 | 3167406 LawsofPhysics
LawsofPhysics's picture

Yes, the Germans have done great, now about those PIIGS...

Fri, 01/18/2013 - 17:46 | 3167560 viahj
viahj's picture

it's PFIIGS now, the F is silent (for now)

Fri, 01/18/2013 - 18:06 | 3167631 Black Markets
Black Markets's picture

Also "made in America" is a stamp of a poor quality/poor build product.

Look at American made bikes, cars, planes, beer, tools, appliances... all dreadful.

Who here would drive an American car or drink American beer? Not me, I would rather have a skateboard and drink my own piss.

Fri, 01/18/2013 - 22:53 | 3168260 11b40
11b40's picture

What a crock of shit. Enjoy your piss.

Fri, 01/18/2013 - 18:30 | 3167726 GreatUncle
GreatUncle's picture


$200 million dollar plant in China - was possible before.

The problem now is you can't make the savings to raise $200 million dollars and build that plant in the US.

Get this then, go to equal, then you have to reduce operating costs lower by $200 million in the US then it may happen.

That means if you think China is slave labor what would $200 million under be that is lower than slavery.

So it will never happen unless you kick free trade out of the window, means tarrifs to protect your own industry.

Sat, 01/19/2013 - 00:10 | 3168374 brown_hornet
brown_hornet's picture

One musn't ignore tranny costs, which are probably headed north.

Fri, 01/18/2013 - 16:26 | 3167322 negative rates
negative rates's picture

or just to talk, and talk, ant talk (Japan)...............At a time when talk ain't cheap either.

Fri, 01/18/2013 - 16:26 | 3167325 Kreditanstalt
Kreditanstalt's picture

Economies with less of a social welfare burden are more productive.  Simple, so simple that North Americans can't comprehend it...when COST is taken into account, lower living standards mean greater productivity.

Why pay some western worker $10-$20-$40/hour+benefits+pensions when you can hire a foreigner - even if HALF as well-trained - for 1/10 that amount?  I don't blame business for outsourcing at's LOGICAL.

We are burdened with unions, minimum wages, border controls, lack of free labour movement, massive military spending, high taxes, social welfare costs, big government and deficits.

Other economies, where people don't have i-gadgets and junk but also no debt, are more productive, nimble TIGERS!

Fri, 01/18/2013 - 16:36 | 3167347 debtor of last ...
debtor of last resort's picture

There are debt slaves and labor slaves, indeed.

Fri, 01/18/2013 - 16:41 | 3167357 smacker
smacker's picture

Has it occurred to you that the Western political elites have spotted this disparity?, and are now trying to close the gap on behalf of their donors and paymasters.

Fri, 01/18/2013 - 16:53 | 3167373 Kreditanstalt
Kreditanstalt's picture

I'll discount the opinions of anyone who "hates the rich" or wants to "tax the rich".

Every employer should have the absolute right to source the cheapest labour and lowest costs and taxes possible - WITHOUT taxpayer money, government favouritism or state protection of any kind.   The only problem is government interference in the economy. 

Government itself is the more serious threat...much more than the media-created "evil corporations" bogeyman.

Fri, 01/18/2013 - 17:22 | 3167469 debtor of last ...
debtor of last resort's picture

I work for the bogeyman, i see things, hear things, experience things. It's not about 'working for', it's financialisation.
Multi's are the same alimentary canal as government and tbtf.
In other words, globalized fascist fucks.

Fri, 01/18/2013 - 17:31 | 3167505 smacker
smacker's picture

As a passionate believer in open free market capitalism, small government and not punishing people who become rich by honest means etc etc, on principle I have to agree with you on this.

However, it does create a huge problem for many (most?) of us in the West, does it not? Very few of us would be paid as well as we are (or were) if we had to compete with low-priced foreign labour in a free-for-all market. I for one do not want to see Western wages engaging in a race to the bottom, which would adversely affect many features of our societies.

I admit to not knowing what the solution is...

Fri, 01/18/2013 - 17:42 | 3167541 Bananamerican
Bananamerican's picture

"terriers and barrifs"-George W Numbnuts

Fri, 01/18/2013 - 17:54 | 3167582 viahj
viahj's picture

in the 'human' world there is no equilibrium.  the US worker was raised from slave to a comfortable level, even wealthy in the eyes of those who did not rise with them.  that cannot be stabilized, there is always someone who wants your job and will take less for it.  the US worker is now on the downslide while others rise.  that is 'human' economics.  central planning seeks to equalize all and will always fail but in the process they will destroy much wealth and liberty.

Fri, 01/18/2013 - 18:12 | 3167660 smacker
smacker's picture

Yeahbut...don't forget that such debates about wages usually only affect some employees. If wages were driven down to compete with cheap foreign labour, the corporate elites would unlikely be affected and may even benefit through presenting higher corporate profits and therefore earn bigger bonuses. And of course the political elites themselves and the armies of state apparatchiks would not be affected, not least because cheaper foreigners would not be eligible for the jobs, eg: a cheaper foreigner who didn't demand the expensive security measures could not compete with Obama for his job.

The bottom line of all that is that you'd end up with a society that was even more financially polarised than it is today. If you want to examine one country that I know a little about which is like that, take a look at Brazil.

Fri, 01/18/2013 - 18:10 | 3167646 Pants McPants
Pants McPants's picture

The above comment is a textbook example of someone who either doesn't understand free market economics or doesn't believe in free market economics.

How can you tell?  Read/listen to first word of the next sentence/paragraph after someone espouses his or her support for the free market.

If that person uses a conjunction, chances are you're dealing with at best a misguided worst a charlatan.

Edit: I'm referring to Smacker's comment

Fri, 01/18/2013 - 18:15 | 3167670 smacker
smacker's picture

And your comments are a textbook example of someone who has a black & white view of issues and doesn't understand "pragmatism".

I'm referring to Pants McPants's comment.

Fri, 01/18/2013 - 18:24 | 3167709 Pants McPants
Pants McPants's picture

Let's stay on topic: do you understand the contradiction in your post above?

Fri, 01/18/2013 - 18:57 | 3167771 smacker
smacker's picture

I'm on topic responding to your comments.

There is no contradiction. I refer you to my comment concerning "pragmatism". IE: nothing is absolute.

Understand this: I do not believe in anarcho-capitalism (that I see as 0% government, which I believe 'Kreditanstalt' alluded to) just as I do not believe in 100% government. Thus my views about Western wages do not contradict my belief in free market capitalism. Perhaps the solution is for wages in places like China to be raised to Western levels? which would not only raise their living standards but also eliminate wage disparities.

Are you with me?

Fri, 01/18/2013 - 19:01 | 3167790 Pants McPants
Pants McPants's picture

Hmmm, nothing is absolute?

You should probably re-think that statement.

And I'm not here to prove or disprove your support (or lack thereof) of the free market.  I'm drawing attention to your contradicitions and I suggest you use differnt terms when describing your beliefs.  You'll save yourself a few headaches.

Fri, 01/18/2013 - 19:14 | 3167816 smacker
smacker's picture

Sorry, I think you're a troll or you have a comprehension problem.And you've just contradicted yourself. tch tch. If you want to be picky over the words people use to express their opinions, find someone else.

Have a nice day :-)

Sat, 01/19/2013 - 09:55 | 3168650 11b40
11b40's picture

What is this "free market economics" of which you write?  Where on this planet is it practiced?

Fri, 01/18/2013 - 18:10 | 3167652 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Here, fixed it:

"I for one do not want to see the sun come up tomorrow morning"

Long, slow, steady slide to a level global standard of living. Them up, us down. We can bomb the shit out of a few places in the meantime but the money to pay for that is drying up fast.

America has plenty of money to solve its problems. What it doesn't have (any more) is representative, responsive government institutions and leaders that can look at long-term problems and take action for the nation. All they can do is shovel even more wealth to the top 0.01% (straight out of Grandma's Social Security check).

I read where if you subtract the nation's top 400 earners, America's per capita stats would make us a Third World nation. Sounds right to me. The net worth of the five Waltons EQUALS that of their 1.3 million US workers combined.

But do notice Korea: They DO have government institutions that can think and act and invest long-term and yes, still for the benefit of the entire nation, not just 400 of the citizens. Instead of the "rape and discard the empty shell" strategy of our nation's "elite".


Fri, 01/18/2013 - 19:35 | 3167866 secret_sam
secret_sam's picture

We've applied the capitalist doctrine to government.  You can have all the government representation you can AFFORD.  Very few people can afford it these days, so only a tiny number of Americans get to divide it all up amongst themselves.

That some folks think this is how things should be is not surprising--there have always been fans of monarchy and feudalism.  Even Ben Franklin was a Tory for a long damn time, and he was certainly one of the smarter guys of his generation.

Sat, 01/19/2013 - 22:23 | 3169949 Nels
Nels's picture

Economies with less of a social welfare burden are more productive.

Profitable, surely, but I'm not so sure that you can draw the line to productive.  The Germans are fairly productive.

Fri, 01/18/2013 - 16:27 | 3167329 strangewalk
strangewalk's picture

The only real winners have been the elites heading up the multi-nationals operating in China, and the chart is their globalized house of cards. 

Fri, 01/18/2013 - 16:39 | 3167351 Flakmeister
Flakmeister's picture

I hope the historians are taking good notes....

Capitalism for all its virtues will eventually consume the host...

The phase that we have now entered, competitive devaluation, is heralding the onset of the endgame....

In this phase, the uncompetitive economies will gradually lose the ability to bid for the marginal barrel of oil. If you don't believe me, check out the oil demand for you favorite basket cases here:

Any questions, bitchez?

Fri, 01/18/2013 - 16:54 | 3167374 Kreditanstalt
Kreditanstalt's picture

You're on the wrong site.

Fri, 01/18/2013 - 17:00 | 3167389 Flakmeister
Flakmeister's picture

Peak oil ain't just for doomer sites anymore, if you can't see how it plays out, then you truly are a dumb blonde....

Don't worry, Austrian Economic theory is perfect for a low tech agrarian society that may be awaiting us in 80 years... You guys were just too early...

So, for shits and giggles, could you explain what happened in Egypt over the past few years? 

You clearly got the wrong target in your cross hairs if you want to figure out what is going on...

Fri, 01/18/2013 - 17:09 | 3167413 Kreditanstalt
Kreditanstalt's picture

Re-reading you, we agree!  ...I take it back.  After all, you said "Capitalism, FOR ALL ITS FAULTS..."

Thought you were just another anti-corporate, anti-"rich" economically-envious socialist...


Sat, 01/19/2013 - 10:25 | 3167517 Flakmeister
Flakmeister's picture

Pretty broad brush you paint with, sweetie (sorry, I have hard time taking that avatar seriously)

What would be the adjectives that you would approve of?

Fri, 01/18/2013 - 17:00 | 3167387 alangreedspank
alangreedspank's picture

Of course, capitalism. I hope court historians are taking good notes, comrade.

Fri, 01/18/2013 - 18:57 | 3167397 Flakmeister
Flakmeister's picture

Wow, do you also read with your blinkers on? Read again very closely...

To see the flaws in capitalism in the face of real limits, you don't have to be a communist....

Fri, 01/18/2013 - 17:03 | 3167396 SheepDog-One
SheepDog-One's picture

We've already been in 'the endgame' since 1980 at least.

Fri, 01/18/2013 - 17:08 | 3167412 Flakmeister
Flakmeister's picture

You can debate about when it started, when the US peaked in 1970 should have been a wake up call....A few figured it out, but they were "the dirty fuckin' hippies" aka the Club of Rome...

As for 1980, I do agree that if we were going to make the required changes, that was the time, but the lure of a return to the good days with the Gipper took care of that....

Fri, 01/18/2013 - 17:16 | 3167445 Dr. Engali
Dr. Engali's picture

Remind me again where we have a capitalistic system. Capitalism in its true form can't consume itself because institutions that can't survive on their own would go bankrupt. But since we don't allow bankruptcy we get "too big to fails" which causes the system to become more unstable. The system we have us fascism, but you already knew that and choose to ignore it with your posts.

The fact is that we will never have any of the isms other than facism in their purist forms due to the fact that there is corruptionand greed distorting every system.

Fri, 01/18/2013 - 17:32 | 3167491 Flakmeister
Flakmeister's picture

Are you then willing to agree with me that "text book" capitalism is a fictictuous idea since it presupposes that basic sociopathic tendencies are magically held in check?

I think that you could argue that the laissez-faire capitalism must  eventually evolve in fascism... After all out of all those sucessful enterprises, one will eventually succeed in basic regulatory capture...

There is also this nasty little feature called "The tragedy of the Commons", i.e. how you do you discount the value of the earth,..

Fri, 01/18/2013 - 17:41 | 3167537 Dr. Engali
Dr. Engali's picture

I will agree that any of the isms are fictitious ideas. They are all an illusion that will work for a period of time until corruption finally deals them their death blow. As far as the trajedy of the commons goes, the cleansing resets of the market allows for old technologies and industries to go away and new technologies/industries to take over. Unfortunately we have a fear of resets and adopted an infinite growth model which will eventually consume all of our resources. In the end that should reduce the population down to a level more harmonious with nature. That's if we don't blow the place up first.

Fri, 01/18/2013 - 18:05 | 3167626 Flakmeister
Flakmeister's picture

I could quibble about a few points but I'll take a stab at this:

In the end that should reduce the population down to a level more harmonious with nature.

That is one hell of a statement. So who gets to play God? Or do we let the "market" decide. I suppose that for the former there no shortage of volunteers...

       I'll throw this out, another failure of the free market is the complete and utter failure to discount the cost of all those extra people you currently bemoan.  I am sure that if the rich West (the ones with the most to lose!) had spent a few 10s of billion (1970 dollars) on birth control and other aid for countries with rocketing population growths that FV (discounted by using realistic rates) of that investment would dwarf the costs of hitting the wall the way we are about to...but I digress...

You appear to underestimate the scope of ToTC, e.g. Fukashima and Chernobyl are dead zones forever, for all intents and purposes. We do have only one crib to shit in after all....

Fri, 01/18/2013 - 18:20 | 3167689 Dr. Engali
Dr. Engali's picture

Nature will decide. Once our energy resources are used up do you really think that 7 billion people will survive? You're a smart person take a look at oil vs population growth. Once that oil is used up there is no possible way 7 billion people live on this planet, unless of course we discover some major energy source then that changes everything.

As far as bemoaning people, I for one don't wish bad will on anybody. In my perfect world everybody could prosper, but I am a realist and I know this planet has limits. Once again it is not the failure of the free market because the free market never existed.

Fri, 01/18/2013 - 19:03 | 3167795 Flakmeister
Flakmeister's picture

The free market cannot exist, at least in any form deemed fair and free, because it denies the reality of the human condition... It is chimeric ideal...

Hell, even Adam Smith, knew that the market had to regulated and in that lies the root of all evil vis a vis the state...

Wait a bit and I dig out out the quote on the Internet thingie if you don't want to give me the benefit of a doubt...

And yeah, more than few will have to go, things may overshoot the other way a lot more than anyone realizes...

Fri, 01/18/2013 - 19:18 | 3167825 Dr. Engali
Dr. Engali's picture

We are talking in circles now because we have already come to the agreement that the corruption of people will eventually destroy any system. Having said that Adam Smith is wrong , because it is that very regulation that allows the corruption.

Consider a garage sale, or a flea market. Both are perfect examples of functioning free markets. You have two or people haggling and coming together on a price if an object. Throw in a third person and you have a bid on the price of the object. The value of the object is only worth what the next person is willing to pay for it. There is no outside interference , no government to say too much or too little was paid for the object. It is only when government becomes involved and favors are bought that distortions happen in the market place.

Again I know it's a pipe dream. No such system can function on a grand scale , but they do function nonetheless.

Fri, 01/18/2013 - 19:36 | 3167847 Flakmeister
Flakmeister's picture

And a flea market does not represent a real economy...

Obviously they function, but pursuit of a myth seems pretty misguided...

Some more Smith before I attend to my Cioppino (seems he was at a loss as well):

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary."

Sat, 01/19/2013 - 08:27 | 3168599 overmedicatedun...
overmedicatedundersexed's picture

THE BASIC TENENT OF WORLD ECONOMICS IS TOTAL trade is needed to grow a nations

what free trade is , is the tool of mega international co's and banks to maximize the profit of these .gov protected organisations,, not the main street people's economy..

the free traders here are NWO useful fools and some do not even know it.[so call conservative adam smith types]

in the history of USA, we used tarrifs to fund the whole federal budget and our economy increased the standard of living year after year..with the introduction of FED AND INCOME TAX, we have had boom and bust but a steady march to concentration of global elite power and more and more loss of jobs to the lowest cost nations .. over the good of our people..the globalists will scream look at all the low cost tv and toys..for which the average american has had his dollars devalued by over 90 percent and his job income dropping like rocks..

to all who support free trade I SAY STOP LIVING WITH YOUR EYES WIDE SHUT.

PS fair trade is not FREE TRADE, international banks thank you.

Sat, 01/19/2013 - 10:19 | 3168665 11b40
11b40's picture

Thank you!  The root of our problems is jobs, and the jobs were sold out by means of "free trade".  What tripe!  Our entire economy could be fixed at the borders.  "Fair" tarrifs on goods coming in, and careful scrutiny of what is going out.  Want to incorporate in some foreign tax haven?  Then take your product elsewhere.


Sun, 01/20/2013 - 11:00 | 3170495 alangreedspank
alangreedspank's picture

The state doesn't solve the tragedy of the commons, it creates it.

Sun, 01/20/2013 - 21:19 | 3171596 Flakmeister
Flakmeister's picture

My what a pithy piece of horseshit...

Care to elaborate your thesis? We are all ears.

Tue, 01/22/2013 - 13:34 | 3175914 alangreedspank
alangreedspank's picture

"In economics, the tragedy of the commons is the depletion of a shared resource by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to the group's long-term best interests"

The state coercivly creates 'public' property (the 'sharing of resources') and destroys pricing mecanisms in the process.

Fri, 01/18/2013 - 16:39 | 3167353 TheSilverJournal
TheSilverJournal's picture

Yeah but look at how much currency the US exports...

Fri, 01/18/2013 - 16:50 | 3167369 freedogger
freedogger's picture

What happens when China's labour force is replaced by robots?

Sat, 01/19/2013 - 19:38 | 3169707 Shigure
Shigure's picture

China's labour force would emigrate?

Fri, 01/18/2013 - 16:58 | 3167382 besnook
besnook's picture

actually the area of the world that actually has substantial room to grow internally is asia, ex japan, singapore. africa also has some room but they have other issues. china has been actively encouraging internal growth for the last decade knowing the export trade will become a smaller and smaller percentage of their economy. in fact, the only large surplus it runs is with the usa and a lot less with europe.

the collapse will turn the west into a post katrina like apocalypse while asia will simply make a post west adjustment on the road to greater prosperity.

Fri, 01/18/2013 - 16:58 | 3167386 AgAu_man
AgAu_man's picture

I see that India still has "lots of potential".  Sorta like that ramshack local realtors are rying to sell  More slums than Slumdog millionaires. 

If it weren't for the IT jobs from Dell, HP -- and other tech jobs that India is forcing US companies to bring -- if they want to sell their wares, why... they'd, they'd... have... nothing (for the masses).  Ah, but they'd still have their nukes.  And their space program, right?  All imported from the US also, thanks to those expats returning?

Fri, 01/18/2013 - 18:04 | 3167509 akak
akak's picture

"Hello.  You are doing the dawging to the gustomer servicing of Dell.  My name is being Steve.  How gan I be doing the helbing of you today?"

Fri, 01/18/2013 - 17:04 | 3167398 geno-econ
geno-econ's picture

We are all playing a silly game pretending an invisible capitalistic hand will successfully guide us through the global economy to our benefit because we are the chosen Empire based on freedom, democracy and the American way of life. Once the Reserve Currency status comes to a crashing end, we will be like everyone else and will have to again go back to work and create real wealth----not live off past redistributed wealth, debt and pretension.

Fri, 01/18/2013 - 19:46 | 3167883 secret_sam
secret_sam's picture

The problem is that "The American Way of Life" is completely incompatible with either "freedom" or "democracy."

It's testament to how effective our propaganda is that more people don't realize this.

Fri, 01/18/2013 - 17:22 | 3167473 Peachfuzz
Peachfuzz's picture

Funny thing with all the fiat money creation Topsoil is still our #1 export, and we don't make a dime off of it. Followed closely by jobs, and then bull shit for a close 3rd.

Fri, 01/18/2013 - 17:40 | 3167534 fijisailor
fijisailor's picture

"cheap labor force that is second to none"

Second to none?  really?  Maybe in quantity but certainly not in terms of quality of product.

Fri, 01/18/2013 - 17:48 | 3167561 slackrabbit
slackrabbit's picture


chemicals, auto, office eqipment and mech (in total) have all gone down?

Who are the 'other's"

Fri, 01/18/2013 - 18:22 | 3167694 Stuck on Zero
Stuck on Zero's picture

They are not printing money to cheapen the currency.  They are stealing it in unison for the NWO.


Fri, 01/18/2013 - 19:58 | 3167902 earleflorida
earleflorida's picture

the chart looks more like a 'dna, genome map', of an extinct capitalist dinosaur... in the year of cyber`god's, '2525'

Sat, 01/19/2013 - 08:40 | 3168607 MinnesotaMD
MinnesotaMD's picture

I think the free-est markets possible are the greater wealth distributor.

Sat, 01/19/2013 - 09:38 | 3168639 overmedicatedun...
overmedicatedundersexed's picture

minnmd you think it but do you know it,,,,look at the results of free trade and the destruction of usa and the wests economy..and most important the standards of living fair trade is needed, free trade is the biggest tool the mega banks and internat co's have..or just keep your eyes wide shut. up to U

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