What should we teach our future American business owners?

Article by: Tronald Dump, ‘Merican’ president predicted in illuminati prophecy for 2020 apocalypse, Know Nothing Digest guest writer.

American business owners should understand these basics of monetary policy history in order to interact with the global business community on equal footing with their global peers.  Knowledge of what the gold standard was or what fixed rates are or relate to and why one would want to know, will help American business owners understand when exploitable opportunities are likely to exist in the markets they operate in.

During the late 1800s Britain was the most influential nation in the international banking community.  Britain tied the pound sterling closer to gold than silver at that time and the international fixed currency rates were tied to a gold valuation standard from around 1870 through 1920.  Discovery of gold in California and Australia secured the use of gold as the currency valuation-peg metal of choice because of gold’s rarity and adequate supply.   The influence of Britain on the international business community lead to the prestige of gold as a foreign currency valuation stabilization peg.  The process of payments under the gold standard was so complex that it puzzled even leading economic minds at Harvard in the 1930s.  Exogenous shocks lead to the discontinuation of the gold standard just after the first world war.

Fixed interest rates are defined as loans where the interest rate on the loan doesn’t fluctuate during the fixed rate period of the loan.  These reliable, fixed interest rates inspire confidence among lenders and encourage borrowing among entrepreneurs and subsequent market growth activity.  Understanding the Gold Standard Era and the Bretton Woods “Era” policies is important for American business owners to take part in today’s public debate over fixed rates and trade barriers that direct the construction of monetary policy.  Many business owners are voters who have been misinformed by political campaigns seeking to bring back the gold standard or to disseminate the distrust of the global banking community.  American business owners would do well to know that Bretton Woods isn’t where the illuminati lives.  The international money system underwent additional periods of change from the 1920s to the end of the 1930s, leading to the Bretton Woods conference, which lead to the International Monetary Fund.  The move away from the gold standard into the fixed exchange-rate system took the currency exchange market through disequilibrium and past the Bretton Woods Era with the guidance of Richard Nixon in the 1970s.  The overview of this global shuffle of currency exchange regulations loosened the exchange controls that inhibited international trade following country realignment activity post World War II.

It is important to understand that a tariff, in international trade, is defined as a tax on importing goods and services into a country.  International business persons will interact with tariffs in every country they conduct business in, except for Macau and Hong Kong, but their country status is ambiguous.  Understanding tariffs requires considering the gains and losses from putting up barriers to free trade between your country and other countries that your country engages in trade with (Pugel, p.137, 2016.)  Economists generally agree that less barriers to trade is better for the global economy, but policy makers often have other objectives.  Protecting certain sectors of the economy from foreign competition is often an attempt by politicians at maintaining support from their base; not an attempt at maintaining external balance of payments (Pugel, p,561, 2016.)  These protectionist measures, our economists assure us, are not sustainable over time, and American business leaders find time and again that this is in fact the case.  An open, free trading economy with a floating currency peg is more resistant to external exogenous shocks.

Independent market forces induce exchange rate fluctuations a great deal at times, and this inspires governments to engage in proactive policy measures to stabilize exchange rates.  Governments frequently restrict who has permission to do business in their domestic market, and how their country engages in trade through trade barriers and tax incentives.  Governments craft policies to manipulate access to foreign exchange markets through imposing capital controls (among other actions) limiting or requiring approval for payments related to certain international financial activities (Pugel, p. 465, 2016.)  These essential aspects of international economics will arm American business owners with knowledge that has the capacity to positively influence America’s position in today’s global economy.

Sources cited:

• Pugel, T., 2016, International Economics 16th edition

Advertisements

2008-2018 Foreign currency exchange speculation

By: gAberaham sLinkcolin, Russian (s.i.c) President and Illuminati Swim Team captain and Know Nothing Digest contributor.

Looking at the graphs below we can begin to gain an understanding of the month to month trade of peso, yen, euro for dollar from points in 2008 to this point in 2018.  From the graphs, we can see the period for Americans to take a cheap European vacation is coming to a close.  China seems to be attempting the re-establishment of its pre-global financial crisis Yuan exchange value.

When looking at the exchange rates and the pressures put on them to maintain value levels through and in spite of trade, we should remember the pull toward a country’s balance of payments experienced in economies throughout the globe.  The balance of trade can be visualized as the complex balancing act that it is by holding in mind that the foreign exchange market is not in any central location, but is the summation of a multitude of banks acting as dealers for traders who exchange currencies at these various bank locations.  These locations are considered the retail part of the foreign exchange market.  Much of the exchange that takes place on the foreign exchange market is done by firms exchanging currencies to conduct business transactions or to finance these transactions or to insure against currency devaluation at a later stage in an ongoing business transaction (Pugel, p.393, 2016.)  The currency valuation is also manipulated by monetary officials buying and selling currencies to keep their country’s currency value in the official fixed price range.

In the foreign currency exchange all countries either have floating or fixed exchange rates.  The floating rates are market driven, while the fixed rates are controlled by governments and financial institutions to vary in value in a narrow band around a fixed value determined by these authorities (Pugel, p.405, 2016.)

Analyzing the currency exchange rate of the Mexican Peso, we see that the average conversion rate over the past 10 years was 14.31.  Over the past 12 months the spot rate for currency exchange for the Mexican Peso was 18.68.  The rise in Mexican Pesos to US Dollars exchange rate over the past 12 months, when compared to the 10-year average rate of the Mexican Peso to the US Dollar, tells us that the long-term trend in USD/MXN is down, although still with a weaker Mexican Peso against the US Dollar despite the rise of the Mexican Peso’s value.

We will begin with the exchange rate of the yuan by noting that the average conversion rate over the past ten years for the Chinese Yuan was 6.52.  Over the past twelve months the average conversion rate for the Chinese Yuan was 6.72.  By comparing the average conversion rates over the past ten years of the Chinese Yuan with the average conversion rate over the past 12 months we can determine that the long-term USD/CNY trend is arguably flat (Forecast Chart, 2018.)

Lastly, we see average conversion rate for the Euro over the past ten years was 0.79.  Over the past 12 months the average conversion rate of the Euro was 0.88.  By comparing the average conversion rates over the past ten years of the Euro with the average conversion rate over the past 12 months, we can determine that the long-term USD/EUR is down, weakening the Euro against the dollar.

These graphs not only show the long-term patterns discussed earlier, but the effects of emerging economies engaging more fully in the more developed economies’ markets.  The month to month value fluctuations are often caused by investors hedging their transactions through covered international investment (Pugel, p.429, 2016.)

Sources cited:

• OFX, 2018, Forex historical exchange rates, https://www.ofx.com/en-us/forex-news/historical-exchange-rates/

• Federal Reserve, 2018, https://www.federalreserve.gov/datadownload/Chart.aspx?rel=H10&series=9501250ca603af0e256e3907909dfda7&lastobs=&from=01/01/2008&to=05/31/2018&filetype=spreadsheetml&label=include&layout=seriescolumn&pp=Download

• Forecast Chart, 2018, http://www.forecast-chart.com/usd-chinese-yuan.html

• Pugel, T., 2016, International Economics 16th edition

This story was brought to you in part through one world government grants and Liberal News Media Soda:

LNM Soda, if you’re not thirsty for us now, you’ll be thirsty for us later.

Diabolical immigration Lies

By: Dyin Read, Illuminati Military Director and Know Nothing Digest Contributor.

Research has shown that a great number of immigrants with low levels of education are currently involved in the United States labor force.  There is a frequently made claim of immigrants displacing native born laborers from the job market in the media.  Is this just fake news or are they stealing our jobs?  Economists using individual data covering occupational task intensity across the United States during 1960-2000, shows native-born and foreign workers with low education levels providing quite different labor skill sets (Peri, 2007.)

The new economics of labor migration makes wage rates in the migrant-related employment sectors more equal between countries.  The wage rates in high paying countries go down as the wages in lower paying countries go up.  There are wage savings benefits to the formerly higher paying country firms and wage payment increases for formerly low paying country firms. Labor migration has been documented throughout history to be an economy-developing feature of country evolution (Pugel, p.359, 2016.)

The complexity of migration as an economic institution comes from directly competing workers in receiving countries, but at the level of least skilled laborers, being threatened by immigrant labor.  World-wide labor output is increased by migration of workers, yet large swaths of workers often complain about the prevalence of a wide spread lack of a livable wage.  The tendency to focus on one aspect of migration in isolation to all others is prevalent in historic attempts at understanding the impact on sending and receiving countries.  In light of the frequent blaming of immigrants for job loss, wage loss, and unemployment, it is often ignored that currently the United States is receiving the biggest consistent flow of immigration in our country’s 240+ year history.  In 1970 the number of foreign born citizens was under 5 percent of the population.  By 1990 the number of foreign born citizens rose to above 9 percent of the population (Camarota, 1998.)

Analysis of global labor markets show that sending countries lose future tax payments the emigrants would have paid had they not left the country to work elsewhere.  This is known as the “brain drain” of a country or region when taken into account what the country or region has paid to educate the individuals that learned at public expense and moved away for better job opportunities (Rozzelle, 1999.)

There is an often, unrecognized benefit to emigrant-worker sending countries classified as voluntary remittances.  These remittances are monetary gifts from workers abroad to their family back home in the emigrant-worker sending country.  Employers in immigrant-receiving countries gain more than current citizen workers lose, as do the consumers receiving the produced products or services.  Other aspects or effects of migration are difficult to measure through accounting and direct monetary economical-analysis.  Migrant workers take knowledge benefits with them from the sending country to the receiving country.  This is a cost/benefit that is difficult to quantify monetarily through standard GDP numerical speculation.  The cost/benefit of migrants transferring congestion from sending countries to receiving countries.  The overcrowding of a receiving country is less of a burden on the public services of the sending country.

The benefits and costs from migration are similar to those felt from free trade.  There are benefits derived from an increased labor force to hire from in migrant receiving countries.  There are costs to domestic low-skilled workers to who must compete for the same jobs but with a larger low-skilled labor force to compete with.  There are gains in opportunities for domestic firms to supply high skilled workers and exports to developing economies.  With free trade, the sending and receiving countries can change places for different market segments.  This enable countries to attempt complimenting each other, in addition to just compete against each other.

In addition to complimenting each other through migration of low-wage workers to established economies and high-wage workers to developing economies and remittances from emigrants to sending countries, there is the migration of investment.  Foreign Direct Investment could be considered the opposite of remittances.  Instead of money coming into a country from the migrant workers abroad, FDI is money coming in from investors abroad to generate the growth of more revenue.  Some if this new revenue stays in the country receiving the Foreign Direct Investment, but most of the revenue generated is returned to the FDI sending country (Pugel, p.375, 2016.)

As we have discussed, immigration increases the supply of labor in the receiving country.  Critics rationally argue that immigration makes jobs scarce for native workers and that immigration will decrease wages.  There has been research offered that discourages the held principle that immigration only really creates fierce competition at the bottom of the labor market.  The truth is that, regional labor markets of the United States are not separate closed economies unto themselves, so we must recognize that capital and goods in addition to labor migrates between cities in this country.  The migration of all these inputs of production spread the effects of migration throughout the United States (Camarota, 1998.)

Sources cited:

• Rozelle, S., Taylor, E., DeBrauw, A., Migration, Remittances, and Agricultural Productivity in China, 1999, https://www.researchgate.net/profile/Alan_Brauw/publication/4726355_Migration_Remittances_and_Agricultural_Productivity_in_China/links/0912f511b0cf849b9d000000/Migration-Remittances-and-Agricultural-Productivity-in-China.pdf

• Pugel, T., 2016, International Economics 16th edition

• Camarota, S., 1998, The wages of immigrations, https://cis.org/Report/Wages-Immigration

• Peri, G., Sparber, C., 2007, Comparative advantages and gains from immigration, https://www.economics.uci.edu/files/docs/micro/s07/Peri.pdf

African Trade Blocs unite the continent like a Transcontinental Economic Rail Road

By:  IshiZuka Samo, Know Nothing Digest contributor and illuminati monetary fund board member

img_8260-1.jpg

The Powers-That-Be dictate that business investments are the largest direct gain in the immediate for whatever countries are able to establish strong and lasting economic ties in African countries.  There has been a great deal of international interest in foreign direct investment in developing nations in recent years as the field of global economic strategy grows its reach through the international academic and policy segments of the global community.  I am also in agreement that over-interdependence between regional groups cooperating could alienate integration into the global trade community, in a sort of self-isolationist movement between similar minded nations.

In recent history firms operating in Africa have been required to move from country to country an attempt to navigate different laws, tariffs and meet a different set of standards to engage in business activity.  Most countries in Africa are small and landlocked, creating challenges to accessing markets and scaling industries.  By the early 1990s, heads of African governments started to establish a trade bloc called the African Economic Community to better integrate the continent’s trade and remove trade and investment obstacles to overall economic growth on the continent.  Successes include the East African Community’s construction of a road running from southern Tanzania to northern Kenya, called the Arusha-Namanga-Athi River Road.  Other East African Community infrastructure projects include the reconstruction of the Kenya-Uganda railway and enhanced import and export traffic at the port of Mombasa.  Difficulties in African trade blocs include overlapping membership in the various regional economic communities, which involves being bound by different standards and rules creating challenges to meeting proposed obligations (Sow, 2016.)

 

Free Trade Areas have been another accomplishment of the African trade blocs. Challenges to building free trade areas include the lack of infrastructure, such as a cross continental rail system. In addition to the difficulties created by the natural terrain of the country, Africa constantly struggles with the historical division of the people of the continent by white ideas of race and racial inequality.  Geographic and racial diversity along with regional differences have vilified the phrase Sub-Saharan Africa (de Haldevang, 2016.)

 

In an attempt to overcome the difficulties of the continent, groups like the World Bank and progressive journalists have worked to empower the region with reliable statistics.  Knowledge of the problems and related factors is being compiled to research realistic solutions for the region’s economic planners.  Useful regional statistics provided include information such as: the population of Nigeria quadrupled between 2005 and 2015.  Also, there are over 180 million residents there today.  Nigeria is the world’s seventh biggest country. When one global infrastructure power player visited Nigeria, the first world press proclaimed that “Mark Zuckerberg visited sub-Saharan Africa” (de Haldevang, 2016.)  This plays into the historical narrative of regional and ethnic superiority that divides the country like a desert, instead of uniting the people like a shared economy.

 

Countries of South Africa:  Cabo Verde, Cameroon, Central African Republic, Chad, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Lesotho, Liberia, Madagascar, Malawi, Mali, Niger, Nigeria, Rwanda, Sao Tome and Principe, Sengal, South Sudan, Sudan, Swaziland, Tanzania, Togo, Angola, Benin, Botswana, Burkina Faso, Burundi, Comoros, Congo, Dem. Rep, Congo, Rep., Cote D’Ivoire, Gambia, The, Ghana, Guinea, Guinea-Bissau, Kenya, Mauritania, Mauritius, Mozambique, Namibia, Seychelles, Sierra Leone, Somalia, South Africa, Uganda, Zambia and Zimbabwe.

 

Sources cited:

The rise of the intra-industry trade machines:

The rise of the intra-industry trade machines:

By Magister Ludi, Know Nothing Digest staff writer

 

Common sense dictates that when a country trades in a certain product, the country should either mostly import or export that particular product.  There would be an export of some products in the country and an import of some other different products.  This is considered inter-industry trade.  This is the case for most trade between countries, however there is much additional trade in which a country both imports and exports very similar or even the very same products.  These are often varieties of products that are such close substitute products that they are classified within the same industry, such as automobiles or perfumes or cosmetics or potato chips or soda or oil or chemicals and such.  This is known as intra-industry trade (Pugel, 2016.)

 

Intra-industry trade is where economies specialize to take advantage of increasing returns, ignoring differences in regional endowments. This allows countries to specialize in a limited variety of production and exploit the advantages of economies of scale without reducing the variety of goods available on the market.  This can be seen when Wal-Mart provides mass quantities of a particular set of brands of a particular selection of products because they are available at a large scale at a certain time in a certain region.  The product selection varies by fluctuations in the suppling firms that Wal-Mart deals with. The supply chain of these supply firms react to differing factors in the various sectors of the various products that are utilized to produce the products that are produced by these individual firms.  Country’s produce different products because of the cost reduction obtained by producing only a limited range of products (Krugman, 2006.)  There is regional inefficiency created by the limited runs of the limited range of items produced.  The demand for the products supplied shifts from time to time and region to region and firms must follow these trends to obtain maximum yield and profit.  Trade policies change from country to country through internal and external forces, these regional policies directly affect what firms produce and when they are able to produce it.  These are the developing reasons for Intra-industry trade.  Predicting market demand is not dissimilar to predicting the weather and the market forecast dictates what products and firms will remain viable.

 

Sources cited:

 

img_8080

World Economic Development Trio by James Connaughton

Brazil has the world’s eighth-largest economy.   China is the world’s largest economy.  The United States is the most technologically powerful country in the world (Index Mundi, 2018.)  China boasts a closed and centrally planned economy, while Brazil is aiming to slow the growth of government spending and decrease barriers to foreign investment.  The United States, which slipped behind China in 2014 as the world’s largest economy, allows private individuals and firms to make most of the country’s economic development decisions (Index Mundi, 2018.)

China is the United States third largest trading partner, just behind Canada and Mexico, which share a boarder with the United States, while China rests over 7000 miles away.  This doesn’t mean that the United States has a trade advantage over China, the truth is quite contrary.  The United States has lost many of its firms from agriculture, textiles, electronics and construction equipment industry sectors to many countries across the globe, but none of these foreign countries’ gains have been quite as speculated upon in recent years as those of the firms that have been lost to China.  Much of the United States’ three and a half million job losses (because of migrating U.S. firms) to China are criticized because of the Asian giant’s frequency to operate in practically unregulated environmental fashion.  China is just as often cited to violate or inadequately protect its country’s workers’ rights.  Despite the job and company losses, the United States shipped almost $120 billion USD worth of goods to China in 2016 alone.  China, in 2016, exported just under 5 billion USD worth of goods to the United States (Yu, 2017.)

It must be remembered that China and the United States are both competitors and trade partners in the global market.  Companies flocking from U.S. shores like refugees to the ports of Guangzhou cannot be dismissed as a pure loss to the United States.  Using the one-dollar, one-vote metric, both countries become winners and losers in this employment opportunity exchange program.  Within each of these economically powerful countries the import goods consumers are winners from the opposite country’s producers of exported goods.  The shift from no trade, to free trade, increases overall market price in the long run (Pugel, 2016.)

China’s currency valuation and high debt levels continue to be a concern to the global economy as well as the foreseeable outlook of China’s foreign exchange policy. (FRB of Atlanta, 2016)

That being said, different countries have different advantages in producing goods for export.  Soil differences between the United States and Brazil give the U.S. an advantage over wheat production and Brazil an advantage in the production of coffee.  This in itself gives Brazil the power to control the U.S. production level in its entirety because of Brazil’s control over the U.S.’s energizing morning beverage of choice.  Productivity humor aside, the comparative advantages of these two very differently skilled countries illustrates clearly Adam Smith’s main points in his argument for international trade enabling as opposed to trade restriction for mercantilism-style self-preservation (Pugel, 2016.)

Brazil is continuing in economic reforms begun in 2016 to strengthen the workforce and industrial sector.  China’s reforms have resulted in efficiency gains that have increased GDP tenfold since 1978.  The United States faces long-term stagnation of wages for low-income families and inadequate investments in the country’s deteriorating infrastructure.  The United States seeks to renegotiate trade agreements with its close trading partners in the region under the North American Free Trade Agreement, popularly known as NAFTA.  Brazil and China are now experiencing the high points of their involvement in their own regional trading partner grouping.  BRICS, a widely popular acronym for five major EMEs: Brazil, Russia, India, China and South America is the current trade facilitating wonder of the world.  This economic block includes over 40% of the world’s population, a staggering segment of the consumer population of humanity (Index Mundi, 2018.)

China is a key trade partner for Brazil.  Although China is currently a main provider of goods for export to the rest of the world, including most significantly to us, the United States.  The huge economic advance of China is expected to change around 2030.  At this time, much of the population of China will have aged and there will be a higher demand for imports such as agricultural products and foodstuffs.  This is a key turning point for the Brazilian economy to prosper.  Currently, China exports to Brazil double what it imports from the South American country (World Bank, 2014.)

The rising youth population in Brazil and foreign direct investment at a record high of $15.4bn are fueling calls for economic optimism and further regional development.  Jaguar Land Rover opened a new factory in Brazil in 2016 at a cost near 300 million USD.  This is despite the fact that Brazil’s economy contracted for the second straight year (Leahy, 2017.)

Brazil’s government is a concern for regional stability, reflecting upon the 2014 Lava Jato (car wash) scandal.  This was a vast kick-back scheme led to the imprisonment of oil company, meatpacking and state-owned oil company magnates along with the disgrace of most of Brazil’s political parties and leaders (Londoño, 2018.)

Another comparative advantage of interest is China’s interest in Brazil’s largest and most popular social program: Bolsa Familia, a response to decades of regressive social policies and non-inclusive growth models.  Bolsa Familia was started in November of 2003 with half a percentage of GDP and has halved the country’s extreme poverty.  This is a reported change of 9.7 to 4.3 of the population.  A country with a population the size of China dreams of this feat of economic mobility.  Bolsa Familia reaches on quarter of the population.  The main points to be considered here are that Brazil entrusts poor families with small cash transfers in exchange for keeping children in school and attending preventative health care visits.  This is how Brazil has broken the transmission of poverty to the children from their parents (Wetzel, 2013.)

When comparing the economic advantages between the United States, Brazil and China, we see that the United States is known as the international community’s most technologically advanced and powerful economy and that Brazil is known as powerful international leader in manufacturing, mining, agricultural and service sectors, while China is known as the leading exporter of commercial goods.  As the international community (China, Brazil and the United States specifically) continues to develop, the global population configurations and technology advantages are changing.  Free trade leads to a fully efficient outcome for the world and for our focus countries in the material we have covered here in brief (Pugel, 2016.)

Sources cited:

·      FRB of Atlanta, 2016, Trade Dynamics and China, https://www.frbatlanta.org/economy-matters/2016/09/20/trade-dynamics-and-china-part-three

·      World Bank, 2014, Brazil vs. China: how to avoid an economic slowdown, http://www.worldbank.org/en/news/feature/2014/07/15/brasil-china-brics-exportaciones-desaceleracion-economia

·      Leahy, J., 2017, Business bets on Brazil economic rally, Financial Times, https://www.ft.com/content/ab46f7ec-e4d9-11e6-8405-9e5580d6e5fb

·      Londoño, E, Darlinton, S, 2018, Leftist Lion and Far-Right Provocateur Vie for Brazil Presidency, The New York Times, https://www.nytimes.com/2018/01/20/world/americas/brazil-lula-bolsonaro-election.html

·      Wetzel, D, 2013, Bolsa Famíia, World Bank, http://www.worldbank.org/en/news/opinion/2013/11/04/bolsa-familia-Brazil-quiet-revolution

·      Nation Master, 2018, http://www.nationmaster.com/country-info/compare/Brazil/United-States/Economy

·      Yu, R., 2017, U.S. – China trade scorecard, USA Today, https://www.usatoday.com/story/money/2017/04/04/united-states-china-trade-relations/99989116/

·       Pugel, T, 2016, International Economics 16th edition.

·      Index Mundi, United States Economy profile, 2018, https://www.indexmundi.com/united_states/economy_profile.html

·      Index Mundi, Brazil Economy profile, 2018, https://www.indexmundi.com/brazil/economy_profile.html

·      Index Mundi, China Economy profile, 2018, https://www.indexmundi.com/china/economy_profile.html

The international legal cost of carriage of goods, a courier economic fable

By: Rehtafeht Johannus Lihp , staff writer

The main costs associated with international law in relation to contractual relationships are tied to logistics and transportation of goods.  Transportation guidelines in CISG carrier contracts for goods cover shipment and transshipment and in-transit contracts.  It does not matter which contract type is used, for our purposes it is enough to know that the risk of loss will not pass from seller to buyer until the goods are identified to the contract or otherwise available at the buyer’s disposal.

Transportation costs vary upon several factors including the number intermediaries.

Fortunately, a similar procedure is followed whether transporting goods by truck, rail or air. Intermediaries involved in the transportation of goods include warehouse workers at customs houses and port authorities, ship crew, freight forwarders and stevedores.  A stevedore formerly was a term synonymous with longshoreman or dock worker, however since the shipping container revolution of the 1950s dockworker jobs were cut down to a 10th of pre-revolution employment level.  Currently stevedores refer to firms that contracts with ship owners or a port that charters ships or loads and unloads ships.  Formerly stevedores were answerable to the ships logistics masters, and now a term for the masters themselves (Maclachlan, 1875, p.387.)

Another complication factor impacting contractual law of international transportation is that of the insurance of goods under carriage.  Maritime law is a universe unto itself.  In maritime logistics contracting the parties choose who is responsible for the purchase of the maritime insurance and who is to benefit from it.  Due to risk of loss, both parties has significant interest in seeing that the goods are properly insured during the duration of the transportation process and from carrier to carrier, freight forwarder to freight forwarder.  Aircraft carriage of goods regulations functions similarly to maritime transportation, but aircraft carriage is regulated by the 1929 Warsaw Convention.  This convention was formerly known as the Convention for the Unification of Certain Rules Relating to International Carriage by Air, but then there weren’t enough words left to use in the convention itself (August, 2009, p.581,607,610.)

Sources:

  • Machlachlan, D., (1875), A treatise on the Law of Merchant Shipping
  • August, Mayer and Bixby, 2009

Research funded in part by the Organic World Trade Organization.