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: