Hard currency gained by exporting junk is building the world’s greatest super power
Everyone knows that pretty much everything is made in China these days. This subject, including the massive trade deficit, was addressed on NPR the other day. The NPR reporter and an “expert” from a Washington think tank went on and on about all of the wonderful goods we are getting cheaply from China. At the very end of the piece, the reporter asked the expert, “We’ll what do they get?”
The reporter replied, “Well, they get our currency.” He’s correct, but he made is sound as if though our “currency” is worthless. That is, he made it sound like we’re getting billions and billions of dollars of goods, and all they get is our currency which isn’t a big deal. This made me so mad I yelled at the radio: IDIOT!
So let’s think about this. What is “currency?” Currency is most commonly associated with money, and you can read about the details here. But what most people don’t realize is that currency is: a demand on our assets. That is, currency is used to buy our assets. Our assets include our country; that is, the real estate, entities, and pretty much everything that make our country, The United States of America. In fact, buy the time you finish reading this, the Chinese will use the American currency to buy more than 100,000 acres of land.
Once, a guy named Donald Trump hosted a show called “What is America worth?” By the end of the show he estimated that America, including it’s people, is worth $300 Trillion (https://www.youtube.com/watch?v=8mOYG0ZI4Fc). This may seem like a lot of money, but we’re talking about EVERYTHING, every piece of land, every building, every company, and even the value of the people!
So let’s review something an average person in Shanghai understands, but NPR’s expert in Washington is oblivious to,
1. The Chinese export Billions and Billions of dollars of goods to the US. This is not offset by the same trade going the other way. That is, they get our currency, but we don’t get theirs.
2. Now, we have their goods, and they have our currency. But the goods are cheap, and don’t last long. After a year, many of those goods are in the trash.
3. Now, we have their goods in our landfills and they have our currency. They use the currency to buy US Debt and US real estate.
4. The process repeats and repeats, currently at the rate of about $500 Billion/year. (Remember the entire USA is only worth $300 Trillion according to the now president, Donald Trump.
5. Ultimately, they own all of our country (assets), and we own landfills full of junk.
For think tanks in Washington that still don’t get it, let’s make this super simple:
They use the currency to buy the USA (Real estate, Debt)
The cheap goods break and go in the trash
We pay more currency for more cheap goods
Repeat this process a few billion times a month
The Chinese Own America Americans own the junk in the landfill
Sound far to you?