Monday, March 22, 2010

Where is it all coming from.

A legitimate question, the United States, Canada[1], China[2] and the EU[3] are all experiencing trade deficits. Let me repeat that for you: Canada one of the most notorious abusers and exporters of natural resources and China the stereotypical hotbed of manufacturing are experiencing trade deficits.

If we're all buying things faster than we're selling them (on an international stage) who is doing the opposite?

Well the answer is three fold but never the less fairly simply. Oil, consumer electronics and cars have been, are, and continue to be the driving forces behind trade. The United States imports all three, China imports oil and cars, Canada imports Cars and consumer electronics and the EU imports oil and consumer electronics.

Meanwhile Japan, Saudi, Russia, UAE Singapore and others are happy enough to supply. You are seeing an extradition of wealth from first world (and soon to be first world) countries on an unprecedented level. The results of which will ultimately boil down to two things:
  1. A more equal distribution of wealth and greater international fiscal equality.
  2. A ceaseless flood of money from the first world will finance extremism and terrorism in unstable countries around the world. Ultimately fueling a 'war' targeted at its very financiers.



2 comments:

  1. Darn you for making me learn something today.

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  2. When I read this a second time, I realized how cool it was. Thanks for the enlightenment. Now more posts!

    ReplyDelete