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Trade Deficit, Devaluation of the Dollar and Globalism
by Mike Crane

The February 2007 Trade statistics were released on April 13 and remain at a very high level, although better than this time last year.

The chart at the right is taken - month by month - from the U.S. Bureau of Economic Analysis monthly press releases. These are just the numbers reported by the government. A copy and link to the most recent BEA press release is always at the bottom of the page.

This remains a track record of failed economic policies, which apparently are continuing unabated. While most of the new age rocket scientists - economists - are making a big deal about the drop to a monthly international trade deficit of only $58,400,000,000.00 dollars - the Southern Party still contends this is unacceptable.

This month we will look again at devaluation of the Dollar. We discussed this topic last month, but the decline in the value of the Dollar has been dramatic and this is worth revisiting.

Devaluation of the Dollar

When we use these greenbacks, they are of course equal to 100 pennies, 20 nickels, 10 dimes, 4 quarters and every once in a while 2 half dollars - or some combination. So variations in the Dollar's real worth are not always apparent and obvious.

It is only when you compare what you can buy with a dollar that the real worth or value can be observed. At one time, the Dollar was backed by gold or silver and thus had a fixed value. Today that is no longer true. A silver dollar a few decades ago was worth 1 Dollar, today it is worth 13 of our new federal reserve notes. The Dollar is only backed by the faith and credit of the world's largest debtor nation. Your government, that you pay for and elect, is the world's largest debtor nation.

So one way to look at the relative value of a dollar is to compare it with the currencies of other countries. Our government (and specifically President Bush) tell us that our national policy is a "Strong Dollar!" But don't single out President Bush, so did the Clinton Administration.

Take a look at a chart (on right)  that shows the value of the Dollar against other leading currencies around the world.

So we have a government, publicly telling us that their policy is a "Strong Dollar" while at the same time implementing policies that have resulted in an ever weaker dollar in international trade.

It should be obvious that we have a case of "watch what we do, not what we say."

Aside from the dubious policy of not being honest with its citizens, the long term impact of a continuing slide in the international value of the Dollar can be very negative.

A weak dollar in relation to other countries currency actually increases the cost of imports. As the ever increasing budget and trade deficits continue to erode the value of the Dollar, your "cheap" imports will rise in cost.

Lets look at what has happened to the Dollar during the last few months. The chart on the left is the last few months of the exchange rate between the Dollar and the Euro. It should be fairly obvious that the Dollar is falling in value against the Euro (click on image for full sized graph).

Once again, your government, that you pay for, tells you that our policy is a "Strong" Dollar! But in fact the policies of your government, that you pay for and elect, have been and still are promoting economic polices that generate a weaker Dollar.

For the doubting Thomases, lets also do the same comparison with the Indian Rupee. The chart on the right (click on image for full sized graph) is the same period comparing the Dollar with the Indian Rupee. As should be obvious it is moving in the wrong direction also . Down!

Entire industries and the manufacture of entire product lines have moved to foreign countries. As long as the Dollar falls in value - you are facing a long period of increasing costs!

For the doubting Thomases:

For one month, make an effort to buy items made in our country. Make a list of those that you can not find an American made version.

In the future, every one of those foreign made items, those imports, are going to cost more, as the Dollar continues its slide.

The multi-national corporations don't care, they get to use virtually "slave labor" where ever it is the "cheapest," and you will get to pay the going currency exchange rate or do without.

In the meantime, the moving of facilities to foreign countries, the outsourcing of American jobs, the selling of American jobs via H-1B visas, the importation of illegal immigrants - all to provide "cheap labor" create enormous "social expenses" which are paid either by your tax dollars or are placed on the government's credit card in your name, increasing our debt.

The erosion of the international value of the Dollar is simply a transfer of the wealth built by our ancestors and previous generations to the elite few and the rest of the world.

The International Devaluation of the Dollar and continued movement of entire industries and product lines to foreign countries are just repeated small steps in the march to globalization.

What is Globalization?

Lets look at what his idea of globalization means to you, your children and grandchildren. The following is in approximate numbers and only looks at the impact of a true global economy between our country and India. The impact is of course greater when you factor in the entire world.

Globalization: The Politicians pitch: Free Market forces will eventually solve the problem. Rising incomes in foreign countries will stabilize the situation.

Explanation:  Using some round representative numbers (references at bottom):

US population 300 Million, Average per capita income - $33,000 per year

India population 1 Billion, average per capita income - $472.00 per year.

Equalized income between US and India - $7,978.00 per year.

What that means to you: Average American income will fall dramatically.

If we achieve globalization - if the current economic policies are maintained the American average per capita income will have to fall to roughly $7,978.00 per year - for the per capita income in India and the US to equalize.

Effect on your grandchildren: You are condemning your future generations to live on the equivalent of roughly $8,000.00 current dollars.

Ladies & Gentlemen, this is what we are leaving our children and grandchildren if globalization continues unabated.

Except it is actually worse than the above example indicates. That example only considers the population of India, globalization carried out would include not 1 Billion people as in the above example, but would include somewhere around 5 Billion.

Is this what you voted for? Well it is what you are getting and it is brought to you by both the Republican and Democratic Parties leadership!

The Trade Deficit and the International Devaluation of the Dollar are just two pieces of a complicated picture and our elected officials depend on the picture being so complicated that the citizens of our country will not realize what globalization really means.

You do not hear this from either of the major parties because they are addicted to the contributions of the proponents of globalization known as campaign contributions.

What a corporate dream, everybody working for poverty wages - except the elite few! What a dismal future for your future generations.

Warren Buffett - hardly a Southern Party member - has come to the same conclusion:

Instead of moving toward an "ownership society," Buffett suggested, with admitted hyperbole, that the economic burden ahead is more likely to result in a "sharecropper's society" dependent on foreign landlords.

Step by step you are marching toward globalization. Step by step - your grandchildren's future is being sold on the auction block of special interest influence. Before "political correctness" it would have been called by its real names - "corruption" and "fiscal irresponsibly."

It is up to you - the American citizen to decide how long - you - are going to let it continue. The most recent 109th Session of Congress passed three more Expensive Trade Agreements - CAFTA, Oman and Bahrain. More are in the works for the 110th Session, including South Korea.

What you can do.

If you are concerned about these economic policies, at some point you need to ask yourself the question, "what am I going to do about it?" Go back and look at either the chart at the top or other graphs. There can be very little question what the trend is and what you can expect if something is not changed.

Are you concerned enough to consider some things that you can very easily do to begin raising awareness of the future problems? If so please consider:

1) We need your help in passing this information on to others. How many people do you know that would be concerned or interested? If everybody that reads this page - finds one new person a month, in two years we could retire every US House Representative or US Senator up for election across the country that is selling your grandchildren's future. That is a lot of results for very little effort. Last month the list receiving these updates only grew by just over 120, perhaps too many were relying on the other person to find their new person or only 8% are concerned.

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2) Take a few minutes and read the Southern Party of Georgia position on FAIR Trade as opposed to our government's policy of Expensive Trade. If you do not understand the position or want to discuss contact the author of this article, mikecrane@tds.net . If you support such a policy, ask your Congressional Representative and US Senators if they will support it. If they say no, throw the bums out of office next election and get someone who will.

(See: A Southern Party of Georgia Position on solving our country’s Trade Deficit).

3) Consider joining the Southern Party of Georgia or one of the Southern Parties springing up in other States (Southern Party of North Carolina and Southern Party of Mississippi) and helping our efforts to expose the dangers of creeping globalism.

Southern Party of Georgia
725 Ridgeview Road
Morganton, Georgia 30560

Credit card contributions can be made at 877-903-0996.

Paypal contributions: chairman@spofga.org

Georgia Campaign Finance Reporting requires we ask for your name, address, occupation and employer.

These are simple steps, require very little effort and even the financial request is not a burden. When Republicans and Democrats call you (they can afford telemarketing, many cases using call centers in India to help stabilize salaries in India while they fall in our country) they ask for much more. We need your help more than they do and when you help Republicans and Democrats you get creeping globalism thrown in for free.

“Nobody made a greater mistake than he who did nothing
because he could only do a little.”
― Edmund Burke (1729 - 1797)

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References for per capita income:

US per capita income (2004): Reference  http://www.vtlmi.info/pcivt.htm

India per capita income (2004) is 20,989 Rupee (see: http://timesofindia.indiatimes.com/articleshow/1009693.cms). Using the Dollar <-> Rupee currency conversion rate of March 10, 2006 (.02249), this is $472.00 per year per year.

Methodology - Multiply population estimates by per capita income for both countries, add the total income and divide by combined population.

US - 300,000,000 people x $33,000.00 = $9,900,000,000,000
India - 1,000,000,000 people x $472.00 = $472,000,000,000
Total = $10,372,000,000,000 divided by 1,300,000,000 people
Result = $7,978.46

About the author:

Mike Crane is the 2nd vice chairman of the Southern Party of Georgia and a candidate for the 51st Senate District in Georgia. Despite gathering over 7,000 petition signatures in 2004 and 2006 combined was denied ballot access both elections.  While 70% of the Georgia State House districts and 56% of Georgia Senate districts had one candidate in November, Georgia tax dollars are used to prevent political competition. The time has come to end Banana Republican style elections in Georgia!