Gary > Will history repeat?
For what it's worth, not in my opinion.
Tariffs are a device used to protect local industry, similar to currency devaluation.
Normally, these would be methods used to bring about "balance" when a country is striving for a balance of payments or a trade balance. However, it is quite clear that the US is neither interested in nor can it bring about "balance" either in terms of paying off its debts or cutting back on its importing more than it produces. In fact, what we see today is that the rest of the world is being held to ransom by the US in a strange kind of game where the US has managed to convince the others (or maybe they convinced themselves) that it is to their advantage if the US lives beyond its means as long as it buys their goods.
Accordingly, I see no USD devaluation nor any attempt at import replacement by US industries. In fact, the present game will go on and on, the US debt will go up and up, US industries will more and more be relocated to areas of cheaper labor costs, the US taxpayer will be squeezed harder and harder and will get less and less for his efforts all the while listening to more and more BS about his freedom, and wonderful way of life etc etc.
And, of course, the war against terrorism will go on and on because, if it doesn't, Joe Soap and his brothers will wake up, wise up and overthrow their lovely government which put them into this nice mess. |
