8 ms·
Ok. Let me put it down as points. I am figuring this out as I type: 1. There is a fixed exchange rate for every currency. 2. Trade is conducted with this fixe
by jelliclesfarm 6y ago
Ok. Let me put it down as points. I am figuring this out as I type:
1. There is a fixed exchange rate for every currency.
2. Trade is conducted with this fixed exchange rate.
3. There is also a floating rate for the currency which means that it is strong or weak depending on GDP, economy etc.
4. OTOH, there are local economies. For cities inside the USA. Why should trade of soy and hogs with China affect the rent paid by a retiree in small town America?
5. Many pension funds invest in companies listed on Wall Street, but when dispersed, it is used for exchange of goods for money in high streets and local economies.
6. Can not a local economy be separate from traded currency? This would create a barter like economy.
7. Padding an economy from future shocks is easier if local economy is divorced from trade economy.
Thoughts?
- alexmingoia 6y agoI’m not sure why you seem to think international trade is bad? You can’t prevent international trade from affecting domestic trade by using separate currencies. Goods traded internationally are produced domestically. You can definitely outlaw international trade, but this would reduce wealth and productive capacity by reducing access to capital goods. Just look at any country that has been isolated from international trade through embargo (Iran, Cuba, Myanmar, North Korea, etc.). What reasoning leads you to believe importing soy from China drives up rent prices for retirees?
- jelliclesfarm 6y agoI don’t think international trade is bad. That’s not what I meant. I will try to articulate better in another comment soon.