Pls shed enlighen me on that, how does it create the currency war ?
right... and the actions of both governments benefit one group of people at the expense of another and yet netting a aggregate negative result... there is no value addition only destruction... you will see the political entrepreneur pander to special interest this way.. meanwhile the regular guys like me who don't have access to the special privileges granted by the government pay the price.. They treat the economy like a puppet.. one string on the money supply , another string on trade barriers, another on taxes... all destructionism... currency flight happens from all of these things.. taxes go up, money goes where it is best appreciated, away from high tax states... loose monetary easing, foreign buyers benefit from an increase in purchasing power at our expense, and inflation also redistributes from the first recievers of the money.. to the last recivers.. the fixed income and wage earners.. thirdly taxation is theft... Do you realize you work from 20 to 40 percent of your year for income taxes.. now compound that with your after income tax liabilites. .sales tax, luxury tax, tangible income, property etc etc.. just sales tax alone is a after income tax payment.. so if you get 70% of your money you earn you lose another 7% from that everytime you buy anything.. worse if you buy a boat or a so call luxury item... tax is like a daisy chain of dilution.. combine that with your loss of purchasing power from inflation and it would make you sickIf I tariff your goods coming into my country, and you decide to subsidize your producers to neutralize their lost profits, then it becomes a matter of who can afford to keep doing it.
right... and the actions of both governments benefit one group of people at the expense of another and yet netting a aggregate negative result... there is no value addition only destruction... you will see the political entrepreneur pander to special interest this way.. meanwhile the regular guys like me who don't have access to the special privileges granted by the government pay the price.. They treat the economy like a puppet.. one string on the money supply , another string on trade barriers, another on taxes... all destructionism... currency flight happens from all of these things.. taxes go up, money goes where it is best appreciated, away from high tax states... loose monetary easing, foreign buyers benefit from an increase in purchasing power at our expense, and inflation also redistributes from the first recievers of the money.. to the last recivers.. the fixed income and wage earners.. thirdly taxation is theft... Do you realize you work from 20 to 40 percent of your year for income taxes.. now compound that with your after income tax liabilites. .sales tax, luxury tax, tangible income, property etc etc.. just sales tax alone is a after income tax payment.. so if you get 70% of your money you earn you lose another 7% from that everytime you buy anything.. worse if you buy a boat or a so call luxury item... tax is like a daisy chain of dilution.. combine that with your loss of purchasing power from inflation and it would make you sick
Although I do understand your point, the current action (e.g. tariff, interest rate rise etc) by US govt is to get an aggregate positive result in the long run - to encourage outsourcing companies to create more jobs in US and to slow down the rapidly growing economy to prevent bubbles etc so on. Raising interest rate will lower inflation too.
Soon we will find out but with Trump, I only see positive outlook in US economy.
But what happens if another country subsidizes foreign employers just enough to completely undo the tariff? As soon as I say "sending jobs overseas will cost you an extra dollar" you say "we'll subsidize you a dollar if you employ over here." Then it just comes down to who has more currency to throw at it.
You need to think of the long term effect. The short term negative effect is inevitable.
You can google or watch youtube on J-curve effect which explains the long term benefit over the short term loss
The benefit is the short term.. the long term is the negative. People who like to fittle with the puppet strings or economitrians are just the ones that come up with what seems like complicated curves and such to allow the entrprenuring politicians to intervene
The effect will more likely to trigger a trade war (more likely policy involved) than currency war. With tariff effect, I don't see a currency war.