Trump’s Tariff – A Joke
Trump Needs to Know US is getting everything Free by Giving Papers/Dollars
According to economist Allan H. Meltzer at Carnegie Mellon University (“U.S. Trade Deficit Hangs In a Delicate Imbalance,” Paul Blustein, Washington Post, November 19, 2005): “ We [United States] get cheap goods in exchange for pieces of paper, which we can print at a great rate”.
When the US buys $100 billion worth of goods from China, it gives papers (i.e. $100 billion dollars) to China and gets all the goods. Do you know what China does with these papers/dollars? It is deposited in the US as investment. Hence the US is getting everything nearly free.
But if India has to buy from the US, it has to earn the same paper, i.e. US dollars to pay for the US items as the Indian government cannot print the US dollars.
Hence do not you think that talk of tariffs by President Trump is a joke!!! In layman terms, Trump not only wants everything free but also wants some extra money for selling in the US which is like goons collecting hafta money, protection money paid to gangsters. He also threatens that if others create a global currency, other than the US dollar, he would impose a 100% tariff on the users of the new currency.
In fact, the trading partners of the US should impose tariffs on the US.
From last thousands of years till the 1757, i.e. Battle of Plassey, European, East Asian and Middle East traders had to bring bullions (gold and silver) to trade with Indians for cotton and silk goods. Accumulation of these massive bullions made Indian households rich which gave the name India the Golden Bird (“Sone Ki Chidiya”).
According to Angus Maddison, an economic historian, India was the world’s leading economic power from the year 0 to 1000. Two thousand years ago India was the world’s largest economy with a 32.9 percent share of the worldwide GDP and 28.9 percent in the eleventh century, closely followed by China. In 1700, when most parts of India were ruled by Mughals, India had a 24.4 percent world GDP share, higher than Europe’s 23.3 percent. In 1700, China was ruled by the Qing dynasty and had about one-fourth of the world GDP. But their respective shares dropped to less than 5 percent by 1950 (“India to reclaim Mughal-age economic aura,” PTI (India), August 26, 2008).
Before the Mughal dynasty, there were some Muslim invaders who were said to carry “very great” booty once they left India but still the country had enough wealth to be called “Sone Ki Chidiya”. In 1526 A.D. came the Mogul invasion by Babar. Babar, however, came to stay and die in India. For the first time, it was the British who looted the country and carried nearly all the wealth with them to Britain in their two century occupation to make India dirt poor in the world.
British Empire lasted for 2 Centuries and as discussed in my book Re-Evaluating Gandhi: How he delayed Independence and mainstreamed radical Islam, Netaji Subash Chandra Bose (although he and his army got defeated badly on battlefields) was the main force behind the collapse of the British Empire as latter was using the massive Indian Army to impose its will all over the world.
Towards the end of World War II, the US forced the European countries to accept its currency dollar as global currency by forcing them to sign the 1944 Bretton Woods Accord [at that time Europeans needed the US for liberating them from Germany and also huge money for Europe’s reconstruction. Also the majority of other countries were under their colonial rulers]. We have been living in the American Economic Empire since then. But now we are witnessing the collapse of the US economy due to both implosion (from within) and explosion (due to external threats) of the US dollar.
But, no Colonial Rule Lasts Forever.
Had US dollar not been the global currency, I, Satya Nadella (of Microsoft) and India Nooyi (ex-CEO of Pepsi) would not have been in US – we are in US because of 84:1 (Indian currency to USD ratio)- this ratio is increasing year after year because India has trade deficit. The US has a massive trade deficit but it just prints papers and gives to everyone and then these papers come back as investments in trillions a year. Following data do not involve home real estate, corporate real estate, golf courses, hotels, and several other investments by foreigners and foreign government organizations.
When an Indian in the US sends $1000 to his family member in India, effectively it remains with the US custody and not with India. The Indian bank converts $1000 into equivalent rupees at that time and gives it to his family member. Right now, a significant portion of $650 billion India’s FOREX is in US dollars. US can seize these many dollars from India – US did the same with Iran in 2018 and with Russia in 2022. Hence every major country is afraid of the US.
The US-style Capitalism is based on Dollar-Ponzi Scheme and hence it is not valid for any other country at all. Capitalism in the US would have collapsed in the mid-1980s when the US interest rate was in double-digits and the US had to force other G-7 countries (who were dependent on the former for defense against the Soviet Union) to sign the 1985 Plaza Accord. The 1985 Plaza Accord rescued the US dollar and the US economy but caused two Lost Decades of Japanese Economy because it was mainly Japan which funded the US.
To some extent millionaires and billionaires are something like modern-day Zamindars of the British Rule in India, created by share markets of the US-style Capitalism which people would realize once US economy would collapse like the House of Cards after the US dollar loses the global currency status which would lead to complete collapse of share markets globally, leading to global economic depression which would dwarf the 1930s Great Depression.
Therefore, the global economy urgently needs a new socio-economic theory which would be valid for the next several centuries and the Modi administration needs to work on it by consulting other large global economies.
[Dr. Susmit Kumar obtained his Ph.D. from Pennsylvania State University, US. Before coming to the United States, he was selected for the Indian Administrative Service (IAS) and did its training at the Lal Bahadur Shastri National Academy of Administration (LBSNAA), Mussoorie, India (August 1985-March 1986).
Dr. Kumar is the author of Re-Evaluating Gandhi: How he delayed Independence and mainstreamed radical Islam (512 pages, 785 Endnotes, 2023); India is a Country, Not a Company: How US ‘Imported’ Economists Misled & Mismanaged Indian Economy | (2nd Edition) (300 Pages, 2024, 110 Tables and Charts to analyze global economy) and The Modernization of Islam and the Creation of a Multipolar World Order (2008); Karma, Mind and Quest for Happiness (2nd Edition, 2023, 100 Pages, both English and Hindi available)].
