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Tuesday, December 21, 2010

Financial Implications of Free Trade (1) --- No Tariffs

Hello,



1) One of the main topics of Crisis to Profit is globalization.

2) Globalization is the process of the world becoming increasingly unified.

3) An excellent way to grasp the essential meaning of globalization is to consider the internet.   The internet is growing at an incredible rate, is it not?   As the internet is growing, information of all kinds and qualities can be transferred at the speed of of a click and with the ease of a having a thought.   The simple fact you are reading these words is due to the fact that the you are investing in the rich profit-abilities of the internet, therefore, you are likely to bank on the shocking success of the internet with corresponding success in you life.

4) It seems that computers, the internet, blogs and websites such as --- Youtube, Google, Ebay and yahoo.com are uniting our world.   The internet presently appears to be a seminal component in the evolution of globalization.

5) How does globalization affect the financial market?   Free trade.

6) As globalization is advancing, nations of the world are developing free trade agreements, which facilitate commerce between these nations by establishing various joint ventures in marketing, increased business between these nations rather than with nations outside of the agreement and the reduction or elimination of tariffs.

7) Many spirited individuals are particularly interested in the provisions of free trade agreements, which reduce or eliminate tariffs.   Tariffs are the taxes that nations levy on imports or exports.   In simple terms, tariffs are taxes that nations charge for trading with another nation.

8) Tariffs can be vitally important to supporting national freedom through financial self-sufficiency, because tariffs are a significant way for nations to earn money for doing business.

9) When nations ink their free trade agreements, tariffs tend to drop and thus, those revenue streams drop for those nations.   There is a possibility that as nations limit their income from tariffs and thus, limit their ability to earn income, their riches decrease, their standard of living can decrease and correspondingly, their dependence on loans and creating excess money can increase.   In a nutshell, analogous to a multinational corporation selling to certain buyers at a wholesale price, the nation is cutting their profits in exchange for the opportunity to purchase from these buyers at a lesser price.

10) Free trade can facilitate the transfer of goods and services, which means that, for example, since Canada, the US and Mexico signed their North American Free Trade Agreement (NAFTA), these nations limit their income from trading with each other, however, they can transfer goods and services more easily, for less money --- thus, food (corn), industrial tools (silver) and workers (lower wage) are transferred with increasing frequency and volume.

11) What can happen with free trade agreements is that the money component is lessened, emphasizing the trade component, coming closer to barter.   It seems there may be not be many significant counterproductive effects of free trade, furthermore, there is one issue, which may prove to be financially self-destructive in the long term.   As nations facilitate trade, yet limit their revenues, there is a possibility that these nations are becoming increasingly impoverished.   Monetary poverty may not be a serious concern if goods and services are still moving freely, however, if one nation or organization is able to hoard or 'corner the market' on money, then when these nations do need money they could be reduced to begging or borrowing at suicidal rates simply to cover their maintenance costs.

12) In summary, an example of advancing globalization, the unifying of or world, is the increasing incidences and influence of free trade agreements.   Free trade agreements allow nations to trade with each other with greater frequency and volume, thereby manifesting a mutual benefit.   A typical provision in these free trade agreements is the reduction or elimination of tariffs, which are the taxes that nations charge for trading with other nations.   Tariffs can serve as a significant source of income and if tariffs are reduced or eliminated, then nations are reducing their income.   As nations reduce their income, they may be risking a decrease in financial self-sufficiency, an increase in international dependence and a decrease in a self-determined national identity.

13) As the US continues to lose money to free trade with Canada and Mexico, due to their free trade agreement --- NAFTA, this nation is dropping deeper into its fundamental rebirth and affording sophisticated investors and informed souls to transmute the US Crisis to Profit.


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