The Globalized Economy, The Forex Markets, Fiscal Policies, The Fiat US Dollar and Small Governments Under a World Reserve Currency System – November 26, 2023

The Global economy accelerated during the Ronald Reagan administration, and one of the main reasons this happened was the relationship between Ronald Reagan and the Federal Reserve.

The Federal Reserve during the Reagan administration actually fought inflation, and Reagan, although not perfect, shrunk the size of government while also VOCALLY cheerleading for a smaller government, which made Reagan a cultural phenomenon.

One of the main problems in the modern era of being a Republican or Conservative is that you’re told to tame it down, don’t say this or that, because you might offend people on the Socialist Left.

 

 

Even though the Socialist Left is very divisive, the Conservative Right is allowed to be framed by the media as evil, greedy monsters who should be eradicated because of their beliefs.

The media is able to do this primarily because of the TIMID Conservative politicians, which even in this era include Donald Trump. Donald Trump, unlike Reagan, is a VOCAL supporter of the welfare State, often saying out loud that he will protect Social Security and Medicare.

This is actually a FAR LEFT position and guarantees that Donald Trump, who often cheerleads the stock market, will GROW the swamp he always claims he will drain.

What is FISCAL policy?

In economics and political science, fiscal policy is the use of government revenue collection and expenditure to influence a country’s economy.

The one benefit Donald Trump does have in the modern era is globalization; the U.S. dollar is now king of fiat currencies, which equates to the world now playing a game of who has the best FISCAL policies in the world.

Now that the U.S. dollar has been crowned king of fiat currencies, investors are basically going fiscal policy shopping all over the world, using the U.S. dollar as their basis for VALUE.

The U.S. dollar is basically the preferred choice for PRIVATE banks, and depending on the PRICE or cost to start and maintain a business in any country, investors can decide which country is best for them to plow their capital into.

Now, just because a country has great fiscal policies doesn’t necessarily mean it’s a great place to invest in everything. For example, some Conservative countries have a lot of LAZY people who don’t want to do labor-intensive jobs without proper compensation.

This why for some countries, Sudi Arabia comes to mind, import a lot of CHEAP labour to do the labor-intensive jobs for them. So for myself, even when I see a country like Argentina vote for a Conservative politician, that doesn’t always translate into value for investors because if the culture is such that locals start bidding up prices in U.S. dollars, even without the levers of government, and the people may also be hostile to immigrants taking jobs, which is quite common in Latin American countries.

It’s not a guarantee that there will be value in every sector of the economy; however, on the flip side, their countries’ purchasing power could bid up prices, and the locals can now IMPORT more items from countries that have a harder working population. As Thomas Sowell always says, there aren’t solutions, only tradeoffs. Yes Capitalism is the superior model, but you should also be aware of why a lot of people lean towards socialism.

Leftists sell socialism as a 1 size fits all, and if socialism infects the culture, it’s very hard to get rid of, as people of lower financial and economic intelligence will seek to find what they imagine are EASIER answers or quick fixes to problems in life that require hard work.

We are now POTENTIALLY entering into a phase that I’ve labeled LATE STAGE SOCIALISM; during this cycle, you’re getting more and more people who are comprehending that the problem is FISCAL policies; now, where the challenge comes in is how to deal with that, with an ignorant population. The countries that figure this out the fastest will likely have the best economies in the world in the future.

Interesting times ahead!