02.24.13 AEP: Here Come’s the Trade War

 

by John Galt
February 24, 2013 16:15 ET

 

The economic landscape continues to evolve within this manipulated market realm under the guise of capitalism yet few commentators beyond Rick Santelli at CNBC and Ambrose Evans-Pritchard of the U.K. Telegraph are willing to step outside the accepted norm and offer blunt commentary about the upcoming risks and eventual conclusion of the great Ponzi scheme concocted by the world’s central banks. Tonight’s edition from AEP is no exception:

Trade protectionism looms next as central banks exhaust QE

Why does this 1930’s so-called pre-war practice suddenly rear its head in today’s U.K. Telegraph? From AEP’s article linked above:

Professor Michael Pettis from Beijing University argues in a new book — “The Great Rebalancing: Trade, Conflict, and the Perillous Road Ahead” – that the global trauma of the last five years is a trade conflict masquerading as a debt crisis.

There is too much industrial plant in the world, and too little demand to soak up supply, like the 1930s. China is distorting the global system by running investment near 50pc of GDP, and compressing consumption to 35pc. Nothing like this has been seen before in modern times.

In other words, the archaic concepts of supply and demand along with the old business cycle are beginning to rear their ugly heads finally in this crony quasi-Marxist economic structure and in the end, every nation will have to start engaging in protectionism to guarantee that each nation’s economy continues to function as it does now; even if it means maintaining a stagnant status quo.

Sadly for the world, every major trade war ends in tears with a world war and this time, there is a bit more permanence to the threat of a major conflict lasting for possibly decades to sacrifice an adequate number of she

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