A Trump from the Donald
Kuching, Malaysian Borneo – Donald Trump, the current front runner for the Republican nomination according to this morning’s Borneo Post via the Associated Press, has blasted Barack Obama for not doing enough to have China adjust its currency. According to him and many others, the president should continue to apply pressure on Beijing to make the Renminbi more expensive.
The statements were made in Las Vegas, a GOP bastion, the site of the worst housing downturn in the world (the city beats out Iceland and Ireland combined) and the center for the Republican economic policy think tank. I checked the odds in both London and Vegas and it seems they are giving even money for a Trump-Palin ticket to emerge.
Now let’s take a more serious look to see what happens if The Donald’s policy succeeds. When I first moved here, one dollar purchased $3.60 Malaysian ringgit. Now, my one dollar will only purchase $2.98 Malaysian ringgit. Everything has gone up according to my buying power. Inflation has hit me in a big way.
The Donald and some economists want a more expensive Renminbi. This means if Wal Mart bought a shirt made in China and paid $1, it will now cost Wal Mart $1.50. The extra .50 will be passed on to you and me, the Wal Mart shopper. This means everything made in China will cost more, charged back to us and then inflation.
One need only walk through Wal Mart, Target or Home Depot to see how many items are made in China. New housing will be more expensive because most of the products used to build them come from China. Items from Southeast Asian countries will be more expensive because they purchase the components they use to assemble products from China.
Why does The Donald want to do this? He is in the hotel business. If the Chinese have more buying power, then they can stay at his international hotels longer, or he can charge higher prices.
Some people say that the stronger Chinese currency will help our industries back home and provide more jobs. This is because, they tell us, our products will be cheaper, and then the Chinese will buy them. If the Chinese buy more of our products, we will produce more which means more jobs.
The problem here is that some of the jobs are just down the road from me here in Borneo. They are also south in Indonesia, north in Vietnam, northwest in Thailand and northeast in the Philippines. I have toured many of the factories.
After inflation strikes and more businesses are forced to close because no one can afford their products, the only jobs left will be working in Donald Trump’s hotels serving coffee or Paris Hilton’s boutiques selling whatever she peddles. They will offer the bare minimum wage with no health insurance while they are doing their damndest to repeal the health care program for reasons I still can’t understand. The result will be inflation for the rest of us. The old adage is always true, the rich get richer…
As one who has suffered through a weakened U.S. dollar in a personal way, believe me, you don’t want any part of it. It takes more of my dollars to buy things now than it took a year ago. And it will take more of your dollars to buy things made in China if the Trumps in the states succeed.
For more articles from Tom see his blog at www.borneotom.com. He is also on Facebook at Borneo Tom.