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News Link • WAR: About that War

Trade Wars Lead to World Wars

• http://russia-insider.com, Paul Goncharoff

What does the future hold? For those that dig into and analyze the history of humankind there has been a repeating, almost natural progression from currency wars to trade wars to shooting wars. In basic terms, the yeast that gives rise to currency wars are: too much debt and too little growth. Hence, countries steal growth from trading partners by cheapening their currencies to promote exports and create export-related jobs. Short-term relief at best as in every case eventually currency balances reassert, it is therefore a zero-sum exercise. This no-win situation eventually becomes obvious to those countries involved and they move on to trade wars or in today's popular parlance - sanctions. This is expressed through punishing tariffs, export subsidies and nontariff impediments to free trade. The same dynamics apply as in currency wars and both sides null themselves out of play. Meanwhile the difficulties that started these chain of events has not gone away: too much debt and too little growth never goes away by avoiding the hard nationally responsible internal fixes needed – politically painful as they might be.

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