Could we envision the gross domestic product numbers soaring to new heights? Could we even imagine an honestly reported unemployment rate below 2%? Is this a mere dream given the current state of industrial production?
Perhaps there is a solution to the daunting challenges facing our country. Americans have overcome before. Why can't it happen again?
In this page, I'll present a solution put forth by Hugo Salinas Price. He is the founder of the Elektra retail chain in Mexico. He is now retired after a very successful career and has turned his attention to trying to initiate positive reforms in the financial sector of Mexico. As you can imagine, he gets plenty of resistance. Good ideas often do.
Hugo Salinas Price is keenly aware of the financial calamity that is going on in America as well. He offers a plan that may seem outrageous at first. Maybe it will take two reads to catch all of it. I'll put it out there for you because it does have some merit. It will also get massive resistance from the entrenched political parties that need the current system intact to maintain their lifestyles.
He has a fascinating description of how the balance of trade between nations around the world was forever changed by the United States decision during the Nixon era to get off the gold standard.
In that explanation he also cites the huge increase in available credit that blossomed when gold was removed as the "backer" of money and instead replaced by fiat currency.
And he describes in incredible detail how that decision led to the steady downturn in American manufacturing. It's an angle I hadn't considered, but it fits in exactly with the wisdom we gleaned from some of the authors featured in our list of classic books.
I'll start off with some questions posed to Hugo Salinas Price and the answers he provided. Later on in this page I'll add a link with some remarkable insight from this manufacturing expert.
Here it is... I quoted him exactly on parts of this page.
"The United States will only accept just as much imports from foreign countries, as foreign countries are willing to purchase from the U.S." He stresses that the U.S. must not place tariffs on imports. In simple terms, a tariff is a tax imposed on a country seeking to sell their products on our soil.
Which brings on this question...
The U.S. should not just import what it wants and pay for them with U.S. dollars?
"That is exactly what I am saying. Because you see if you pay in dollars there is no need for local industries in the U.S. They are not needed and in fact have disappeared because imports can be paid with dollars. What do you want; lots of Asian imports available at WalMart, but no jobs and what jobs there are-at tattoo parlors and restaurants paying miserable wages? Or do you want industries which will employ workers, paying higher wages and pay taxes to your government as well?"
He points out that since 1971 the U.S. has no need to trade imports for exports made by American industry. So industry began to dry up. Exports became unnecessary. We remember that Richard Nixon took the U.S. fully off the gold standard in 1971. Fiat currency took hold.
This is great for China and Asia, but the result in America is a staggering unemployment rate and 47 million people on food stamps. Gross domestic product figures that are flat lined at best. In terms of closed plants, a disaster.
So far he has nailed our situation. So what is his solution? Get ready for this. It would be simple but for sure painful for a while. This might be a good time to read a complete explanation from Hugo Salinas Price before going on to the next part.
"Gold must return to the monetary system of the United States. And the United States declares that..."
"1. U.S. will pay for all imports with American made goods or services or with gold.
2. U.S. will provisionally institute a re-industrialization of the U.S.A. with a gold price of $10,000 an ounce.
3. Exporters to the U.S. will have their choice:
a. Take their payment in U.S. goods or services.
b. Take their payment in gold at $10,000 per ounce.
4. The U.S. will not attempt to reduce the flow of imports by means of tariffs. "
His definition of the gold price...
a. As long as gold continues to leave the country instead of domestic goods or services, the price of gold will go up until the tide turns. This will happen when foreigners value American made products more than gold.
b. If gold pours into America, then the price of gold in dollars is too high and American exports are too cheap. Gold prices would be trimmed down until there was virtually no movement. American exports would be paying for most of the imports coming to our country. Gross domestic product numbers would truly be showing the direction of our country.
He finishes by asking what is more important...
The U.S. returning as a manufacturing dynasty that employs millions of Americans with gross domestic product numbers off the charts? Or keeping this bankrupt, corrupt financial system in place?
Do we want an America that is alive and prospering? Or do we want this current situation that is precarious at best? We learned from the page about Jekyll Island that since 1913, the plan was set in motion for a group of big banks to control the money supply.
I know that there are plenty of questions in this plan as well as plenty to think about. But it does rely on basic manufacturing and a return to gross domestic product driving the economy rather than consumer spending. The current political economy is a failure.
It also might cause you to re-consider the value in versatile silver. As I suggested in our page about a possible dollar collapse, there is no guarantee that the world will continue to accept our fiat currency. There isn't a better option yet. But it is a dangerous gamble to assume there could never be another option.
If you consider the message of this page in conjunction with what we've learned from Peter Schiff, Robert Kiyosaki, Harry Dent and Mike Maloney, you'll see a common thread.
Peter and Andrew Schiff touched on this problem in their amazing book, "How An Economy Grows and Why It Crashes."
Could a bold initiative be necessary to elevate our gross domestic product numbers as compared to what we buy from other countries?