Short Thought: Can Labor Cost And Related Costs Speed Up Automation And Artificial Intelligence To Out Compete Competitors?

Here are few sentences that I want to express in short thought on the matter of automation/AI.  I think labor cost and other costs that impose on innovation, manufacturing, and whatnot would speed up automation and artificial intelligence a great deal, because countries such as the United States would like to outdo countries such as China in term of trade and other economic factors.  For your information, I think as now China still has labor cost advantage over the United States.  I see though that the United States could try really hard to push for automation and artificial intelligence, because in this way the United States can gain a competitive edge in trade such as in labor cost and whatnot.  Nonetheless, if I’m China, I would do the same, and this vicious cycle would only speed up automation and artificial intelligence.  I don’t have a crystal ball, but I think we may live in the future sooner than we would have like or prepare for.  Furthermore, automation and artificial intelligence will only increase job losses, but it will take a much longer time for people to find new jobs.  After all, getting a new job in a totally different field requires retraining and relearn.  Before you know it, the whole world will try to push for automation and artificial intelligence.  It’s coming sooner than you think!

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What Will Happen If The World Uses One World Currency?

What will happen if the whole world is going to use the same currency?  Imagine if the whole world only has one currency, the economy would behave rather differently than how it is now.  Currency war would be history.  Trade war through currency manipulation might not be easily executed as now.  Is it really that positive to have one world currency?  If you’re reading on, you might see that I’m not so sure about this idea.  Nonetheless, the idea is interesting and provocative.

Saying is easy, but having one currency for the whole world would be difficult.  Our world is made of countries with histories and sovereignties.  Thus, each country has its own financial and currency systems.  Except the Eurozone member states, most countries are able in printing their own currency for whatever purposes.  Since each country is being ruled by a specific umbrella system that supports the financial and currency systems, and so it’s rather difficult to have any country in such situation to give up their right to print their own currency.

Nonetheless, let’s say the whole world gets together and decides to have one currency for all countries in the world, the question is how one world currency system would behave?  Perhaps, it’s like a democracy, because each country should have the right amount of currency printing privilege in percentage quota.  The world could use the population size of a country to determine how much percentage quota for the right to printing the one world currency a country should have.

The idea of one world currency is just too radical, because nothing like this has ever happened in the human recorded history.  Since this is too radical and has never happened before, I don’t think anyone is clever enough to see the consequences if one world currency is actually taking place.

My suggestion — if this scenario takes place, the country’s population size should determine the percentage quota of right to printing the one world currency — is having many flaws.  On the top of my head, a flaw of this suggestion is noticeable in regarding to how a country should prioritize their policies, because the larger the population size the bigger the percentage quota would be for printing the one world currency.  In a competitive world with one currency, poverty might be increasing instead of decreasing.  If a country decides to make policies that encourage population growth but without policies to help keep the population stays competitive in the world market, it’s a disaster in the making since bigger population means more mouths to feed.  In one world currency system, wrong prioritization of policies can encourage a disaster on a very large scale.

I think there are positives and negatives in regarding to have one world currency.  The positives are cohesive world monetary system, less aggressive trade and currency manipulations, and so forth.  The negatives are poverty might be increasing in uncompetitive countries/regions, losing sovereignty, democratization of currency printing is still going to be dictated under one central umbrella govern body which oversights the regulatory bodies of how one world currency should work, and so forth.

Since I’m just a puny human, I don’t really know all of the negative consequences might bear fruit if one world currency system is actually taking place.  One thing I do know is that most things are possible, and so you would never know that one day the whole world might band together to come up with one world currency.  Who could have thought Eurozone would be possible, right?  Nonetheless, the jury is still out in regarding to how effective and prosperous the Euro has been for the Eurozone member states.  After all, Eurozone as a whole is facing greater uncertainty in regarding to the increase of financial instability within several Eurozone member states.  Greece comes to mind in this regard.

I don’t particularly side with the idea of one world currency, because seeing how Eurozone member states are facing the problem of not having to be able to print their own currency to support their uncompetitive trade markets.  Still, seeing how one country can manipulate her own currency to boost trade competitiveness at the cost of other countries’ trade welfares, perhaps one world currency might be able to stem this problem.  To sum things up, I’m not sure having one world currency can solve the world’s financial uncertainties, because Eurozone member states have shown that even they are not immune to the financial uncertainties even though they are using one currency (i.e., the Euro) to trade with each other.

What Is The Future Market?

Don’t you hate to hear the future market this and that when you read or listen to the news?  Well, if you understand what future market is, you probably don’t mind hearing news on it.  Some people though, they may not know what the heck is the future market.  Thus, future market seems like a big mystery that will forever be a mystery into the future for these people.  Nonetheless, if you are one of those people who wants to understand what the future market is, then just check out the video right after the break.  In short though, future market is gambling, because you are betting on a contract price that represents for whatever it is in the market.

Dr. Ron Paul On China’s Currency Devaluation And Currency War

Dr. Ron Paul warns more bad time to come as China is now beginning to participate in currency war.  Today, as it’s happening now, China devalues its currency to 1.9% weaker than the pegged Dollar (USA) (according to WSJ).  Market in the USA goes negative, and the world is actively watching China’s movements.  Dr. Ron Paul thinks what China is doing cannot solve China’s slow down in the long run, because the market eventually will force other countries to do the same thing which negates the benefits of what China is doing now.  Since China is devaluing its currency as we speak, can the FED in USA be able to raise interest rate?  Is China sending a message to the IMF and USA for not including China’s Yuan in SDR basket thus far?  How far China will devalue her currency?  Anyhow, check out Dr. Ron Paul’s message on China’s currency devaluation in the video right after the break.  Enjoy!!!

Per Capita Income Cannot Be Used To Compare How Wealthy A Country Has Become

I’ve seen some people used per capita income as an argument for how progressive an economy has been.  Nonetheless, these people could have been deluding themselves with this argument all along.  Perhaps, if they’ve known the truth, they might want to visit the past to wipe off their smirks on this very topic.  How come?  Per capita income is very distorted in my opinion.

Per capita income equation is PCI = TPI/P.  TPI is total personal incomes of everyone in a country and P is the population of a country.  So, let’s assume a fictional country A has 4 trillion TPI and the population of 80 millions, then the per capita income for the fictional country A is 50 thousands.  We can safely assume that this fictional country A has a high per capita income.  In a perfect world where a country has everyone makes the same amount of income per year, it means each and everyone in this fictional country has the ability to make 50 thousands (money) per year.

Some people like to use the per capita income to boast about one’s own country wealth and progressiveness.  Nonetheless, the simplistic per capita income equation doesn’t account for inflation.  Since inflation isn’t being included in per capita income equation, per capita income cannot really be used to compare the wealth and progressiveness of countries.

Why inflation is important?  Inflation is super important in an interconnected contemporary world like ours.  Countries are trading with each other a lot more so than ever before, thus each country relies on endless information that come out from other countries that are known as global trade partners.  Inflation is one of the important information that can help one country to assess a global trade partner’s economic stability.

Since inflation is important, we need to understand the simple concept which inflation represents.  According to my layman conception of inflation, inflation is a measurement of the strength of market prices according to supply and demand.  Although a currency for a country isn’t exactly meant to be a commodity in a market, but it’s too being affected by inflation.  Since currency is too being affected by inflation, thus inflation can measure the implicit innate price of a currency.

For an example for why inflation is an important measurement of a country’s economic stability, let’s assume a fictional country A got into too much debts and has lost the trust from global trade partners.  Since the fictional country A doesn’t have a stable economy and clean national budget, the global trade partners aren’t willing to lend the fictional country A some money, fearing the fictional country A cannot repay the future loans.  Since each country has different currency, thus there must be a conduit to allow the measurement of currency exchange to occur.  Once the conduit exists, each country can then use the currency exchange rates to decide how much a country’s currency is worth globally.  Let’s assume the fictional country A has lost the trust of global trade partners and can’t receive more foreign loans, the demand for the currency of the fictional country A is shrinking massively on a global scale.  Less demand for a country’s currency in the global market means the currency of such a country cannot be used effectively to bargain for global goods.  Since nowadays, all countries are relying on global goods than ever before, thus local inflation can now be imported and exported.  By this I mean although inflation can be used to measure the strength of prices for local goods and currency, but in the interconnected global world like ours inflation can also be used to measure the prices of goods and currency that are meant to be imported and exported for a country.  The fictional country A is going to have to adapt to high inflation since the demand for its currency is very weak globally.

High inflation means too much money is chasing after a product, thus weakening the strength of the money and strengthening the strength of the price of a product.  In the currency situation, high inflation means too much currency is chasing after a global trust.  If the world decides to not trade with the fictional country A unless the fictional country A uses some hard assets or whatever that is valuable to exchange with another country’s reserve currency for the purpose of foreign trades, then the fictional country A’s local currency has become totally useless for global trade.  This means high inflation for the fictional country A.  People who are living in the country A can make 50 thousands (money) a year, but their 50 thousands income cannot really afford them to buy goods abroad, because the local currency is too weak to have a fair exchange rate in the global market.  The fictional country A has to promise hard assets or whatever that is valuable to be traded with foreign loans (in a reserve currency) so the fictional country A can have some money to import global goods such as anything that needs to be imported.

In the interconnected world like ours, the fictional country A cannot be counted as a wealthy country, because its currency is too weak to be used as money for global goods.  With high inflation, the fictional country A’s per capita income becomes meaningless unless the fictional country A’s currency is the most valuable and sought after for global exchange and reserve currency purposes.

Is It Wise For The United States To Pivot To China?

Is it wise for the United States to pivot to China?  This question is so important in our young century, because we’re talking about the conflicts of the two most powerful nations of today time.  Once again, I like to use ancient history to reveal what we might face in the future.  Of course, ancient history doesn’t have a crystal ball to predict a future in which such a future is way different than anything ancient history could ever imagine.  Nonetheless, ancient history was the product of humans.  Thus, we can safely assume no matter how different the future will be, ancient history might get it right still.  Of course, unless the future is not a product of humans but of aliens, then I won’t bet my farm on ancient history at all.  (I don’t really have a farm!)  What ancient history I’m talking about?  Read on and I expand…

I watched a YouTube video, The Phoenician Carthage – The Roman Holocaust, in regarding to how Carthaginian empire was toppled by the Romans, and I was very intrigued to how United States and China are facing a very similar Carthaginian versus Romans picture, in the big picture of course.  I may get this wrong, because I’m no expert in ancient history of Carthaginian versus Romans.  Nonetheless, from what I’d learned from this YouTube video, Carthaginian empire was a superpower way before Rome became one.  Carthaginian controlled the nearby sea trade routes, thus Carthaginian empire was also an ocean going superpower just like how United States is today.  Meanwhile, at the time when Carthaginian ignored how Roman state was on the rise in term of ground territorial expansion, Carthaginian thought nothing of Rome until sometimes later this would prove to be fatal for Carthaginian empire itself.

Sometimes later, Roman state slowly took up form of an empire, albeit a much smaller one than Carthaginian.  As Roman empire began to expand even more, it faced an obstacle which was the Carthaginian empire.  Carthaginian controlled much of the sea routes for trade, and the Romans wanted a piece of that.  I don’t think I can be wrong on this, after all — wars of our time, meaning now or even in the past, were and are mostly about victories over trades, territories and whatnot.  Since the Roman state was on the rise to become an empire that rivaled the Carthaginian empire (eventually surpassed the Carthaginian empire), thus the two superpowers of their time began a series of conflicts that led to three major Punic Wars.  I’m not an expert in Punic Wars history, thus I couldn’t go into the details, but I know few things about the conflicts of Carthaginian empire and the Roman empire that I can use to compare the two superpowers of today, the United States and China.

At the start of first major Punic War, according to Wikipedia’s “Punic Wars” piece (source link: http://en.wikipedia.org/wiki/Punic_Wars), the Romans wanted to expand to Sicily and was presented with an opportunity when a local conflict in Sicily broke out.  Whatever the details were, the local conflict in Sicily became a proxy war for Carthage versus Rome conflict.  Eventually, the proxy war enticed the two superpowers into an all out conflict, resulting in the first Punic War.  Wikipedia details that at the start of the first Punic War, Carthaginian was at a disadvantage on land warfare for Roman state was originally expansionary through land warfare, thus the Romans defeated Carthaginian at the Battle of Agrigentum in 262 BC.  With such a harsh defeat, Carthaginian decided to avoid most land warfare against the Romans and preferred to fight on sea.  Since the Roman empire was not strong at sea, thus Carthaginian empire was able to take advantage of Romans’ sea weakness.  The YouTube video I watched describes after a major defeat on sea, the Romans were lucky to capture a Carthaginian battleship which then later the Roman empire was able to duplicate such battleship technology to revert the tide of war on sea.  This is important for my thinking of the current conflicts between the two superpowers of today.

Today, the United States is still the undefeated champion on sea, and China is largely a powerful land based force.  Obviously, it’s less true than before as China is rapidly developing a huge professional navy with capable battleships and whatnot to deter United States from getting too close to her shore.  Just as how Carthaginian versus Romans, United States is facing a rising China in which China has overtaken the United States in world trade.  Since Carthaginian was facing a hungry Romans in trade and territory domination, the first Punic War between these ancient superpowers was becoming inevitable.  Can we say the same for the United States and China?  Once again, not so different from the Punic War conflicts, contemporary superpowers are emphasizing their face-off on sea.  China needs to control sea routes for trades and the United States does not want to be pushed out of the Pacific, thus the stage is setting up for a future sea confrontation.  Modern Punic Wars?  Who will be the Carthaginian and who will be the Romans this time around?

According to ancient history, Carthaginian empire was a superpower at sea.  Today, the United States is also a superpower at sea.  Romans stole Carthaginian’s battleship building technology, and was able to turn the tide for the ancient battles at sea.  United States and China have yet to go to war on sea, but China is hungry for better sea warfare technology.  Carthaginian didn’t want Romans to expand and capture ancient territories that could dictate favorable terms for trades such as important sea routes.  United States definitely does not want China to control most sea routes, because that would push United States out of Pacific, making United States becomes irrelevant in a modern, most profitable sea-trading territory in the world (i.e., Pacific ocean).  United States for sure knows that China is a very capable land force, because China has huge population to prepare a huge ground force invasion.  In ancient time, Carthaginian relied on mercenary for their army, but the Romans relied on native population for their army.  Today, United States does rely on mercenary more than China for obvious reasons.  One such reason is that China is not in as many conflicts as the United States, and the United States is facing too many conflicts around the world such as in the Middle East.  I’m living in the United States, and I feel it’s a poor taste of me to compare United States as Carthaginian empire and China as Roman empire.  Nonetheless, the picture of the ancients somehow reminds me of the picture of today.  Very freaky in my opinion.

Of course, one big difference of today world is that we are in a nuclear age, thus Carthaginian versus Roman conflicts might be irrelevant for warfare lessons since nuclear weapons can make sea warfare struggles become rather irrelevant.  Really?  What about submarines with nuclear warheads?  Isn’t this scenario all about using the sea to gain victory over the enemy?  Thus the oceans are still important in warfare today, and the oceans are still practically important to how we do trades today.  I think if we can go on without having sea conflicts between United States and China in a major way that might result in modern Punic Wars, then we might make to the space age.  Only in space age where trades take place in space that we might find conflicts on sea become less relevant.  Nonetheless, I don’t bet my farm on this, because nobody knows the future.  Even though the ancient time can remind us a familiar picture of the past, it doesn’t mean the future will unfold similarly.  Nobody knows really!  Nonetheless, history can be a great teacher in that the fundamentals won’t just become the aliens overnight, thus the human products of ancient history will probably be somewhat similar in contemporary age.  Thus it begs the question, is it wise to have modern Punic Wars?  Is it wise for United States and China to have conflicts at sea?

It was how Romans defeated Carthaginian that built the Roman empire into one of the most glorious ancient empires.

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