By Richard Lehmann, at Forbes.comIt’s sad how history has a way of repeating itself, especially when repetition is a bad thing. Our current best example is the trade imbalance with China and countries’ refusal to address the problem in a meaningful way.
By the 16th century China was one of the leading nations of the world. It was prosperous, economically self-sufficient and isolated. European countries came to China to buy its tea, silks and spices and offered European industrial goods in exchange. But, the Chinese emperor would have none of the European goods, which he outright banned. Hence, gold and silver were the only acceptable medium of exchange.
A problem developed with this trade arrangement in that it was draining Europe of its gold and silver, i.e. its universally accepted currency. In economic terms, this meant trade in Europe was slowing down due to a shortage of currency......read on
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