Steel Industry of the UK. To Save or not to Save!!!??? To Save!

Losing the second largest steel producer in whole Europe is not only about losing steel.  And not even about the independence of the country as such, but also the very prosperity (or future misery???) of its residents, the pride of being British etc.! You have got no idea how important and significant it is for anyone living in the UK, and where the solutions lie, and that nobody has guts to do anything about that, for they can not and want not to do that.

In this closure there is something what nobody will ever tell you about! And I can only try! At the end of this blog post you should understand two of the basic facts in economy – Cheaper is to buy expensive products (and do not understand this in a traditional way where by this is meant that cheap means also of a poor quality and, consequently, will result in need to buy more often and, eventually, spend more over longer period of time, and that is absolutely true. But this is not connected to this story). Another fact tells pretty much the same story – By paying more for the same products we would become more prosperous individually and collectively. Of course, terms and conditions apply, to make it work.

Just heard on radio that in Britain only 15% of the GDP comes from manufacturing.  Very poor results for such a developed,  still, country, that not so long ago used to be a huge Empire with the most advanced technologies in the whole world, the factory of the world. How quickly everything changes… I remember the show at the Opening of the Olympics… It was full with the proud stories of that time. So it matters to the country as whole and to individuals alike! And it is vanishing very rapidly.

This situation reveals the trends of the world, its development. It shows the true nature of the rules that govern it, and what it will mean for many so-called “still-developed-countries”. The world has seen civilizations rising and collapsing for numerous times. Nobody has escaped!!! Because they were unable to change their old ways in the face of a new threats. They kept living in self-deceit and follow values that ruined them. The United Kingdom is no longer a vast Empire. It is not a problem itself. But the fortunes are changing rapidly. This road leads only to trouble and misery.

By the way, the steel industry is being closed not only in the UK. There is (or was?) a steel plant in such an EU country as Latvia also. It is much smaller and is rapidly going to ground, if not finished altogether already. Do not know much about other EU countries. Who knows what is it they are losing year in year out… thanks to “the Free Market” that is far from being free.

Peter Hitchens has put the whole story absolutely perfectly! http://hitchensblog.mailonsunday.co.uk/2016/04/privatisation-free-trade-shares-for-all-the-great-con-that-ruined-britain.html And I would like only to elaborate on that, for it happens to be my view also.

To begin with, I would like to draw a very simplified picture about what is going on in reality, about something nobody is speaking about in regards to this development, about its reasons and consequences.

A very simplified story is that thanks to the rules and requirements of some international financial organisations (such as the World Trade Organization (WTO), the World Bank (WB), the International Monetary Fund (IMF) etc.), countries open their markets to foreign products in order to be able to trade in the other countries of such union. They call it a Free Trade from which benefit all involved in such unions, which is one of the most advanced lies of modern age. But opening markets comes with conditions. Small script that the common public does not have much understanding about. In more detail about that a bit later.

I am actually not too sure whose requirements are those about the currencies, but countries of such unions must make sure their currency is stable and its price is guaranteed at certain level for others to exchange their currency. It is made in order to ensure the sellers of goods from other countries can exchange the money they have cashed in to the currency they want and at a predictable price. It may seem not only innocent but even beneficial for all involved and this particular country itself. After all the stability of the money (meaning, prices for all goods as well) is a proof, in a way, that the economy is healthy. In addition to that we must remind us that any instability with money damages first of all the most vulnerable in the particular market – the poor. So the stable prices must be good, right? But not everything is so simple and nobody should apply same rules for all situations. It is especially interesting when we learn that changing exchange prices not necessary mean that there is price instability in the inner market of the country. There is no or not much correlation between . Of course, here also are conditions. For under certain economical and monetary policies there is a direct correlation. Unfortunately we must admit, that all countries are following the bad philosophy of how to run their economies, for they all are bound by the rules of the international organisations mentioned above. And they are extremely powerful. If you are not with them, they will make you regret that and bet them to take you in.

The so-called New Order! No wonder they all come from and are based in the United States of America.

So if a country wants to access the other markets in order to “freely” sell their goods, it must agree with those conditions. But every stick has two ends. After gaining the access to those markets one must keep in mind that huge number of other countries gain access to this country’s market…

If the country sells to others more than buys from them, it is clearly economically beneficial. But if others are selling more to it, she will inevitably run into debts, because it will increasingly need a currency of another countries to buy their goods, and she can have it only by selling her own products. So only acceptable situation following these rules would be if the import and export are in balance. But even than not everything is so right and sweet because there is a huge difference between the products you sell and/or buy. For there are high-tech products with large additional value, and there are food products with very low one. If one country is selling only one type of products, but another only another, than even if the cash amount exchanged is in balance, it is no good anyway, for this is not a fair exchange in terms of work resources and the pay used to produce these two products.

So, basically, in one way or another, one country in this story (the food producer) inevitably will run short with money and fell in the need of borrowing the currency of the other country in order to pay for the products they buy from a high-tech producing country. It also means that the real physical labor and time used in work will be exchanged disproportionately.

Let us not forget that after the borrowing has started, it becomes an additional burden to the more working and less earning companion. And there will be a cost at  certain interest too, imposed by the high earning neighbor, often called “a help”. And they will have to do that in order to balance the monetary deficit generated by the import/export.

The worst part of this is, that this is never-ending circle when you have entered it. The poor countries not only work more and take home less, they are subsidizing their rich neighbors by paying them interests, by buying their high-tech products and borrowing again and again.

Think now, how many countries are living within their means! We all should be very surprised every day by knowing that the most powerful and developed countries of the world are constantly borrowing… Those who can not afford it, live in constant poverty.

The question to ask is – if ABSOLUTELY EVERYONE IS BORROWING, WHO THEY ALL ARE BORROWING FROM??? One may say, from China. And partly that would be true. But China has reached its heights not so long ago. But the Western countries were already borrowing. So who they are borrowing from, if everyone is borrowing? Is somebody performing some kind of magic tricks from circus or something? There is only two options. Either there is “one someone”, who hides himself and controls absolutely everything in the world, and the world is borrowing from him, or we all are being cheated day in day out by somebody, who pretends to be a poor borrower, but gets all the money. But who would be a beneficiary in this case? No idea. I just know one thing – nothing of this is normal. It smells like an enormous con.

So lets us go back to things we can know.

This principle, when countries must ensure they exchange their currencies at fixed price is a violation of the very principle of the Free Market. Of course, the exchange prices can be changed within certain, very narrow borders. And to achieve this they borrow as much foreign money as necessary to sustain this system, to ensure there is enough foreign currency for all levels of demand. Because if there would be a shortage of it, the prices would have rocketed.

The best idea to eliminate the Free Market in monetary domain is the creation of one currency among so many, so different European countries. The rich and powerful of the world can never be grateful enough for those who embraced this absolutely insane idea. It is impossibly mad to unite completely separate economics, that have completely different economic systems and different levels of technological development under one currency.

It would make a sense if they all had become one country, like one united economy, one economical philosophy with united benefits and levels of pay etc., with completely united budget. But they do not have this and they never will. It is as insane as if in the situation when somebody has invented a new language, and in one day all people from different countries have to adopt it, with the good intention that all people in this union can understand each other. Great intentions. No more translators needed, sharing with the best ideas across the union is made easy etc…

But the problem would be that this new language only offers to replace the native words of each separate national language to the new one. But the local grammar of each country would be preserved. Even though all people would have learned in perfection the new words, they would heavily struggle to understand each other for languages tend to build the sentences differently. To understand this go and try out Google Translator. Try to translate some fictional texts or manuals from another language in Europe into English. What you will see is loads of familiar words but the meaning of the text will nearly always missing.

And the same is with this new, united currency – the euro.

One may say that people would have learned the grammar of others and learn to understand each other. To certain level they would, of course. But if we want to draw parallels with the euro, when the national economies keep running each one in his own way, than it is like in the example of the language when each one keeps using his own grammar. It will never work in the way it has been imposed. And this has been done by the so-called brightest minds  in the field of economy in the world.

And even these brightest minds often do not realize that by this they have disabled the Free Market” completely, but it was already damaged before. for many in such unions it all means that they have let themselves to start to sink into everlasting debts. This is interesting, because all this is being done in the name of the Free Market… and benefits from it FOR ALL, as it has become popular nowadays to say. And it is nothing like that. This system is to keep the poor in poverty, and never to rise their heads. Funny enough, the rich who have robbed them through these conditions, keep coming to them and giving expensive advises about how to improve their fortunes. But in current conditions it is mission impossible. So they keep robbing them again by giving advises that are useless.

This requirement to secure certain prices for somebody’s currency and keep it stable is a clear violation of the Free Market principle. Because in Free Market principle it is a demand and supply who rules everywhere and corrects everything, and depending on them the prices regulate themselves. There are some regulations that disable this principle. One of them is, as I have said, the fixed exchange prices. Another is … immigration… Immigration as a phenomenon itself is a consequences of unfairly ruled economies. And with these open markets everybody gets damaged. So the people from the most damaged economies start to move to the countries with better prospects, and this strongly affects those markets, the pay levels in those countries. The biggest beneficiaries, once again, are the rich, for they get cheap labor for their factories and cheap servants to clean their houses. The ordinary common people can only lose their prospects…

Free Market principle, where the demand for a labor would have raised the wages and pushed the entrepreneurs to truly think about how to improve the efficiency, is no longer doing its great job, for the market gets supplied with new and desperate workforce. And it is being abused at the account of the local workforce. Without immigration and a shortage of the labor, only the best employers would have flourished, securing the most efficiently run economy. So the Free Market would have sorted out this problem. And if there is a real shortage for the skilled workers, like plumbers etc, than the demand for their work would have raised their income, for some rich people would be able and willing to secure they are served faster and for this reason they would be willing to open their wallets. So the Free Market would have sorted out this too, making those who can afford to pay more.

But on most occasions that would not necessarily mean that the rich are suffering a loss. For if the serviceman (any ordinary common people) earn more, they are willing to spend more. And the rich people often are the owners of large businesses. So whoever earns more, he spends more. And he spends more also for the rich men products. So, actually, it does not mean a loss for anyone. It rather means that the virtuous circle has been enabled.

Unfortunately, the rich run the world by ruling politicians. And their greed makes them blind. The greed is a very strong emotion. If somebody sees the opportunity to get more cash out of the business at a spot, even at the cost of the well-being of their own employees, they grasp the chance. When one of them has done it and earned more the others of a kind, the others follow the pattern. They are so blinded by their greed, that they do not see, they are damaging their own businesses, for they reduce the pocket-money of their they users of their own services and products. But as I have said, the greed makes people blind.

And in the same way as the virtuous circle works, works also the vicious circle. So it is up to us, which way to go. If the greed rules the societies, and this is absolutely the case in nowadays world, than we live in vicious circle, where one bad deep creates and sustains and begets another, and the rat race has begun… But everything can be just the opposite.

And if I say it is up to us, I really do not mean that, for it works only in theory. But the world is fully in the hands of the greedy ones. The very thought that they have to pay somebody more makes them feel sick, making them blind and deaf towards the basic logic. And the politicians are only servants and friends of the big businesses. So do not expect much from there…

Just to clarify some bits – I am not a supporter of so-called Free Market policies as they are understood now in the world, even though it may sound so. Yet, in it there are incorporated some good ideas too and I agree with them in principle, but with terms and conditions, which I will try to explain some time later, maybe in another blog post.

So even as this principle is understood in nowadays’ world, it is being violated by many wrongdoings, some of which are the currency market requirements, immigration, sharing the created wealth etc.

According to the Free Market principle, if a particular country is short with currencies from other countries, and in need of them, than the price of those should go up immediately according to the demand of these currencies-products. And the price would have settled at the level which people were ready to pay for it in order to gain some products from another country. Of course, it would make the products from those other countries more expensive at this particular market. And that would be a blessed thing to do for the manufacturers of this country.

And than, if the country follows these rules, its monetary balance in the international trade would be in balance. All the incoming and outgoing money, it would regulate itself, and this is exactly the main philosophy of the Free Market ideology. But it has been disabled by certain requirements by those international organisations. As I have said before, I am not sure, who is imposing these requirements to countries. I believe it should be one of those WTO, IMF or WB. The New World Order…

As a result we get the following. The poorer countries can produce cheaper products, but it comes at a cost. They are being pushed into never-ending misery and poverty, they have become financial slaves of the rich. They try to escape from their own countries. The wars and crimes and unrest are common in those places. They can not afford to buy the products from the rich countries and for this reason the rich themselves lose some income.

I have described in other article of my other blog a principle, that is called the Principle of Reflection. Put short it says, you receive back what you give. Give others the abuse, and you will reap it yourself from them. Take away their money by reducing their pay, and you will reduce your own income because you will lose a customer simply because you will have reduced their income, and they can not afford it anymore.

If these “Free Market principles” are enabled by so-called Free Trade agreements, than all countries must ensure the poorer countries have enough money to sustain themselves. For by selling their goods it becomes impossible for the poor to sustain themselves, because they nearly earn nothing from their produce because of the low prices the rich are paying for that. So they have to borrow to keep themselves alive. A financial slavery is created. The rich ones rob them at least twice. First when bully them into cheap labor and low profits, secondly when “helping out” by lending them money.

So the poor are trapped into this vicious circle. They have debts and they have to borrow more to survive. The previous debts already are a burden to them and take away from they profits that are already low. The situation with money become more serious year in year out. They do not have enough for the basics, let alone education and development. They are doomed to stay in this misery.

And the rich are also trapped into this situation, because they heavily rely on the products and prices of the poor countries. They would not survive by themselves. For this reason, if some kind of unrest breaks out in any of those poor countries, or even a war, the rich do what they can to help those countries out, declaring it some kind of human duty etc. But it is only a business.  The truth is, they do not help those who they do not need. And anyone who tries to defy them, or even worse, who openly interferes into their plans, they imply sanctions against them or even wage wars. The moral of those who rule the world is – either our way our you will be no more. It all is happening in front of our eyes for tens of years. Just think who is playing God by removing governors of other countries and interfering into businesses of anybody else.

The New World Order, as they call it.

But the true beneficiary is only one. Who knows who!?

Of course, there is China, who has become, unexpectedly, I believe, to powerful and keeps growing. But we should not expect any good changes from China too, for if the country has huge number of billionaires, it is a clear sign, that there is no fairness and huge number of its society still lives and will live in financial misery. And the way China is being run today is more like an organised, non-inheritable by blood dictatorship with upper classes and the nation. Basically, there is nothing you could call the People’s Republic of China (PRC). It simply does not exist. It is already rotten as was Soviet Union. Ordinary common people there have nothing to say, they can not challenge the ruling class.

Steel industry??? :-)))

What is the consequences of these principles that are being imposed on the whole world? The problem is, that Western countries has a very high living standards. It means, their products will nearly always, inevitably, be more expensive than those of poorer ones. The cheaper products take over all markets, which means destruction of more expensive local ones. And to cover the loss of income a country starts to borrow. Put short it means – the local governments (even from developed Western countries) borrow money in order to secure the closure of local manufacturing.

It really sounds weird, but it is exactly what is happening. If there was a Free Market principles in place, nothing of that would ever be possible.

For a short time it may seem even beneficial to the so-called rich countries, because they gain much cheaper products. The general public should be very happy and the governing politicians will say just that. The Teddy Bear manufactured in the UK used to cost some 10 times more than the one from China. And consider, it has been transported all the way from China too. How is this possible to make it so cheap over there? The answer is simple – the workers in China are heavily abused.

The People’s Republic of China! As in that old joke of the Soviet Union. The names of “these people” are listed on the party’s list of higher officials…

And this is exactly what we are being told about constantly – we get those cheaper products and we benefit from that. And that it is a win-win situation. Prices will be stable, they say, and our former manufacturers will find something else to do. And the notorious “Free Market” will balance everything out.

But in order to make a judgement we have to see a whole picture.  In reality we live in the world, where nearly everything can be produced or manufactured cheaper than in the most of the EU. What keeps the EU above the water is the level of technologies it has. And the unfair policies within the EU itself. Many do not know that poorer countries of the EU receive much smaller subsidies for farming than the rich ones. Ironically, it is excused with the fact that the salaries are lower in those countries. But this attitude will never help to rise them in those countries and they will always stay the country of a cheap labor. Maybe that has been the plan from the very beginning…

Funny enough, this all has led to the situation where the food products from the high income countries tend to be even cheaper than those from low-income countries. So they can not endanger the richer members of the union, and at the same time will never get out of the low-income status. Perfect plan. Anyone sees in this a Free Market?

Does anyone know what is the purpose of existing of the EU here at all? Should not any member of it benefit from being in the EU? Is this the best cheating plan ever created or what?

It is hard for the poor and underdeveloped countries to jump into this train of technologies, even more so because those are moving forward with a very great speed. And by producing high-tech products the profits are much bigger than by producing food. I will tell it even though I repeat myself, for it must be repeated and repeated.

So it means that many of those countries will become only food factories, so-called “banana republics”, where nothing else exist apart from food growing and cheap labor. So they will be doomed to be a hard-working societies without any chance ever to get anywhere higher. The only hope is for those individuals from those poor countries if they will try to escape and move to those richer countries and settle there. And this is exactly what they are doing. 

The “Free Movement” was not created for the benefit of the poor from poor countries. It was created for the convenience of the rich from rich countries, so that they can travel and enjoy the money they never have earned, for it was provided to them by unfair terms and conditions of the Free Market that has never been free. And even less fair. So the immigration we see today was not meant to happen. Only high skilled people were meant to immigrate, to make the abuse even bigger. And the abuse is hidden in stealing talents from the poor. the poor countries can not afford to pay high salaries, so it is easy to get them to rich countries, if only the borders are open. And nobody is bothered about the fact that educating those people has cost that poor country huge amounts of money. Who cares, right? It should be the main slogan of the EU – who cares! 

Who cares if you are in shit because of us as long as we benefit from that!

But it turned out to be a different problem, this immigration. Huge numbers of people started to move. They were abused by the whole EU community, and now they abuse, in a way, the whole community of the EU. The principle of Reflection.

 

And yet there is also China now. China can manufacture absolutely everything. And the greed of Western Businessmen has been beyond common sense. They think only about higher and ever-growing profits. They do not realize, that this thinking is profitable only in short-term. In long-term they significantly reduce the income levels of their own societies on great scale… So they create the world where there is a huge amount of cheap products but not too many people can afford them.

When the first manufacturers moved to China, their income rocketed. Others saw it and followed the pattern. They do not realize that the bigger number of them have moved, the more they have damaged the income levels of the societies they are willing to sell their products. It means, in long-term they will gain nothing, and even lose a lot. But as long as those requirements of the “open markets” exist, businesses will keep on moving away. Ironically they have created the power of china by their greed and willingness to abuse it. There will come time, when china will start to dictate the rules to everyone, unless something unexpected will occur.

And this all leads to a vicious circle. But in a perfect world we can and we should create “virtuous circles”, not “vicious ones”. And this vicious circle is this.

  • Wrong monetary policies destroy local manufacturers and put even huge countries into enormous, never-ceasing to grow debts. So the politicians have created a system where they are forced to  borrow money in order to destroy local manufacturers.
  • When local manufacturers have been destroyed, huge number of people become jobless or transfer to less paid, simple jobs, because nothing else is available. Many turn to the state for a financial help. So instead of collecting money in taxes, the state is compelled to pay benefits and the existing taxpayers contributions also shrink, as there is this chain reaction – the problem begets another problem. It is called – vicious circle.
  • When increasing number of manufacturers are forced to close their plants or move to other countries, the income levels in this particular country falls significantly. it means, even if they manufacture in other countries, their sale results and profit does not grow, simply because the general ability to pay has dropped.
  • After a while the manufacturing is completely in ruins and even if you would like to revive it, you will realize that you have lost the skills and the money to do it, and the debts will hang heavy over the whole society and its chances to revive it.

So again. In the situation described above (and this is the case not only in poorer and less developed countries of the EU, but also in the UK) the country gets into situation, where it becomes impossible to be in control of the circumstances. And this all is thanks to some monetary and other requirements of some extremely powerful and greedy international organizations. Because of these debts the poverty of the country grows, the skills and the income of society, which are the drivers of any development, are shrinking, and there is no way out. Luckily the UK has not been mad and did not join the monetary union of the EU. But that is only one point that damages the national economies.

For this reason, understanding the realities of these mechanisms of economy, I can only say, that the steel industry must be saved by all means, by all cost. And if for that one needs to get out of the European Union, even WTO, IMF etc., so be it. For all the existing international, economical unions, unfortunately, are built to abuse the weaker economies within them. How they did manage to persuade them, that they will benefit from this abuse, is still a small mystery to me. It just proves that all those economists and politicians are worth nothing.

If the Conservative party now tries its best to get rid of debts or at least stop sinking deeper into them, than all their efforts will fail if they will stay with the existing requirements of those international unions, including the EU.

And even if they will succeed it would be even worse and only short-term gain, because it will mean that it is achieved by putting huge numbers of the population of the UK into deep misery. Needless to say that it will make the criminality to grow, which will mean a growing demand for the police and health institutions. But there will be no money for that. They can only succeed in what they are doing now in short-term, but in long-term it will create a very powerful situation that will give birth to all kinds of other trouble. So it means, that even if they succeed, and lose power, than the next government will be in enormous, unsolvable trouble.

There is a saying in Russia – to break (destroy) is not to build. 

Rebuilding of societies is a very long and demanding process. For destroyed economies are not only economies, but also societies in any way imaginable, starting with spirituality and skills and willingness to do anything in a righteous ways. The deeper you get into this destruction and the longer it lasts, the poorer the chance of revival of this particular society and its economy later.

So – what to do with the Steel Industry in the UK? 

To me there is no question. It MUST BE SAVED AND SECURED BY ALL MEANS.

As Peter Hitchens has rightly said – …I miss the old names of trusted brands, and the knowledge that these things had been made for generations by my fellow countrymen. But the new broom swept, and it swept pretty clean. In towns I know well, car assembly lines, railway workshops, glass-works engineering plants, chocolate factories vanished or shrank to nothing…

And it is not only the pride of the produce of your own countrymen. It is the independence, the prosperity, the spiritual well-being of the whole society.

Americans are very willing to keep Britain in the EU. Why? Because it is easier and cheaper for them to come and take the whole market through one institution. And no country can protect itself, its well-being, because any decision is and will be a compromise between some 27 interests…

And because so many interests are met in the EU, the whole Union becomes very vulnerable through the laws of the EU, because when you start to compromise, everybody loses. All gains achieved by compromises are short-term gains. In long-term they mean only losses. The EU has proved its worthlessness clearly enough. And Americans fear only about their own profits.

If the UK leaves the EU, than the whole Union will fell apart, and that will mean difficulties to the economy of the USA.  Unfortunately for them, any government must think first and foremost about those people who have elected them, PROTECT THEM, THEIR INTERESTS, NOT THOSE OF OTHER COUNTRIES.

Americans themselves are doing this just brilliantly. They see the rest of the world as the cow to milk. Of course, they are not thinking about and making happy every single American, for otherwise there would be no such a great number of people living there in such hard conditions. It is full with homeless people and people living in a misery, prisons. They have one of the highest rate of inmates in the world. This figure always is a proof about high levels of unfairness in society.

So all in all this whole story, even though is not an academic research, should be simple and broad enough to explain that it IS true to say – Cheaper is to buy expensive products (if those are produced in your own society and in a fair conditions) And the same is true about the other story – By paying more for the same products we would become more prosperous individually and collectively. Of course, terms and conditions apply… 

Explanation or Terms and Conditions.

If we buy more expensive products, BUT PRODUCED IN OUR OWN COUNTRIES, the benefits for the whole society and the state itself are so great, that it pays back in prosperity for all in this particular society, takes off burden from the state not only because of reduced number and amounts paid in benefits, but also because of reduced criminal activities etc. So in this way all people in such society would become much more prosperous. And this is only one condition for the blessed results to come true. Another condition is how the income in this particular society is shared. If the differences in income are big, than depending on the scale of unfairness, everything can still fail, even though the international trade is sorted out.

And the same works the other way too. If the sharing is perfect, but there is a big failure in international trade, failure will follow anyway…

So what do we do is in our hands. We just need a clear vision of what is what and where do we want to be and how to get there, what is the real way to achieve it.

Unfortunately I do not believe that this change will ever happen. Politicians are too weak and scared of such huge all-reaching changes. in my view, whole Europe will see a total collapse sooner than change they way it is run. But the UK can make the difference. Only that the by voting to leave it would be only a first small step towards it.

Have a good day.

 

 

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