Dear President Donald Trump
The use of GDP as a measure of performance and growth enables Communist China to overstate both measures because it controls its
- EXPORT PRICES to inflate them above its low (volume/cost/price mix) domestic prices.
- IMPORT PRICES to be below its domestic costs and prices of production.
A consequence of the above is GAP understates the performance and growth of the USA Economy because
- The USA pays too much for its IMPORTS from Communist China.
- The USA receives to little for its EXPORTS to Communist China.
Of the World’s Top 25 Nations of EXPORTS by volume China is No. 1. Germany is No. 2 and the USA is No. 3.
Germany has a COST INDEX well above the USA but is No. 2 because it is the BEST BRAND MARKETER in the World.
The USA has a COST INDEX only marginally above China.
To be No. 1 the USA needs to
- Implement 2% Tax to reduce its COST INDEX well below that of China.
- Become the BEST BRAND MARKETER in the World by manufacturing for domestic consumers and for export, products of exceptional performance/efficiency/
reliability/design and user comfort, new innovation and technology and as “TOP” in consumer satisfaction and pride of ownership.
The USA needs to follow the example of Richard Branson who when asked what he knows about Financial Accounting for Profit is reported to have replied “Very little. What is important is to be better than anyone else at what you do and profits rise.”
Kind regards
Derek Smith CA