The question is why? To save American farmers from poverty?
Discussion
No. Most inflation in developing countries is external inflation…inflation that is imported when food or energy are brought into a country from elsewhere because of some structural deficiencies within the country that prevent production at home.
Importing food or energy leaves these countries with a trade deficit each year. To pay for these goods, they either have to borrow dollars or euros, or they don’t borrow, and their exchange rate is going to depreciate over time. If they try not to borrow, they’ll be paying higher and higher prices of their own currency over time. So they’re importing the US’s inflation into their own economy by being energy or food dependent.
The US forces these countries to be food dependent by subsidizing US agriculture and exporting surplus food abroad. By creating food dependence with cheap products that undermine those countries’ productivity, the US is able to offload its own inflation onto them.
Central banks in developing countries end up having to issue bonds denominated in dollars or euros or yen to keep their exchange rate artificially stable. But by doing this, they’re stuck in a permanent debt trap.
A predominant reason why the US has 850+ military bases around the world is to maintain a state of energy and food dependence within developing nations. The US had a great interest in impairing a country’s ability to grow its own food, and to instead to flood it with cheap grains.
But in a true free market if Americans can import food at a lower price than the local growers then what happens to them?
🤷♂️We’ve never had a true free market. We have always been net exporters of food with the exception of products that do not grow well here.
🤷♂️We’ve never had a true free market. We have always been net exporters of food with the exception of products that do not grow well here. That export value is subsidized by our government because true market cost would be much lower if developing countries were allowed to grow their own food, and we would be unable to incentivize farmers here to grow enough to flood the world with surplus otherwise.