The Risks of International Trading

When it comes to the world of trading, there are a lot of ins and outs to take into consideration, and all of them count. Big time. You see, trading is the backbone of the global economy, and that global economy informs all of the national economies taking part in international trade. Needless to say, the stakes are somewhat high when it comes to international trading. For example, China is famous, or infamous, depending on who you ask, for manufacturing many of the goods distributed in other parts of the world. If we failed to satisfy trade deals with China, we might lose access to the many products produced there, and it would have ramifications for us on a national level as well. A corporation like QVC distributes a great many products, and so they would take a major hit if their manufacturer was located in China in this hypothetical scenario. Think of the economy, regardless of scale, as an array of dominoes. Each domino needs to remain standing, or it could knock over any number of pieces. It also helps to think of the economy as an ecosystem. They do both have the same “eco” prefix, from the Greek “oikos,” meaning home. Basically, for the whole to survive in homeostasis, or balance, each piece of the whole must continue to function.

Economics is, therefore, an incredibly intricate science and, I would imagine, largely based on prediction, rather than knowledge, as there are so many moving parts, as it were, that full understanding of the global economy is potentially impossible. However, we have records pertaining to the overall economy indirectly in the form of the stock market, for example, so we’re not flying blind. Another way to think of economics is as financial meteorology. We can never know for certain, but trust in the people making predictions to have a relatively high chance of being correct, as they do have algorithms by which to make these predictions within a relatively small margin of error. However, there is always the chance that these predictions can be wrong, and it’s our job as a civilization, both nationally and globally, to make sure that mistakes are on the smallest scale possible to avoid total collapse.

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