The Myth of Trade Deficits

Discussion in 'Politics and the Topics of the day' started by COINTELPRO, Jun 7, 2018.

  1. COINTELPRO

    COINTELPRO Well-Known Member BGOL Investor

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    After looking over the issue of trade deficits, there are really other factors that should be considered. There are massive trade deficits with China and other countries, however, many countries are forced to buy oil in dollars bolstering the U.S. dollar. This is not factored into trade deficits with many countries that OPEC prices oil in dollars. They have the oil but accept U.S. dollars for payment requiring countries to exchange their currency for U.S. Dollar creating demand. There is also trade deficits with investment when they buy shares or treasuries rather than companies in their country. If you are a country that imports oil in dollars, you should factor that in the trade deficits. Buying or exchanging any country currency for whatever reason is trade, it does not have to be consumer goods only.

    What really matters is the exchange rate and jobs that are transferred between countries as a result of global trade. If you are no longer manufacturing a good and service because of global trade, they are gaining the intellectual property in its production and manufacture which can be problematic.

    We have trade deficits where instead of doing something, we transfer our wealth to a company to perform that task such as dry cleaning or cutting our lawn. This frees up our time to focus on your job or children since you are no longer devoting time to that task. The same thing happens when all these companies come back, instead of a person working for Intel, they might take a high paying factory job.

    The U.S. is extremely wealthy that the amounts we are talking about is peanuts; however, trade affects exchange rates. It is like a billionaire taking his clothes to the dry cleaner or hiring a house cleaner. They are paying out all this money to all these people but they generate so much wealth internally that it does not matter.
     
    Last edited: Jun 7, 2018
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  2. COINTELPRO

    COINTELPRO Well-Known Member BGOL Investor

    These trade deals should move the exchange rate from a market based approach to something else that approximate the buying power of each countries currency determined by a quantum computer. Better yet, unifying our currency which will eliminate the need to worry about trade deficits and exchange rates.
     

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