The Trade Deficit Is A Serious Debt!

As the Trade Tariff hubbaballoo points a finger back at Trump it is interesting to note that not one country was willing to negotiate. Given the inconsistencies in the current tariffs that truly are penalizing US products, not one country saw fit to simply come to the table with a proposal. Canada’s Trudeau was probably the worst example because his retaliation was more of a childish response calling out Pence because the deal had an expiration limit of five years, and then refusing to talk any more.   Are these people really college graduates?   Did their business acumen come from a cereal box? They are truly acting like five year olds.

Who is really the villain here? The EU countries, Canada and Mexico have all created an advantage for their economies and trade, Trump was closing the gap and every country balked and instead chose a ‘tit-for-tat’ business approach…

The argument tapped by Liberal media is that trade includes goods and services, and when services are added to the overall picture – Canada is a surplus partner – albeit everyone else – isn’t. Ok. Trump offered Canada an out – and they refused.

So what is the point?   The point is we need to close the gaps.

The Washington Post goes on to declare that a trade deficit does not mean the US is actually losing real money, it just means American’s buy more goods from other countries than other countries buy from the US. How incredibly inane.

“A trade deficit represents an outflow of currency” – definition courtesy of Investopedia.  

In 2007, The Federal Reserve Bank of San Francisco wrote a white paper that gives greater perspective to the deficit. According to their research the balance began to shift to a deficit in the early 1990’s when Clinton was President. In order to finance the deficit, the US borrows from abroad and/or sell assets to foreign countries to cover the imbalance.

The paper quotes various views of the cause of the deficit and whether it is a concern.   Of course, if the US has to borrow or sell off assets to pay for the deficit each year, ultimately there will be no assets left to sell, and borrowing will come to an end.

The cause of the deficit is debatable. But economists would agree that many factors contributed to the crisis, and therefore many factors will have to change in order to alter the consequences.   Including; government budget deficits, national savings and domestic investment.

In addition trade is affected by exchange rates and tariffs. A weaker dollar makes US goods more affordable for foreign purchasers.   Tariff’s create an unfair added cost.

Bottom line the US trade deficit is a serious issue that has a finite consequence.   It’s borrowing to pay for your borrowing, ultimately, the money/assets will run out. By doing nothing – it is certain death.   It is selling America to the highest bidder. And Trump is trying to stave off the disaster set in motion by Billy Clinton and Georgie Bush – both of whom are entrenched in the Cabal and Swamp.

One thought on “The Trade Deficit Is A Serious Debt!

  1. When they dollars stop flowing out, they will come flooding back in, inflation –which is a devaluation of the currency in your pocketbook and your bank– will skyrocket. That’s the stuff of Zimbabwe and Venezuela.

    The dollar hit bankruptcy a long time ago. The only way to save the economy when the inevitable comes roaring into view that day, is to tell the people they can use anything they want to for currency.

    See mises.org for more information on the subject.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.