These other countries would prefer having our money and financial instruments rather than the actual goods and services they are providing to us.
Actually, no.
You may or may not like this to be the case, but this is not a post second world war scenario, with a decimated Europe and bankrupted former colonial powers.
Trump is absolutely hastening the collapse of the dollar era, which, despite the uncertainty could very well be doing the world a favour. If he manages to impoverish the US worker to the degree that they can compete with India or China on manufacturing costs, this will be to the benefit of the billionaire class. I doubt Chinese middle class people are harkening for a return to being the world’s factory workers in the way Indian slum-dwellers might quite like.
The question regarding de-dollarisation has always been ‘can the US relinquish its exorbitant privilege without starting world war 3?’ It appears that this question will be largely answered over the next four years. Honestly, generally I have liked the American people I have come to know over the years. I don’t think you all could have a weaker, more exploitable leader in what is shaping up to be a period that could shape American quality of life for decades.
Why must it be balanced?
Americans import more than we export. They use the word “deficit” to make it scary.
These other countries would prefer having our money and financial instruments rather than the actual goods and services they are providing to us.
They are giving us actual things for the money the fed creates ex nihilo.
This is not the same thing as pointing out we should have local manufacturing and reduce reliance on global supply chains.
I’m not defending the Orange Doofus, just tired of seeing these debates being fought through the wrong lens.
Actually, no.
You may or may not like this to be the case, but this is not a post second world war scenario, with a decimated Europe and bankrupted former colonial powers.
Trump is absolutely hastening the collapse of the dollar era, which, despite the uncertainty could very well be doing the world a favour. If he manages to impoverish the US worker to the degree that they can compete with India or China on manufacturing costs, this will be to the benefit of the billionaire class. I doubt Chinese middle class people are harkening for a return to being the world’s factory workers in the way Indian slum-dwellers might quite like.
The question regarding de-dollarisation has always been ‘can the US relinquish its exorbitant privilege without starting world war 3?’ It appears that this question will be largely answered over the next four years. Honestly, generally I have liked the American people I have come to know over the years. I don’t think you all could have a weaker, more exploitable leader in what is shaping up to be a period that could shape American quality of life for decades.
yes, but that’s caused by an excessive trade deficit. A slight trade deficit when you’re the world’s reserve currency is ideal.
“trade deficit” is a completly wrong expression.
Why? Because it only count goods and not services. Services which, for a developed economy, are generaly above goods in part of GDP.
https://www.bea.gov/data/gdp/gdp-industry
What is caused by an excessive trade deficit?
A trade deficit is not, itself, a problem. That is the mainstream thinking in economics.
But Trump himself has railed against the US trade deficit, so it is meaningful to point out that he is making it larger.
We sell you items for euros. You give us USD for our euros. You spend the euros on what we produce.
We use your USDs to buy your companies.
Your population continues to buy our production…
Cycle continues
That’s how China is buying stakes everywhere
A trade deficit puts downward pressure on the value of the currency relative to the currencies of the trading partners.