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Our current monetary system muddies the waters a lot.

Posted on: April 8, 2025 at 20:36:37 CT
JeffB MU
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In theory if one country is continuously running a trade deficit the wealth of the citizens of that nation are being transferred to their trading partners. Over time, it would make the deficit country poorer... unless enough of that spending was for improving the productivity of the purchasing nation, which should make them more competitive & help reverse that deficit eventually.

But the current fiat currency system can pervert that paradigm. Countries are manipulating their currencies and often devaluing them to get a competitive edge. Inflation tends to reduce the value of assets and of debts in that currency.
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Are trade deficits inherently bad? If so, why? (nm) - Bosalphus KC - 4/8 20:11:37
     Ah, so you are TBone, explains a lot.(nm) - RayKinsella1922 SEC - 4/8 21:33:21
     In our case they are bad because the means of production - tigertix MU - 4/8 21:32:41
          boogeyman BS (nm) - Seagull MU - 4/8 21:42:03
               In what way(s) in your opinion? (nm) - JeffB MU - 4/8 22:04:35
     Not when you have the world reserve currency (nm) - Seagull MU - 4/8 21:10:03
          Exchanging real goods for Monopoly money.(nm) - TigerMatt STL - 4/8 21:19:55
               Exactly. They take money we print out of - Seagull MU - 4/8 21:28:56
                    On the other hand, it does have adverse effects upon our - JeffB MU - 4/8 21:49:41
                         You can't blame foreign countries for your own country's - Seagull MU - 4/8 21:53:02
                              That would be if all other things are equal... aka 'a level - JeffB MU - 4/8 21:59:23
                                   The US has 5% of the world's population - Seagull MU - 4/8 22:09:04
                                        That is one variable among many. Technology & machinery - JeffB MU - 4/8 22:12:28
     is caving and pausing tariffs bad?(nm) - Fire Marshall Bill STL - 4/8 20:38:35
          RE: is caving and pausing tariffs bad?(nm) - meatiger MU - 4/8 20:45:35
          no. every country should cave and pause all tariffs - Ferg MU - 4/8 20:40:31
               so Trump was spot on yesterday morning?(nm) - Fire Marshall Bill STL - 4/8 20:41:23
     Our current monetary system muddies the waters a lot. - JeffB MU - 4/8 20:36:37
          RE: Our current monetary system muddies the waters a lot. - meatiger MU - 4/8 20:44:43
               I'm not quite sure what your point is. It seems to me that - JeffB MU - 4/8 21:01:43
     no. Trade deficites are a sign of strong economy - Ferg MU - 4/8 20:33:48
     It is if you outsource too much affecting national security - TigerMatt STL - 4/8 20:26:50




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