Quote: (01-29-2019 11:02 AM)EndsExpect Wrote:
Quote: (01-29-2019 05:21 AM)rockoman Wrote:
So, why has America had a trade deficit every single year since 1975?
If, for the last 44 years I have only been able to cover 80% of my expenses with my own work and I have to issue IOUs to my neighbours for the rest, then I need them more than they need me.
I used to ask this same question all the time when I was younger. However, now I realize that if China makes 300 billion selling to the US... then Chinese Elites take that money and then spend $400 billion on buying US assets. That includes stock, real estate, yachts... pretty much everything.
Yes, turning debt into equity - getting rid of dollars. Very rational I would say.
In my original 'neighbours analogy' this equates to the neighbours who hold my IOUs using them to buy my furniture, my tools and my garden, which then no longer belong to me and which will not be inherited by my children.
Eventually if taken to its logical conclusion I- and my children - will work for the 'neighbours'.
“The world is what it is; men who are nothing, who allow themselves to become nothing, have no place in it.”
- V.S Naipaul 'A Bend in the river'