A couple of flaws there. Countries have their own productive prosperity so need not pay for every import with an export. Wealth is not a zero sum game so the rich getting richer does not rely on the poor getting poorer or even the poor being left behind.sparky wrote:.
as long as countries import more than they export
globalization is a recipe for pauperisation
most become poorer while a few get richer
it could work as long as most people votes are sterilized in some process
and as long as the central power structure keep control of the streets
sparky wrote:.
Basically yes , every import has to be paid for ,
the only way to sustain foreign imports is to export or provide services to foreigners
a country productive capacity is immaterial if foreign money is not obtained from it
vtsnowedin wrote:sparky wrote:.
Basically yes , every import has to be paid for ,
the only way to sustain foreign imports is to export or provide services to foreigners
a country productive capacity is immaterial if foreign money is not obtained from it
You are totally wrong there.
While having a positive balance of trade is indeed a good thing having a negative balance is not in and of itself the end of the world. Foreign debts do not have to be paid exclusively from the profits from exports. As long as the whole economy is productive excess imports can be paid from those profit streams. The idea that exports must match imports to be sustainable is both simplistic and wrong. Most years we have an imbalance one way or the other with most of the countries we trade with. Quite often those with excess cash in hand from exporting to us reinvest their profits here and let the Wall street sharks feed on their profits.mousepad wrote:vtsnowedin wrote:sparky wrote:.
Basically yes , every import has to be paid for ,
the only way to sustain foreign imports is to export or provide services to foreigners
a country productive capacity is immaterial if foreign money is not obtained from it
You are totally wrong there.
I don't think he's totally wrong.
I think he's mostly correct. Imports must match exports to be sustainable. If not, you're asking for trouble in the long run.
dolanbaker wrote:Greenbacks are very rare these days (they were debt free money), the US dollar that is currently in circulation is debt based (based on faith only).
So people who take the US dollar have faith in it retaining its value in the near future and that they can exchange it for other products. World trade is totally dependent of the faith traders have in the currencies they deal with.
vtsnowedin wrote:While having a positive balance of trade is indeed a good thing having a negative balanceImports must match exports to be sustainable. If not, you're asking for trouble in the long run.
is not in and of itself the end of the world.
often those with excess cash in hand from exporting to us reinvest their profits here .
mousepad wrote:vtsnowedin wrote: often those with excess cash in hand from exporting to us reinvest their profits here .
Or in other words you're having to sell your assets to pay for the imports. I wouldn't call that a good thing.
vtsnowedin wrote:mousepad wrote:vtsnowedin wrote: often those with excess cash in hand from exporting to us reinvest their profits here .
Or in other words you're having to sell your assets to pay for the imports. I wouldn't call that a good thing.
Well you have settled the bill but have not yet delivered the export used and perhaps it can't be ex[ported such as land or is worth more to the buyer left here being an ongoing profit maker in it's present location. Shares of Apple stock don't need to be in a tent in Saudi Arabia.
mousepad wrote:vtsnowedin wrote:mousepad wrote:vtsnowedin wrote: often those with excess cash in hand from exporting to us reinvest their profits here .
Or in other words you're having to sell your assets to pay for the imports. I wouldn't call that a good thing.
Well you have settled the bill but have not yet delivered the export used and perhaps it can't be ex[ported such as land or is worth more to the buyer left here being an ongoing profit maker in it's present location. Shares of Apple stock don't need to be in a tent in Saudi Arabia.
Of course that's all true what you're saying. Nevertheless, you're paying for your imports with assets. You sell your land, you sell your companies, you sell your intellectual properties. There comes a point when you're sold out. It's not sustainable. The only thing stable is a import/export balance of 0.
vtsnowedin wrote: I am obviously not a proficient enough educator to correct your misunderstanding.
Time to move on.
mousepad wrote:vtsnowedin wrote: I am obviously not a proficient enough educator to correct your misunderstanding.
Time to move on.
Maybe you are not a proficient enough educator, that could be. But let's not give up that easily. Unlike many a poster here I'm willing to learn and I have updated my understanding a few times based on what people here posted. Can we try again?
Let's take the European experience as an example. Can you explain how Germany's consistent export surplus does not pose a problem in the long run.
dolanbaker wrote:mousepad wrote:vtsnowedin wrote: I am obviously not a proficient enough educator to correct your misunderstanding.
Time to move on.
Maybe you are not a proficient enough educator, that could be. But let's not give up that easily. Unlike many a poster here I'm willing to learn and I have updated my understanding a few times based on what people here posted. Can we try again?
Let's take the European experience as an example. Can you explain how Germany's consistent export surplus does not pose a problem in the long run.
Well in the run up to the last recession, that German surplus was heavily invested in other EU countries, notably the PIIGS, when the recession came, much of that money was found to be invested in property and those countries needed bailing out.
The short term private investments became state long term debt.
vtsnowedin wrote:correct your misunderstanding.
Time to move on.
Because Germany imports significantly less than it exports, this money gets stuck, failing to return, for example, as Germans buying Italian goods or Spanish services. The scale of this is astounding. Since 2008, Germany’s surpluses have hoovered an average of €110bn (£94bn) out of the rest of Europe each year, according to data from Germany’s central bank.
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