[Puffer Fish]

click for video

This short video segment explains for the simple-minded about U.S. trade deficits and why they are not sustainable over the long-term.

[Steve_American]

OK, I agree that their explanation was over simplified.

It endes with a false statement. They assert that if the world stops buying US bonds, then the US will not have the dollars to pay off the existing bonds as they come due. This is false because the US issues the dollar that the bonds are demoniated in. It can sell bonds to the Fed if no one else wants to buy them. So, it can alwys get the dollars to pay off the old bonds, always. Or, it can just issue the dollars and not sell bonds.

IMHO, all bond holders would rather get newly created dollars than to be told their bonds would never be paid off. So, the rich in America will always let the Gov. do anything to be able to pay the bonds.

I never said that the current trade deficit was a good idea. I always said it was a bad thing. Nobody cared what I thought, so it continued. Clinton oversaw the moving of US factories overseas. This increased the trade deficit. I thought it was stupid. I posted a thread here in which someone said that, that was the stupidist thing that any nation had ever done. This is a high bar, an example of maybe the stupidist thing a nation had ever done was for Japan to attack the US instead of woriing with it. So he said functionally, this was more dumb that that.

They call all this a ponzi scheme. OK, is it beter to keep the ponzt scheme going in hopes that it will never crash; or is it better to crash the world ecoomy now and kill millions of people now? If it is a ponzi scheme then those are the choices. Choose wisely.

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