Philosophical Musings

Philosophical Musings

Sunday, February 3, 2013

Trade Deficit

To me, the most important economic indicator is the balance of trade, or trade deficit. Any trend with it shows whether a nation is increasing in wealth, or piddling it away. We were pretty balanced in the late 80's to low 90's. Then you can see, it started to come apart. China was emerging, & we exported more manufacturing every year, and are continuing that trend.

This is pretty basic stuff. It's not rocket science or investment derivatives. Add to this the increase in govt spending, & you have a recipe for the collapse of the dollar. We might get some runaway inflation first.. hopefully we would.. that would be a wakeup call to fix things.

We had the little stumble at the housing bubble burst, when imports went way down, but we steadied ourselves, then took another big drink from the deficit jug, & hoped we'd be able to drive the economy, even though we could barely walk.

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