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Stable Genius Once Again Picking Winners and Losers

Discussion in 'News & Current Events' started by InTheLight, Mar 1, 2018.

  1. InTheLight

    InTheLight Well-Known Member
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    Where are you getting these definitions? A consumer economy is one where a major portion of the GDP is derived from consumer spending. We are, and have been, a consumer economy. Whether or not we run a trade deficit has nothing to do with it.
     
    • Agree Agree x 1
  2. Reynolds

    Reynolds Well-Known Member
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    I am saying the market rose too much and too fast.
     
  3. Reynolds

    Reynolds Well-Known Member
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    What you just said fully agreed with my definitions. Trade deficit very heavily effects the long term economy and GDP. Think about it.
    (X-M) As X is long term drastically exceeded by M, then C is going to begin to head down drastically over time. I will also drop. G will probably increase due to inflation. Trade deficit is a long term recipee for economic ruin.
     
    #43 Reynolds, Mar 2, 2018
    Last edited: Mar 2, 2018
  4. InTheLight

    InTheLight Well-Known Member
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    No, sorry. You said the definition of a consumer economy was on that consumes more than it manufactures. That's incorrect.
    Then you said we are a consumer economy because we run a trade deficit. That is also incorrect.

    According to economic theory trade deficits are supposed to be detrimental to a nation's economy. However, the US is the world's largest economy and it's currency is a world standard. As such, trade deficits don't really harm us too much.
     
  5. Reynolds

    Reynolds Well-Known Member
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    No. You really are a smart man. Look into why our trade deficits have not hurt us YET. The answer is China is buying T Bills at virtually no interest to offset the massive deficit we run with them. Its all a massive shell game. Its a con. In the long run, China will begin to either demand real interest, or begin to sell. Either way, the U.S. economy goes in the toilet.
    You consume more than you make, you are a consumer nation. Run through all the formulas in the definition, and it boils down to that. Trade deficit is the number that easily identifirss production vs consumption.
     
  6. KenH

    KenH Well-Known Member

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    The way to eliminate the trade deficit is to lower the standard of living of the middle class and those on lower and fixed incomes through higher prices. Just try running for election or re-election on that platform after that was implemented and those folks that felt the impact.
     
    #46 KenH, Mar 3, 2018
    Last edited: Mar 3, 2018
  7. InTheLight

    InTheLight Well-Known Member
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    What? The US debt has little to do with the trade deficit. The US is in debt because they spend more money than they take in. They finance their debt by selling T-Bills (and T-notes, and T-bonds.) You will need to explain the linkage between US businesses importing more goods than they export and the US continually running a budget deficit and running up the national debt. What is the relationship between US debt and the trade deficit?

    Nope. China is content with buying US Treasuries because they need a safe place to park all the profits they are getting from selling cheap stuff to US consumers. Also if US Treasuries are low priced (meaning they don't pay higher interest than other countries bonds) that's an indication they are safer. Buying up US bonds fortifies the fact that the dollar is a strong currency. If the dollar is a strong currency it is worth more than China's currency, meaning China's products are cheaper for US consumers to buy with US dollars.

    Keep repeating it all day and all day tomorrow--won't make it true. A consumer nation is one where the consumer's purchases drives the majority of GDP. (You say "consumer economy" as if it is a bad thing. You have yet to show that it is so.) Running a trade surplus does not mean a country isn't a consumer economy.

    Google "countries with a trade surplus" and tell me if they have a fabulous economy. Or if you'd want to live there.

    I can't think of many first world countries that are NOT a consumer economy...

    Saudi Arabia is not a consumer economy, it is a producer country. They produce crude oil. It drives their economy. I suppose China is not a consumer country. They don't have a large enough middle and upper class to make per capita purchases a majority of their economic activity. I suppose China is still considered an agricultural economy. Not for long though.







    Sent from my Nexus 7 using Tapatalk
     
    #47 InTheLight, Mar 3, 2018
    Last edited: Mar 3, 2018
  8. Wingman68

    Wingman68 Active Member

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    And where is the market, even with this decline, since Trump took office? I am offended by your title of this thread. Guess that makes it hate speech. Heh.
     
  9. InTheLight

    InTheLight Well-Known Member
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    I don't know why you would be offended by the title. Trump has referred to himself as a "stable genius".

    As far as the market rising, I'm very happy it has risen under Trump's policies of tax cutting, regulation cutting, and generally a pro-business stance. However, a tariff on steel and aluminum is going to be seen by the stock market as a bad move and the decline of the markets confirms it.
     
  10. Reynolds

    Reynolds Well-Known Member
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    You still are missing it. China buying T Bills negates the effects of a trade deficit. We are not a safe place for them to park anything. The only way we could pay them back would be to hyperinflatr currency. Look at the GDP formula. Its obvious if you think a little outside the box. China makes profit from us. They loan the U.S. govt. the money back. The U.S. govt. spends it. What then happened to the deficit deduction in the formula?
     
  11. KenH

    KenH Well-Known Member

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    "Three cheers for all the Trump supporters in Tennessee! This one is on you.

    The Swedish appliance company, Electrolux, is the largest appliance maker in Europe. They had planned to invest $250 million in Tennessee.

    Jobs! Jobs! Jobs!

    But, alas, notice I said they had planned that investment.

    According to Business Insider, on Friday, the company announced that something had changed."

    - Trump Tariff Fallout Claims Its First Victim
     
  12. InTheLight

    InTheLight Well-Known Member
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    Please explain the mechanics of how this works. A foreign country buying US debt does not counteract the trade deficit.

    First explain where is the trade deficit in this formula and then I will take a shot at attempting an explanation.
     
  13. Reynolds

    Reynolds Well-Known Member
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    You don't know the GDP formula? If you do not know the GDP formula, why are you even in this discussion?
     
  14. InTheLight

    InTheLight Well-Known Member
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    The trade deficit is a minor player in the United States GDP formula.

    You're evading my question. What is the link between government debt and the trade deficit?
     
  15. Reynolds

    Reynolds Well-Known Member
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    The Link between U.S. Govt. debt and the trade deficit is pretty obvious. Our trade deficit with China is for the most part loaned back to the U.S. Government. That virtually no interest loan allows the U.S. Govt. to be more financially irresponsible and spend more money that we do not have. Its kind of like giving an abundant, cheap supply of crack to a crack head.
     
  16. InTheLight

    InTheLight Well-Known Member
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    So are you saying if we did not have a trade deficit with China we would not be selling them Treasuries?

    Sent from my Pixel 2 XL
     
  17. Benjamin

    Benjamin Well-Known Member
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    Yeah, I agree, let’s just let the unfair trade practices continue. Not just steel and aluminum, but all the products across the board which the norm has become to be okay to heavily tax going out but not in despite the damage it does to our economy. Never mind we become a country that can’t produce the steel it needs, even for defense, who needs self-reliance anyway? Yeah, that Trump, he must be a real idiot of a businessman to think we need to straighten this mess out that has steadily brought down this country and to not be afraid of retaliation.
     
  18. KenH

    KenH Well-Known Member

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    For military purposes the best way to handle steel requirements would be to directly subsidize the military’s supply of steel through the military budget.
     
  19. Reynolds

    Reynolds Well-Known Member
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    No. They would not be able to afford to buy them.
     
  20. InTheLight

    InTheLight Well-Known Member
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    How much steel does the US use per year?
    How much is imported per year?
    How much of our steel is imported from China?





    Sent from my Pixel 2 XL
     
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