Saturday, December 30, 2006

trade "deficit"?

there is always fear-mongering about our trade deficit. that's the wrong question. even if we buy more goods from others than we sell, it is what you do with it that matters. we have a net trade deficit with China. however, we derive more value for goods we buy from china, than the value china creates with the cash we give them (which is basically to buy US treasuries at low yields, putting capital back in american hands who create far more value again with that cash).

again everyone is obsessed with what is measurable and ignore the intangile values.

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