Re: US on the rocks. Rank Order - Current account balance

On Feb 29, 7:27 pm, goodsoldierschweik <goodsoldierschw...@xxxxxxxxx>
wrote:
On Feb 29, 6:17 pm, Tchiowa <tchio...@xxxxxxxxxxx> wrote:





On Feb 28, 7:10 pm, goodsoldierschweik <goodsoldierschw...@xxxxxxxxx>
wrote:

On Feb 28, 6:34 pm, Tchiowa <tchio...@xxxxxxxxxxx> wrote:
No. That does not follow.

2 problems with your logic.

1) If the countries that collected the money held the money that would
be true. But in fact the countries (like China) are returning most of
the money in the form of investments. So the money comes back.

2) The domestic money supply can be increased if wealth is created.
Again, a powerful domestic economy solves that.

You are rationalizing.

First, we are talking about current accounts. There is no guarantee
that a country with a positive current account must/will invest in a
country that has a negative current account, thus your first statement
is simply pie in the sky.

No, there is no guarantee. But in fact that is what is happening. It's
not pie in the sky. It's today's reality

But you set forth that the coountry with the positive balance WOULD
invest in the deficient country.

Really? I thought I said: "*IF* (emphasis just added) the countries
that collected the money held the money that would be true. But in
fact the countries (like China) are returning most of the money in the
form of investments. So the money comes back."

So I specifically postulated a possibility then pointed out that, as
of right now, that is what is happening.

Now you admit that it isn't guarnteed but is happening.

No, it's what I said originally. See words quoted above.

But you neglect that if a better investment were to
arise the money would no longer flow back to the deficient country...

And that's the point. There is no better investment than the US.
That's why the money flows back.

Secondly, when you state that China is "investing" in the U.S. what is
actually happening is that they are buying bits and pieces of the U.S.
and thus accelerating the speed with which money flows out. i.e., if a
foreign country buys, say, 10% of Company 'X" it simply means that 10%
of company X's profits flow to the foreign company rather then into
the local economy; in addition to the positive balance of payments it
enjoys from their export/import trade.

So? That doesn't create debt. Money flows. That's a *GOOD* thing. A
*VERY* good thing.

You apparently know little about stocks. Stocks are offered for sale.
someone buys them. The only way that the foreign would add anything to
the pot is by buying a stock that domestic buyers wouldn't buy.

???? I hardly know where to start. Companies are issuing new stock all
the time. If foreigners buy them then they are putting cash back into
the US economy.

Quite frankly it is rather futile to discuss economics with you. you
apparently don't understand economics; don't listen to economists and
don't want to learn.

In short, you remind me of little David who was taking part in a
parade. His mother, watching the parade, proudly pointed out her son,
"Look! that's my David and look, everyone is out of step except
David".

Actually that apparently applies to you. The US has been running a
current account deficit for decades. And it's economy remains the
biggest in the world and continually getting bigger. In absolute terms
it is growing faster than any other economy.

Don't bother to answer since it is obvious that God has a great sense
of humor because he created  idiots like you, to entertain everyone
else, and it is a waste of my time to discuss a serious subject with a
fool.

Hanging out with Chabby, are you? ;-)

I'm sorry that you don't understand. Do yourself a favor and take a
course in economics.




cheers

.- Hide quoted text -

- Show quoted text -

.

Relevant Pages

  • Re: Refuting supply-side economics
    ... > sharks will get their money back one way or another. ... The US economy will be ruined when the loan sharks refuse to ... Both help a nation to increase its productivity in the ... The US benefit greatly from the British investments in the US ...
    (sci.econ)
  • Re: Question Time: Those who supporting the BNP by "opposing it"
    ... In any country that is still in the sort of economic ... The thing is, when people do sell up and leave Britain, they take their money ... move away and buy a house in another ... UK economy to the other country's economy. ...
    (uk.media.tv.misc)
  • Re: Deficits no concern?
    ... payoffs for executives and stockholders if we pump federal money into their ... assets and the debt is cancelled. ... Or you hedge your investments in other ... real economy, ...
    (rec.crafts.metalworking)
  • Politicians squabble as country goes down the drain
    ... When the country is facing economic slow down, our politicians are troubling ... It is only money unwisely spent without any viable returns? ... economy and public facilities. ...
    (soc.culture.malaysia)
  • Re: how to compare living standards
    ... How much more "improvement" can the US economy stand? ... borrow to spend money now that you don't have. ... best "investments" I made in my life. ... Is that any way to protest a tax cut? ...
    (sci.econ)