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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: NOW who wrote (207817)12/4/2002 12:28:24 AM
From: Perspective   of 436258
 
Sorry, but you must have *something* of value to trade for those imported autos, VCRs, clothes, shoes, computers, plasma TVs, etc, etc. We can swap funny money Clownbux for our own services at what ever ridiculous multiple of reality we desire, so long as we don't need to depend on importing anything of value.

Gee, do ya suppose our $500B current account deficit might constitute "importing anything of value" ?

Ya know one thing I realized the other day? That while having an overvalued dollar increases domestic demand for foreign products, it actually reduces the trade deficit for a fixed level of trade. Think about that for a second. While a collapsing dollar makes imports more expensive and could reduce net unit imports, for a fixed level of international trade, a weaker dollar means a *higher* current account deficit.

BC

BC
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