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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: westpacific who wrote (24865)11/4/2002 12:30:01 AM
From: shadowman   of 74559
 
I'm not sure that I get it? Russell is equating war reparation debt (an obligation on the German government) to a commercial trade deficit. My understanding (limited) of trade deficits is that we as a country (primarily private business entities) import X amount more goods and services than we export. It would appear that most of this is standard commercial activity...if an American importer orders goods for delivery to the US of A, I would expect that (generally) credit is extended by the exporter...and I would assume that the exporter, in most instances gets paid. Where is the unpaid debt? Exporters, like any normal business enterprise, would cut off the credit line at some point if the obligation is not paid..no?

I'm not condoning massive trade deficits...but I don't see where Russell's analogy...unpaid war reparations(government debt)=trade deficit(private biz obligations, which I assume get paid))... makes sense?

I don't see the similarities.

Anyone want to enlighten me?
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