is that lightbulb part of the trade deficit even though GE would make a lot more money selling it here rather than making it here and selling it here?
Morgy,
good question/point.
Yes, it is part of the trade deficit. Someone on another thread brought up the point that US companies are building up inventory in preparation for any potential disruptions from Y2K overseas.
I suspect this also accounts for part of the rise of the trade deficit (as well as oil imports since the price of oil has increased).
But more than that, it is indicative that US companies continue to have difficulty selling the big ticket items, like airliners, to their overseas markets.
And I read somewhere that China is pushing to have more of their jetliners built in China and that could lead to seeing permanent impacts on the trade deficit.
But it is still uncertain what impact such a large trade deficit plays in an economy where the US dollar rules (knock on wood..:0)
I believe it is similiar to an agricultural, or less developed, state in the US exporting more than they they import from their neighboring states.
Somehow it all works out since they share the same currency.
And your point about a strong dollar being in the best interests of Europe, Asia, and Latin America, you're right on the money there. That's why the BOJ stepped in and intervened 2 times between yesterday and this morning (according to reports I heard on CNBC).
So should the US markets fall, all that money that China, Japan, and other nations have been reinvesting in US securities, will go poof along with our dough.
Again, good question.
Regards,
Ron |
