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Politics : Ask Michael Burke

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To: Earlie who wrote (73660)	1/14/2000 10:41:00 PM
From: BGR	Read Replies (2) of 132070

Earlie, It is really the same from an accounting perspective. The dollar is just the medium of exchange, in effect the foreigners are exchanging consumer goods for US financial assets. I am surprised that you of all people didn't know this simple equation in international trade! As long as foreigners think that US financial assets are worth more than the goods that they are selling to buy those, the dollar will continue to rule. IOW, a trade deficit doesn't automatically translate to a weak dollar as so many erroneously claim. One has to understand the domestic economy as well (which, incidentally, is doing rather well). -BGR.

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