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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 422.21+1.9%4:00 PM EST

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To: elmatador who wrote (93511)8/14/2012 2:11:35 PM
From: carranza2  Read Replies (2) of 219262
 
Assume the formula E - I= T

where E is exports, I is imports and T is surplus.

Which is economically more significant?

This:

E=100, I=80 and T therefore is 20

or this:

E=40, I=20 and T therefore is also 20.

Both Ts are the same so you would think that it makes no difference, and that is what you think, but you would be wrong because higher E in example number one means more people at work, higher employment, more money flowing, more taxes, probably more velocity of money, etc. despite the fact that in both cases T=20. This is especially true in China's case because the I part of the equation is made up of a significant amount of imported raw materials which need to be transformed, manufactured, etc.
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