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Technology Stocks : America On-Line (AOL)
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To: Pat Lombardo who wrote (17278)5/16/1999 5:05:00 AM
From: ed  Read Replies (1) of 41369
 
People always get alarmed by the record trade deficit, but they never think about what it means and the way the trade deficit was calculated was never accurate and correct.

We always count the merchandise trade deficit, but what about the investment income from overseas by the fund managers ? by the Multinational US companies overseas? If we count these incomes , the US may not necessary have a trade deficit at all.

Let's say GM invests in a car manufacturer in Korea, and as the cars produced by the manufacturer in Korea sold back to US, this is counted as US trade deficit to Korea,
but GM enjoy the most benefit by investing in that Korea car manufacturers. The Korean only earn the salary by offering the labors !! So, that is the true story about trade deficit, and it may not be a bad thing to the US at all !!!
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