Currently the US has a trade deficit of 40% of the worlds total GDP and China leads exporting with 23% of the worlds surplus. Is there anything wrong with this? I would say no, there is nothing wrong with having a trade deficit because it allows countries like the US to focus on other things other than manufacturing.
Let me give you an example of what I am thinking. The US is one of the leading nations in research and development because we’re a service oriented industry. Our businesses have to come up with new ideas on how to make people’s life easier. Countries like China, Japan, and Germany are able to manufacture these products at a cheaper price and we are able to have the most up to date technology at a nominal fee. The benefit is that the rest of the world has jobs because they’re able to produce things while here in the US we have jobs by providing things to people. Of course there are some things that can’t be made overseas either for security reasons or because of the level of technology of the producing country. If you look at it this way, it’s a healthy redistribution of wealth because everyone benefits without taking from one to give to another forcefully. This is only successful though if our dollar remains strong and the benchmark currency for the world.
The problem with the thinking in the Fed and the Obama Administration is that they think that in order to have a growing economy you must have a trade surplus, that’s actually the opposite from what I’ve researched. I’m beginning to see that they are applying their redistributionist philosophy to the rest of the world just like they’re doing to the so called “rich” here in the US. By devaluing the dollar they are actually leading to the collapse of the dollar which in turn hurts the rest of the world. The only other reason they could be trying to even the playing field is if you listen to these “conspiracy” nuts that claim one world government is being planned in back room deals. The only thing is they are starting to sound more and more sane the more research is done.
In conclusion, the Obama Administration has got it backwards again. By having a strong dollar and paying off our debt, we make products overseas cheaper to purchase. When products are cheaper, then not only do we grow, the rest of the world grows as well. By watering down our money so far, Obama is actually leading to the collapse of this nation and its currency due to failed policies. Get ready for QE3 and QE4 because if QE2 doesn’t completely destroy our dollar the others will do so for sure. Are you ready for a world where you dollar is the weak currency and something that used to cost a dollar is now $15?
**Bloggers note: This research is based upon my research from previous articles which is why I did not put any sources at the bottom this time. If you would like my sources I would recommend that you read “Game over America” and “Federal Reserve Bankrupting America”.