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Yes… but these Portugese bricks have to be somehow better, in some aspect, than French bricks, for them to be traded in the first place. Be that quality, quant
by MichaelZuo 2y ago
Yes… but these Portugese bricks have to be somehow better, in some aspect, than French bricks, for them to be traded in the first place.
Be that quality, quantity, availability, pricing, etc…
Eventually Portugal will exhaust all it’s bricks, and future brick opportunities, that are better in some aspect, relative to French bricks and French future brick opportunities.
And when that happens with every possible thing and opportunity in Portugal, relative to French things and opportunities, then the trade deficit naturally disappears.
- chucke 2y agoYou're focusing on the quantity aspect of the metaphor. Reinvesting can not mean only more bricks, but also better. But quantity also may helps sell them cheaper than your competition.
- MichaelZuo 2y agoIn any possible scenario, be it quality, quantity, and so on, there has to be some advantage of some kind for the trade to happen in the first place.
- s1artibartfast 2y agoof course, It can be cheaper to import foreign goods than making them at home. Thats almost always the case with trade deficits. That is beside the point of what the long term consequences of running a trade deficit are, if they are sustainable, and how currency exchange impacts these factors.
- MichaelZuo 2y agoWhy do you think it’s besides the point?
- chucke 2y agoChina can produce most things cheaper than anyone. Economically, it's pointless to compete with them. However, if too many think the same, you get bottlenecked and compete for access to the supply, which raises prices. You bevome also politically subservient to China.
- s1artibartfast 2y agoValue and wealth are not zero sum. It isnt just traded back and forth. It is produced Humans create new value through labor. It is a renewable resource and you don't run out.