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You have it completely backwards. We were net exporting post-war, now we're net importing. Imports are benefits; net importing is a good thing if the rest of
by kaonashi 13y ago
You have it completely backwards. We were net exporting post-war, now we're net importing. Imports are benefits; net importing is a good thing if the rest of the world is letting you get away with it.
- adventured 13y agoNo, I've got it 100% spot on. The proof as they say, is in the pudding. By the time the world stops letting you get away with massive debt binging, it's too late and you're screwed. Exactly as we are today. Which is why our central bank has to 'print' in order to fund the government or it would instantly be insolvent. The QE programs are primarily about debt monetization (which is what quantitative easing was always about historically) to keep the Federal Government from collapsing. Net exporting is how you create rapid domestic wealth: you sell manufactured goods to the rest of the world at a profit, and consume less than you earn. Just ask China about their massive increase in national wealth built on the back of net exports.
- kaonashi 13y agoGovernment bonds and currency are different forms of government debt. One yields interest at a rate of the Fed's choosing, one does not. The net effect of swapping the private sector's bonds for the Fed's cash reserves is to remove interest income from the private sector.