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US Exports

ColeTrain
Posts: 4,291
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9/2/2016 3:06:38 PM
Posted: 3 months ago
Overall, US exports have been on a downward trend in the past few years, and really, since the turn of the century. [https://fred.stlouisfed.org...] The the trade deficit recently narrowed 11.6% [http://www.wsj.com...], exports have been patently decreasing over the past few years. Why? What impact does this have on the state of US exports, and what does it mean for the long-term? Is the trade deficit in more trouble, or does July's news bode well for the future?
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NHN
Posts: 624
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9/2/2016 5:39:15 PM
Posted: 3 months ago
At 9/2/2016 3:06:38 PM, ColeTrain wrote:
Why?
Not exports but domestic consumption drives U.S. GDP (https://mic.com...).

That way, the U.S. economy isn't single-handedly bound by the economic growth or capacity of foreign nations.
David_Debates
Posts: 244
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9/2/2016 5:59:53 PM
Posted: 3 months ago
At 9/2/2016 3:06:38 PM, ColeTrain wrote:
Overall, US exports have been on a downward trend in the past few years, and really, since the turn of the century. [https://fred.stlouisfed.org...] The the trade deficit recently narrowed 11.6% [http://www.wsj.com...], exports have been patently decreasing over the past few years. Why? What impact does this have on the state of US exports, and what does it mean for the long-term? Is the trade deficit in more trouble, or does July's news bode well for the future?

I think this is one of the weirdest myths in the economy, that when we trade with other countries with our money, it goes away. Well, this is somewhat true, but where does that US currency go? It can't disappear.
Instead, it is traded by the owner of that currency, whether to a bank that trades different currencies, or traded to a person who wants to buy US products. Essentially, the more we export, the more we will import, and the more we import, the more we must export.
"Trade deficit" is an illusion that Trump wants you to believe in in order for him to enact tariffs on goods from other countries.
Zamzua
Posts: 5
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9/29/2016 4:18:51 PM
Posted: 2 months ago
I'd say the U.S economy is mostly based on debt rather than export. Every year the largest manufacturer in the world , namely China purchases millions of U.S Dollars to stay in debt and therefore keep it's currency virtually under-valued. This way it can keep it's costs low , however that's an entirely other discussion. What's important is to know that the U.S loans several countries it's currency. With the rising demand of USD , the currency stays stable at a point. It'd be naive to reject the fact that manufacturing industries have moved to China and other East-Asian countries and the only reason the U.S is dominant is because of a widely used and demanded currency. However , with the rising use of virtual currencies like Bitcoin , that might soon change...
ptarkington
Posts: 17
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10/3/2016 10:15:41 AM
Posted: 2 months ago
At 9/2/2016 3:06:38 PM, ColeTrain wrote:
Overall, US exports have been on a downward trend in the past few years, and really, since the turn of the century. [https://fred.stlouisfed.org...] The the trade deficit recently narrowed 11.6% [http://www.wsj.com...], exports have been patently decreasing over the past few years. Why? What impact does this have on the state of US exports, and what does it mean for the long-term? Is the trade deficit in more trouble, or does July's news bode well for the future?

American exports decrease because the goods we produce domestically are not being bought by people in foreign countries. This is to be expected since US consumers have higher purchasing power, based on disposable income, relative to other countries. Which is why we're known as the "consumer economy."

The effect this has on "the state of US exports", by which I think you're referring to the effect it has on the trade deficit? To which the answer is, the effect of exports/imports is called our Net Exports. Which is exports minus imports, and is factored in to GDP.

There is really no reason to lose sleep over the trade deficit. Part of the decrease in exports can be attributed to companies choosing to produce their goods in foreign factories, (i.e. outsourcing of production) because those formerly exports have become imports.

The bigger issue is the effect outsourcing of production has on jobs, which appears is being compensated for through self employment and mid size domestic companies. With unemployment at an all time low, extended low unemployment eventually results in increased incomes. Things aren't as bad as Trump thinks.
"Capitalism is the belief the wickedest of men, will engage in the wickedest of dealings, for the greater good of all of us." -Keynes
ptarkington
Posts: 17
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10/3/2016 10:36:19 AM
Posted: 2 months ago
At 9/29/2016 4:18:51 PM, Zamzua wrote:
I'd say the U.S economy is mostly based on debt rather than export. Every year the largest manufacturer in the world , namely China purchases millions of U.S Dollars to stay in debt and therefore keep it's currency virtually under-valued. This way it can keep it's costs low , however that's an entirely other discussion. What's important is to know that the U.S loans several countries it's currency. With the rising demand of USD , the currency stays stable at a point. It'd be naive to reject the fact that manufacturing industries have moved to China and other East-Asian countries and the only reason the U.S is dominant is because of a widely used and demanded currency. However , with the rising use of virtual currencies like Bitcoin , that might soon change...

We are absolutely an economy driven by debt.

China has free reign to purchase US Bonds, as do we for Chinese Bonds. They will always do that, it doesn't make sense for them not to. US Bonds are the safest asset on earth besides cash, or possibly land, I suppose you could make a case that there is always demand for gold... despite the fact it can't be used for anything.

The reason the U.S. is dominant is because they are the largest consumer market in the world. The USD's demand because of it's stability and assurance of repayment. But the same as Foreign countries own our bonds (debt), so do American Businesses.
"Capitalism is the belief the wickedest of men, will engage in the wickedest of dealings, for the greater good of all of us." -Keynes
Zamzua
Posts: 5
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10/4/2016 1:38:00 PM
Posted: 2 months ago
At 10/3/2016 10:36:19 AM, ptarkington wrote:


We are absolutely an economy driven by debt.

China has free reign to purchase US Bonds, as do we for Chinese Bonds. They will always do that, it doesn't make sense for them not to. US Bonds are the safest asset on earth besides cash, or possibly land, I suppose you could make a case that there is always demand for gold... despite the fact it can't be used for anything.

The reason the U.S. is dominant is because they are the largest consumer market in the world. The USD's demand because of it's stability and assurance of repayment. But the same as Foreign countries own our bonds (debt), so do American Businesses.

You said that US Bonds are the safest investment besides Cash. This may seem unrelated but wouldn't you say the emergence of virtual currencies like Bitcoin make them a probable safer investment in the future?