Canada may declare a war on US!

[Geronimo]

Originally posted by KrazyHorse


Currency exchange rates. If country A have a trade surplus with country B then A will hold a surplus of B's currency. A isn't buying goods with the money, so either he's buying his own currency back or he's investing in B's economy. Either way, he drives down the value of B's currency relative to his own, making it harder to export goods and services to B...

maybe the US trade deficit phenomena is a result of the unusual status of the Dollar in the worlds economy?

[KrazyHorse]

Yes, partly.

The US dollar is overvalued, and has been for a long time. But as we've started to see, the availability of another reserve currency is starting to allow the dollar to settle lower. What this means for US consumers, however, is that goods are going to get more expensive, while incomes lag.

The US has paid for its past consumption by exporting dollars. Now future consumption is going to be squeezed by past excess.

[KrazyHorse]

Unfortunately for the US, the dollar is still not falling as quickly as it should. The real question is whether or not the correction is going to come as a shock or a gradual slide.

Even if it's a gradual slide, there's still a lot of catching up to do.

Current account balances of ~5-6% of GDP are fairly extreme...

[Ted Striker]

war of 1812

[Geronimo]

Originally posted by Ted Striker
war of 1812

I don't see the connection either to the illegal timber tarriffs or to the trade deficit discussion

[Ted Striker]

n00b

[notyoueither]

Originally posted by Ted Striker
war of 1812

:froth:

[Ted Striker]

[Kuciwalker]

Originally posted by Geronimo


I don't see the connection either to the illegal timber tarriffs or to the trade deficit discussion

clueless

[techumseh]

Originally posted by Ted Striker
war of 1812

We won.

[techumseh]

God, it's almost Pavlovian!