Downsides of an export economy

[notyoueither]

I can't believe that you still don't understand this. Trade balance represents both the flow of consumer and of capital goods. By sustaining a large, permanent trade surplus (technically current account surplus, but whatever) a country is doing one of three things:

1) Building a stockpile of foreign currency
2) Building a stockpile of foreign debt
3) Building a stockpile of foreign equity/capital goods

Which of those three things do you want Canada to do more than

4) Import capital goods

I can't believe you still don't understand this.

Canada is always going to have a surplus so long as the minerals hold out, and maybe longer depending on what 12 billion people eat for food.

What we do with that surplus is up to the people who generate it. I'm sure some will invest in factories in Regina. Others will buy stock in New York and Mumbai. Still others will invest in movies. Many people will decide to go to ****ing Disney Land for all I care.

The bottom line is that it will be a very different world where Canada does not run a trade surplus over a sustained period of time.

[KrazyHorse]

Yup, you're in full blown buffoon mode again. Have fun with your little mercantilist schtick.

[notyoueither]

If you don't understand why preferring to run a trade surplus is the same as preferring to invest outside Canada rather than inside Canada then I'm afraid you're beyond hope.

That's pure accounting.

I've said nothing about preferring where to invest.

I observe that investing in more advanced production in Canada will only further drive up our trade surplus, since it is very unlikely the world will run out of an appetite for energy, or for food.

[Naked Gents Rut]

Does he even have a shtick? I can't figure out what the **** he's trying to say most of the time.

[rtwinger]

He's full of bull ****.

[KrazyHorse]

I think he might be drunk. Not sure.

His "agriculture and mining are the only real sources of production" thing reminds me of the physiocrats too.

Given a bit more time he might make it through to Adam Smith. I've tried explaining Ricardo to him before, but that's obviously a bridge too far.

[notyoueither]

Yup, you're in full blown buffoon mode again. Have fun with your little mercantilist schtick.

Go blow yourself.

And then explain what happens when we invest in more domestic capacity to produce while demand for what we already do produce does not decline, and that production is basic to life and production in other countries.

[Kuciwalker]

Canada is always going to have a surplus so long as the minerals hold out, and maybe longer depending on what 12 billion people eat for food.

If Canada SPENT ALL OF THE MONEY IT GOT FROM SELLING MINERALS ON STUFF then it WOULD NO LONGER HAVE A SURPLUS.

You could stop having a surplus RIGHT NOW by IMPORTING MORE.

[notyoueither]

I think he might be drunk. Not sure.

His "agriculture and mining are the only real sources of production" thing reminds me of the physiocrats too.

Where did I say that?

[Kuciwalker]

In this case KH is suggesting that y'all import capital instead of iPods or dollar bills.

[Naked Gents Rut]

If Canada SPENT ALL OF THE MONEY IT GOT FROM SELLING MINERALS ON STUFF then it WOULD NO LONGER HAVE A SURPLUS.

You could stop having a surplus RIGHT NOW by IMPORTING MORE.

You might need to dumb this down a bit.

[KrazyHorse]

If Canada SPENT ALL OF THE MONEY IT GOT FROM SELLING MINERALS ON STUFF then it WOULD NO LONGER HAVE A SURPLUS.

You could stop having a surplus RIGHT NOW by IMPORTING MORE.

No, you don't understand. It's very simple.

1) a significant portion of Canada's exports are from primary production
2) ???
3) therefore we will always have a trade surplus

[KrazyHorse]

In this case KH is suggesting that y'all import capital instead of [...] dollar bills.

Then what would I have sex on?

[Kuciwalker]

iPods.

[KrazyHorse]

It's harder to roll a cocaine straw out of an ipod though.