[dennisw]

Increasing our rate of saving will reduce the need for capital imports and, correspondingly, will have a positive effect on our trade balance.
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I agree with the above and this is what the Japanese, Koreans, Taiwanese practice. On post #16 you make good points but none of them change the fact that huge trade deficits are bad and will come back to haunt us. The haunting is in the early stages with the Euro being preferred to the dollar as the reserve currency of choice. By the declining dollar with corresponding rise in gold and oil prices. Your price today ($1.65) at the gasoline pump is an early warning

[LowCountryJoe]

By the declining dollar with corresponding rise in gold and oil prices. Your price today ($1.65) at the gasoline pump is an early warning.

The Chinese fix their currency to ours and do not allow it to float. I believe that the exchange rate is 8.4 of their Remimbi [spelling?] to our dollar. We've been wanting them to have their currency float for a long time now because they cut into our export markets through an artificial undervaluing - some estimate it to be 40% undervalued. Could it be that we have an unofficial policy to deliberately weaken the dollar so that the Chinese have to pay more for the items that they import? I don't know what's going on but I'm sure that it's more than meets they eye.