This is what happens when you run colossal trade deficits. And you “free trade” idiots — don’t bother me.
A trade deficit is only possible, if our check bounced, or their ship turned out to be empty, after we paid them. When a trade is consumated, at that time, it is exactly fair. Each party has agreed to the exchange. Unless of course fraud was involved.
The reception of cash, leads to something being done with the cash. In this case, the Chinese bought piles of our subprime loans. Mortgage pools are not counted as trade, but boy would I be pissed if I had a pile of those right now!
The Japanese, if what you say is true, should have turned out very well after the late 80’s. My silly explanation above, is why they lost, and we won. The decision of what to do with the cash, is the remaining part of the trade. Seems that these mass exporters never really understand how to handle the money...
Um, sorry to bother you, but just exactly are you worried about?
The dollar's dropping, American exports are increasing, imports are going down and inflation in the States is negligible.
If this is what happens when "you" run colossal trade deficits, then I'm all for them.
What are we supposed to do? Hold a gun to the heads of foreign countries and MAKE them buy stuff from us that they can get elsewhere for half price?
Economic simpletons amuse me.