Fed Can Print Money, But It Can't Print Jobs

IBD ^ | 04/17/2014 | Alan Reynolds

[Cringing Negativism Network]

Cringing Negativism Network buys $440 Billion of stuff from 1010RD. I never buy anything from you. Where’s the imbalance?

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We are so in disagreement, I do not even know how to answer you.

China is rapidly replacing America in the world.

China now exports more than America. Already, let me say that again: China exports more than America.

Go in (any) store anywhere in any state, in any county, in any city, any town, and neighborhood in America.

Anywhere. Find something you like. Pick it up and see where it is made. Odds are very good is will say “Made in China”.

China imports practically nothing.

Americans cannot buy or own businesses or land in China as primary investors.

We are completely sleeping.

Completely.

[1010RD]

Let’s first get our terms defined before any disagreement.

Is there a “trade deficit” between us in my example?

[Cringing Negativism Network]

OK. I believe we have found a point of agreement.

I would say yes, there is a (massive) trade deficit in your example.

318 billion, at the moment.

[1010RD]

I used $440 billion, but we can use your figure of $318 billion. So just to refresh our memories, I bought $318 billion worth of goods from you. You gave me the goods and I gave you 318 greenbacks, your exact asking price.

Now you’re happy with the money and I am happy with the goods. There isn’t any deficiency unless you believe that all trade must be reciprocal. That is you butcher, car dealer, tailor, grocer and etc. must buy from you in order to sell to you. Do you see the impossibility of that? It isn’t even necessary.

In our example above regarding the $318 billion exchange, which one of us is impoverished by the trade?