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To: Toddsterpatriot

I saw Thomas Friedman on CNBC yesterday at 8AM. He started talking about how we borrow from China to pay for consumer indulgences such as 62” flat screen TVs. This is sloppy and inaccurate and maybe that’s how I was phrasing things. Many people do/

The USG borrows money from the ChiComs via them buying Treasuries. The US consumer is not borrowing from China. The company that brings in the big LCD TVs is not borrowing from China nor is BestBuy.

Running a huge trade deficit ruins your currency and will ruin the dollar. Huge Federal deficits will hurt the US Dollar. But all this is not as simple as “We borrow from the Chinese to buy their stuff” Which is not true.


84 posted on 12/20/2010 11:38:32 PM PST by dennisw (- - - -He who does not economize will have to agonize - - - - - Confucius)
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To: dennisw
The USG borrows money from the ChiComs via them buying Treasuries. The US consumer is not borrowing from China.

Excellent!

Running a huge trade deficit ruins your currency and will ruin the dollar.

Except for those periods when we run a huge trade deficit and the dollar strengthens.

Huge Federal deficits will hurt the US Dollar.

They'll hurt the economy.

86 posted on 12/21/2010 5:16:40 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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