FreshMountainAir,

There is no problem. If you spend $100 and get $100 in good in return, there is no problem. What is the danger of the China not buying as much from the US as the US buys from China? Nothing, there is no danger. It's a scare tactic used by some politicians and the media, there is nothing to be afraid of.

In a really over simplified view...

If a country is viewed as a business...and one looks at the federal taxes, and the state taxes, and the interest on loans owed, the products exported, and all monies coming into that 'business' on one side of the sheet..

Then on the other side of the sheet, one looks at expenditure, state and federal, interest on loans paid...all the outgoing monies...

ANd one finds there business is not doing so well...what happens?

A belt tightening approach?

Looking at the outgoing monies, and where they are going?

Taking into account the deficit on the economy with illegal immigrants, is part of that, yes...

What happens when the 'CEO' of this business is pressuring the 'Board of Directors' to continue spending company dollars on a project, that is clearly showing, it is the major drain on the business's monies?

I know this is a simplified version, but can anyone else see parallels here?

It's a very basic equation
Assets = Equity + Liability

And you have to consider that all Assets are not necessarily as liquidable as their face value.

wow I am going to leave now

Now theres an accountant talking!!

Tell us more please!!!

Also spider in that Asset figure you have a thing called Accounts Receivable.....not all transations are done on a cash basis more of an IOU basis.....If we need that cash tomorrow how much of it are we actually going to be able to get?

Sorry....

FreshMountainAir,

How does that effect the trade deficit? We are purchasing the good to be used, not for resale. We are becoming a service economy, rather than a production economy. That isn't a bad thing, but it means we will be buying products from a lot of foreign countrys.

As long as where I live keeps accepting my money, than its all good!

Tho, I will need a loan to fly to Ireland and kick invisible

FreshMountainAir,

We give them the cash, they give us the goods. They use their cash (which we just gave them) to buy our debt. The dollar inflates, the debt reduces in relative value and they lose money. Nothing negative for the US in that cycle. It's somewhat unethical, but there is no economic downside for the US. I'm not sure about the AR, we are paying cash for the items that are purchased. I agree that they are buying our debt, but as I said earlier, inflation reduces debt, because inflation is good for the debtor.

The difference here spider is that on this thread we were speaking of the American dollar as a whole.....not just specifically trade. And as far as our economy goes A/R has a huge affect on us! As does our liabilities!

The biggest issue I see w/ our trade right now (which is not previously discussed) Is that we as consumers are paying the same prices for goods that are of lesser quality. JMO

Anyway will have to pick this up later.....time to get off work and get my beautiful children

FreshMountainAir,

I got that and that's what I'm talking about. The US dollar as a whole is hurting anyone who is holding debt, but it's a benefit for anyone who has debt. The trade deficit is a lie, it doesn't exist. Jobs are being created faster in the US than in any other industrialized country. Our unemployment is extremely low. Overall, the economy is very healthy and the people who will be hardest hit by the decrease in the value of the dollar will be any foreign body which hold US debt.

Ill go with that spider!

Yet, I wonder how much of that is a temporary facade!

Camouflage, to a sore that lies just below the surface!!!!

Im not real worried about it though.

I know and trust that we are strong enough to survive anything!

What effects we see will be felt ten-fold elsewhere in the world, or absored!

Jess, you hit the nail on the head! A belt tightening is what we need.We need to stop shoring up the little s**t hole countries that beg for our dollars to keep them afloat knowing we will never see a dollar returned and here is the biggie...... Pull our troops out of Europe. Put them on the border at home to keep out the illegals and have the troops put their money back into OUR economy! You are a GENIUS!!!