Quote:
Originally Posted by Tonyafd
To those unfamiliar with the Current Account, it is the money that is going offshore to buy goods and services. For a long time now the American Current Account has been minus half a trillion to minus three quarters of a trillion a year. So this is money that is flowing out of the country at an alarming rate.
Who among you understands enough about the Current Account to explain what this means if the trend continues at its current rate.
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Tonyafd, I believe your concern is not with the current account, but rather with USA's great chronic annual trade deficits.
Net balance of international trade is a component of a nation's current account, which is one of a nation's balance of payments' two sides; the other side being the nation's capital account. Individual nations' balances of payments are kept to be effectively at zero.
A nation's annual trade deficit, (i.e. imports of goods and service products exceeding exports) indicate they're consuming more products than they're producing.
Regarding trade deficits. I posted the thread,
Balances of trade understated effect upon their nation's domestic production.
and I'm among proponents of the improved version of a proposal as described within Wikipedia's “Import Certificates” article,
https://en.wikipedia.org/wiki/Import_certificates
Excerpted from
https://www.investopedia.com/terms/c/currentaccount.asp : “BREAKING DOWN Current Account
The current account is one half of the balance of payments, the other half being the capital or financial account. While the capital account*measures cross-border investments in financial instruments and changes in central bank reserves, the current account measures imports and exports of goods and services; payments to foreign holders of a country's investments and payments received from investments abroad; and transfers such as foreign aid and remittances”.
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