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The trade deficit was $621 billion. Perhaps a third of that returned to the US in investment. So the government should be running a deficit of maybe $400 billion, much of it printed, to keep the economy moving. In fact the deficit was $1 trillion, way more than what is needed.
I don't know of any direct correlation with the budget deficit and the trade deficit.
In the early 1990s the trade deficit was at an all time low since the 1970's, but the budget deficit was still reasonably high
year - federal budget deficit | trade deficit
1991 -$269,238 million | -$31,135 million
1992 -$290,321 million | -$39,212 million
From 1998 to 2001 the federal budget showed a positive balance, while we were running a substantial trade deficit
Federal budget balance in $ millions
1998 +$69,270
1999 +$125,610
2000 +$236,241
2001 +$128,236
There might be some vague correlation there, but I have no data.
I think any two economic entities that are measured in the hundreds of billions to trillion dollars are going to have an impact on each other, but there is not a direct correlation.
Now, many people correlate the increase in printed money with the trade deficit. While the trade deficit is much bigger than the increase of cash in circulation, much of it is the USA buying things from overseas with our own money.
In 1945-1950 the federal reserve notes in circulation changed from $22,867,459,000 to $22,760,285,000 which is basically a tiny, but nearly imperceptible drop. In 1960 federal reserve notes jumped to $27,093,693,000 which is a 1.17% average increase per year, or a rate much lower than inflation. At the time almost no consumers had access to credit cards, and only checks existed as a realistic alternative to paying in cash.
After 1960 the cash in circulation began to zoom and federal reserve notes reached over a trillion dollars $1,034,500,000,000 by the year 2011. That corresponds to about 7.4% per year over 51 year. That a rate is much higher than inflation, GDP growth, or population growth. But during that half century we all got credit cards, debit cards, and PayPal in addition to online payments.
But the bottom line was that our hunger for foreign goods and the unlinking of a connection between cash and gold and silver meant that we increasingly were paying for good and services with banknotes that we print.
For a long time we could produce computers and airplanes and other services to sell to balance out the clothing, furniture and other goods that we buy, but those days are vanishing. Our new billionaires are the likes of Kylie Kristen Jenner, age 21, who is all about consumption.
God help us if the rest of the world no longer wants our $100 bills, and instead would rather have some new note printed by the Chinese.
I think any two economic entities that are measured in the hundreds of billions to trillion dollars are going to have an impact on each other, but there is not a direct correlation.
Now, many people correlate the increase in printed money with the trade deficit. While the trade deficit is much bigger than the increase of cash in circulation, much of it is the USA buying things from overseas with our own money.
In 1945-1950 the federal reserve notes in circulation changed from $22,867,459,000 to $22,760,285,000 which is basically a tiny, but nearly imperceptible drop. In 1960 federal reserve notes jumped to $27,093,693,000 which is a 1.17% average increase per year, or a rate much lower than inflation. At the time almost no consumers had access to credit cards, and only checks existed as a realistic alternative to paying in cash.
After 1960 the cash in circulation began to zoom and federal reserve notes reached over a trillion dollars $1,034,500,000,000 by the year 2011. That corresponds to about 7.4% per year over 51 year. That a rate is much higher than inflation, GDP growth, or population growth. But during that half century we all got credit cards, debit cards, and PayPal in addition to online payments.
But the bottom line was that our hunger for foreign goods and the unlinking of a connection between cash and gold and silver meant that we increasingly were paying for good and services with banknotes that we print.
For a long time we could produce computers and airplanes and other services to sell to balance out the clothing, furniture and other goods that we buy, but those days are vanishing. Our new billionaires are the likes of Kylie Kristen Jenner, age 21, who is all about consumption.
God help us if the rest of the world no longer wants our $100 bills, and instead would rather have some new note printed by the Chinese.
Did you see the movie, "Looper"?
There will always be enough crooks in the world to demand $100 bills.
And there are vast numbers of honest people, businesses, banks and other financials, communities and gov'ts all over the world that still like to hold USD's and USD based debt paper.
There are very few Yuan and/or Yuan based debt/investment paper in the world outside China. And China might like to keep it simple and that way for all we know.
Classical economic theory says that as long as the Federal budget is balanced there is no impact on the economy. What it takes out in taxes it puts back in in the form of Social Security checks, soldiers salaries, highways and fancy new weapons systems. But in the case of the US, there is a constant trade deficit, meaning billions go out of the economy, many never to return. In order to make up for the loss, more must be pumped in. For this reason, the government should run a deficit and print enough to cover the deficit. I know that stating this will lead to a lot of personal attacks, but what do you say?
...But in the case of the US, there is a constant trade deficit, meaning billions go out of the economy, many never to return. ...
A lot of U.S. dollars do return though. When we import tons of stuff from China we pay the exporters in USD. The Chinese exporters exchange the USD into RMB through the government bank, causing the Chinese government to accumulate trillions in USD reserves. Some of it comes back when they buy US Treasuries. They also use dollars when they import stuff from other countries (because almost everybody takes USD). Some of that USD trickles back to the U.S. eventually.
FYI : by definition, money does not include notes or other evidences of debt. Since 1933, no lawful money has circulated in the uSA. Of course, that is why we're under a state of emergency, in case you weren't informed.
See: 12 USC Sec. 411 about "federal reserve notes" and their status as obligations (debt) to be redeemed in lawful money. . . Except that since 1933, Congress will not redeem their notes, 'cause they're BANKRUPT.
A: There was approximately $1.70 trillion in circulation as of January 31, 2019. This figure includes Federal Reserve notes ($1,655.2 billion), U.S. notes ($0.2 billion), currency no longer issued ($0.2 billion), and coins outstanding ($47.2 billion).
U.S. Population = 329,217,343 Estimated $5,042.26 per capita in circulation
Based on the Coinage Act of 1792 - - -
Double Eagle = coin containing 0.9675 ounce (troy) of gold bullion and other alloys. Equivalent to 20 unit dollars.
World supply of gold bullion (est) 5.9 billion ounces. https://en.wikipedia.org/wiki/Gold
183,600 tonnes x 32151 =5,902,923,600 troy ounces
If coined, pursuant to the Coinage Act of 1792, would compute to
● 122,024,260,465.11
● $122 billion dollars
(Silver was demonetized in the Coinage Act of 1873. And since silver is not stockpiled, the only available silver is that which is annually mined and is no remedy for the money drought.)
Fort Knox Depository allegedly holds 147.4 million ounces ($2.9 billion dollars).
- - - - https://en.wikipedia.org/wiki/Financ..._United_States
The financial position of the United States includes assets of at least $269.6 trillion (1576% of GDP) and debts of $145.8 trillion (852% of GDP) to produce a net worth of at least $123.8 trillion (723% of GDP) as of Q1 2014.
- - - -
July 27, 2019
http://www.usdebtclock.org/
The U.S. “Death” clock
National Debt: $22.5+ Trillion (in dollars)
U.S. Federal Spending : $4.452 T (in dollar bills)
U.S. Federal Deficit : $1.034 T (in dollar bills)
U.S. Debt Service : $0.372 T (in dollar bills)
((congress is borrowing more than it pays in interest))
. . . .
Now, boys and girls, can you explain how $1,655.2 billion, in dollar bills, winds up being spent as $4.452 Trillion, or can be lent back to the government to fund deficits?
And do not confuse dollar bills (paper currency - worthless IOUs) with lawful money (gold or silver coin) that the national debt is denominated in.
Where's the gold coin lent to Congress to substantiate owing 22.5 trillion dollars? World supply is only 122 billion dollars (if coined).
. . . .
Go home, nothing to see here, don't trouble your pretty little heads over big scary numbers.
And it is a crime to challenge the validity of the public debt, according to the 14th amendment, USCON.
Last edited by jetgraphics; 07-27-2019 at 12:13 AM..
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