How is a trade surplus possible?

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Splitter
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How is a trade surplus possible?

Post by Splitter » Sat Mar 03, 2018 10:34 am

If you export from the US, you’ll want to be paid in US dollars, which can only be created by the US Federal Reserve. If you export $100 billion more than you import, how are your trade partners going to get their hands on the extra $100 billon US dollars needed to buy those exports?

David Redszus
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Re: How is a trade surplus possible?

Post by David Redszus » Sat Mar 03, 2018 2:30 pm

Splitter wrote:
Sat Mar 03, 2018 10:34 am
If you export from the US, you’ll want to be paid in US dollars, which can only be created by the US Federal Reserve. If you export $100 billion more than you import, how are your trade partners going to get their hands on the extra $100 billon US dollars needed to buy those exports?
One source is the sale of crude oil on the world market.

pdq67
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Re: How is a trade surplus possible?

Post by pdq67 » Sat Mar 03, 2018 7:49 pm

Maybe consider, "negotiated barter"??

I don't know??

pdq67

lefty o
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Re: How is a trade surplus possible?

Post by lefty o » Sat Mar 03, 2018 8:24 pm

David Redszus wrote:
Sat Mar 03, 2018 2:30 pm
Splitter wrote:
Sat Mar 03, 2018 10:34 am
If you export from the US, you’ll want to be paid in US dollars, which can only be created by the US Federal Reserve. If you export $100 billion more than you import, how are your trade partners going to get their hands on the extra $100 billon US dollars needed to buy those exports?
One source is the sale of crude oil on the world market.
true, we have more oil than any single other source. we have no need to be importing it. better yet we can produce all we need and still export it.

Splitter
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Re: How is a trade surplus possible?

Post by Splitter » Sun Mar 04, 2018 1:15 am

lefty o wrote:
Sat Mar 03, 2018 8:24 pm
David Redszus wrote:
Sat Mar 03, 2018 2:30 pm
One source is the sale of crude oil on the world market.
true, we have more oil than any single other source. we have no need to be importing it. better yet we can produce all we need and still export it.
What would you accept as payment if it were exported?

Splitter
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Re: How is a trade surplus possible?

Post by Splitter » Sun Mar 04, 2018 1:18 am

David Redszus wrote:
Sat Mar 03, 2018 2:30 pm
Splitter wrote:
Sat Mar 03, 2018 10:34 am
If you export from the US, you’ll want to be paid in US dollars, which can only be created by the US Federal Reserve. If you export $100 billion more than you import, how are your trade partners going to get their hands on the extra $100 billon US dollars needed to buy those exports?
One source is the sale of crude oil on the world market.
Are you referring to the US buying oil, or selling it?

Splitter
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Re: How is a trade surplus possible?

Post by Splitter » Sun Mar 04, 2018 1:27 am

Joseph Heath asserts that a sustained trade surplus is not possible, because eventually the world will run out of your currency and won’t be able to buy anything more from you, until you buy something from them. Balanced trade is the best you can do over the long term.
Milton Friedman suggests that a trade deficit is preferable to a surplus (or balanced trade) because you get goods you can use while your trade partner is left with money, which is basically an IOU note.

Ratu
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Re: How is a trade surplus possible?

Post by Ratu » Mon Mar 05, 2018 1:20 am

You do what China and Russia are doing- exit the US dollar and trade in specie.

F-BIRD'88
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Re: How is a trade surplus possible?

Post by F-BIRD'88 » Mon Mar 05, 2018 3:32 am

Splitter wrote:
Sat Mar 03, 2018 10:34 am
If you export from the US, you’ll want to be paid in US dollars, which can only be created by the US Federal Reserve. If you export $100 billion more than you import, how are your trade partners going to get their hands on the extra $100 billon US dollars needed to buy those exports?

Canadian oil is bought and sold in Canadian dollars. The US buys a LOT of Canadian oil
and buys Canadian Dollars to pay for the Canadian oil it buys from Canada.
Thus the price and demand on oil effects the Canadian dollar quite a bit.
Right now the price of oil is low.
When the US imposes tarrifs on Canadian Lumber, steel and aluminum it also effects the Canadian dollar negatively. This makes the Canadian dollar cheaper thus ALL Canadian products cheaper for the US people to buy.. They then buy more of it (and less US made competing stuff. But Canadians with a lower CAN dollar will buy less US made products (because that US made product becomes MORE expensive to the Canadian buyer. The net result is a LOSS of net trade for USA and that means Your JOBS. Canada is your BIGGEST customer of EVERYthing you make.
And buys more than it sells to the USA. Yet has only 1-10th your population.
Making your US made products more expensive less $$$ attractive to your BIGGEST-best trade $customer$ is a fools errand.

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Re: How is a trade surplus possible?

Post by RevTheory » Mon Mar 05, 2018 7:59 am

I doubt if these tariffs are going to apply to anyone doing business fairly with us.

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Re: How is a trade surplus possible?

Post by sanfordandson » Tue Mar 06, 2018 2:11 pm

RevTheory wrote:
Mon Mar 05, 2018 7:59 am
I doubt if these tariffs are going to apply to anyone doing business fairly with us.
Canada will most likely be spared. But we have a surplus with them. Where we will get hit hardest is by the EU and China.

Anybody ready for another recession? #-o

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