Friday, March 31, 2017

Trump Sends Out Confrontational China Trade Tweets Ahead of Meeting With Xi Jinping

President Donald Trump set the tone for a tense first meeting with Chinese President Xi Jinping next week by tweeting on Thursday that the United States could no longer tolerate massive trade deficits and job losses. Thus, Trump once again displayed his ignorance on the topic of trade and in particular on comparative advantage.
And just to make this clear. A trade deficit is not a problem. Here is Murray Rothbard in one minute and thirty-one seconds on the meaninglessness of the trade deficit:



  1. Sure - so there's no sound money and therefore a trade deficit doesn't impact gold reserves. But you are sending local fiat to buy products from other countries that make their economies go round. Remember, for every dollar of manufactured goods that are imported there are another 1.3 dollars of spin-off activity stimulated in those countries. Okay, those $0.75 Chinese cork screws are nice (except that they last about 1/10 the time of a $3.50 US made cork screw). How about promoting sound money and sound money trade principles?

    1. What do you think foreign countries do with US dollars? They are either spent buying US goods, or spent buying US treasuries (which for better or worse supports a stronger dollar and allows you to buy foreign made goods cheaper).

      Sounds money, of course, should be promoted. "Sound money trade principles" doesn't make any sense. What "trade principles"? People are free to trade with whomever they please - that's the only "trade principle"