[Seilehogshell]

In small countries, you can import more than what you export, if you cover that deficit with dollars entering the country thru tourism or foreign investment.

I guess in the USA they cover that with tourism + foreign investment + dollars from other countries brought to the USA by companies with headquarters in the USA

How right or wrong am I?

(I think my explanation does not explain everything, those three things are not enough)

Yanks can always print dollars and the rest of the world will take them anyway

[LINETFAD]

I think selling drugs gives Afghanistan more money than terrorism

[scemHeish]

Originally posted by KrazyHorse


Errr...that's not an explanation. It's a consequence... Wouldn't that be causally explained by the US doing everything to keep oil being traded in USD?

[attlawqa]

Originally posted by Brachy-Pride


Then how does the USA do it?

(import for twice the money they export)
They don't import twice the money that they export.

They import twice the cash value in goods and services that they export.

The balance is maintained by "exporting" capital, basically like "exporting" cold hard cash.

This usually results in the currency of the capital exporting country being depreciated so the situation corrects itself.

[gtyruzzel]

Originally posted by KrazyHorse
The balance is maintained by "exporting" capital, basically like "exporting" cold hard cash.

No.

What happens is that the excess cash is almost immediately traded for US securities, property etc.

The US is not bleeding hundreds of billions of dollars in greenbacks every year. What they are bleeding are capital and financial assets US securities and property are still capital. I said it was basically like exporting cash. The difference is only important when you consider the necessity of expanding the money supply by printing more notes if it wasn't immediately exchanged to other forms of capital.

In any event the currency would still be usually expected to depreciate under such circumstances. The currency is in theory backed up by the capital and financial assets available to the currency issuing country.

[AlissBart]

Originally posted by KrazyHorse
The US is not bleeding hundreds of billions of dollars in greenbacks every year. What they are bleeding are capital and financial assets
Not bleeding. Our capital and financial assets are growing faster than the amount bought by foreign investors/governments.

[Knongargoapex]

Originally posted by Straybow
Our capital and financial assets are growing faster than the amount bought by foreign investors/governments. This is true, but vaguely irrelevant. Exporting capital and financial assets puts a damper on future US growth.

[SeelaypeKet]

And fifth, what on earth do the 235,654 employees of the Department of Veteran Affairs do?

I presume they take care of veterans, esp. invalids. Not according to current reports.......