Live data from Hacker News

Why does the U.S. always run a trade deficit?

libertystreeteconomics.newyorkfed.org

811–814 of 814 posts

Re: Why does the U.S. always run a trade deficit?

#811

Earlier quoted context omitted.

What is in the SDR is public information, so if you wanted to track them, it's not that hard. https://www.imf.org/external/np/fin/data/rms_sdrv.aspx Part of the problem with a currency basket is figuring out which currency basket weighting you actually want to use, and maintaining it. USD just exists.

> What is in the SDR is public information, so if you wanted to track them, it's not that hard. The problem is the contents of the basket changes every 5 years. It is trivial to build your own “emulated SDR” just by holding appropriate amounts of the underlying currencies; but the problem is that in 2027 the IMF is scheduled to change the weights of the basket again; that means you may have to execute some (potential…

It’s not that crazy, nearly every USD stablecoin has the same problem.

It does turn you into a bank during the transition period though where you may not be able to redeem all deposits at once.

Re: Why does the U.S. always run a trade deficit?

#812

Earlier quoted context omitted.

Well it's not just that but also the expectation that their wages will increase. The current government is only trying to drop the minimum wage (under the guise of minimum wage earners being losers/leeches which is a strange reasoning) And very few Americans are actually unemployed. The disappearance of manufacturing is a process that started decades ago and most people have moved on to bigger and better things. So w…

> We don't have a two party system (except for the UK which is in a similar situation to the US). The UK does not have a two party system to anything like the same extent the US does. There are 13 parties with at least one seat in the House of Commons and 15 independents. Smaller parties look likely to gain a lot more seats in the next election. > But yes the reasons we're doing better in Europe is that we're not giv…

> Smaller parties look likely to gain a lot more seats in the next election.

That's true but that's more because the "two party system" became a one party system with labour doing the same as the tories. They started to become more different again under corbyn after the disaster of "tory-lite" but now they're right back to their old ways.

> I think it is not that simple. The poorly educated correlate strongly with the poor, who have done badly in recent decades.

Yes but voting right-wing is making them even more poor because the right only think of the poor as a natural resource. Yet they manage to convince them they care. Why would a billionaire care about the poor?? The only reason they became a billionaire was exploiting the poor. The only reason billionaires exist is the huge gap between rich and poor and those are always going to draw the short end of the stick.

If they voted left they would fare way better. Yet the right manages to convince them that the left only wants to take what's theirs. This image is very apt I think: https://pjhollis123.medium.com/careful-mate-that-foreigner-w...

> There are multiple European countries that have parties more extreme than the US right that are growing: AfD, PVV, Fidesz, Rassemblement national etc.

I don't think those are more extreme than the Republicans are now. They are the exact same. I'm from Holland myself and the reason the PVV (and also similar parties like FVD and BBB) is not getting anything done despite being the biggest party now, is that the coalition government waters everything down. The current government is constantly trying to grin to one another while trying to shoot each other in the back. Which is good, because it undermines their ability to do anything. I doubt they will make their full term.

Re: Why does the U.S. always run a trade deficit?

#813

Earlier quoted context omitted.

> GDP PPP That’s not a particularly meaningful metric.

No more no less than GDP. They outline different realities, which are all interesting to analyse as a whole.

PPP on its own is a relatively poor metric and only covers a subset of the economy.

Then when you have semi closed economy like Russia with unclear currency rates (due to external capital inflow/outflow barriers) and convert the figures to USD you can end up with all sorts of wacky numbers

Re: Why does the U.S. always run a trade deficit?

#814
post #552

Earlier quoted context omitted.

> China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).

> Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world). Is there data that backs up this claim? Is this broadly the case? Cause I do know that local brands have been taking over foreign brands recently. Take for example Apple— sales in China plunged 50%, and reports are pointing at Huawei [1], which amongst other things has been making some…

> Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc.

This has nothing to do with PPP, and the fact that you are making this argument means you have no idea what it consists of at all.

If Chinese citizens purchase those products, they don't get them at an adjusted price because they are manufactured in China. They pay the same base price as worldwide, else they buy them secondhand (or, more frequently, bootleg).

Your questions reinforce, rather than dismiss, why PPP is a useless metric outside of base domestic purchase economics (primarily rent and food).

Post reply on HN