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Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

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Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#31
post #3

The salient part: > The time to halt this trading of assets for consumables is now, and I have a plan to suggest for getting it done. My remedy may sound gimmicky, and in truth it is a tariff called by another name. But this is a tariff that retains most free-market virtues, neither protecting specific industries nor punishing specific countries nor encouraging trade wars. This plan would increase our exports and mig…

This is basically introducing a second US currency and mandating that it must be used for international trade. Having different currencies for internal vs external trade isn’t usually something I associate with prosperous countries.

[deleted]

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#32
post #28
post #3

The salient part: > The time to halt this trading of assets for consumables is now, and I have a plan to suggest for getting it done. My remedy may sound gimmicky, and in truth it is a tariff called by another name. But this is a tariff that retains most free-market virtues, neither protecting specific industries nor punishing specific countries nor encouraging trade wars. This plan would increase our exports and mig…

I don't know if strict import control is a good idea. Look up license raj in India. It also added a lot of opportunities for corruption.

Yes, but that was because it was a license based system and a lot less transparent than the IC idea.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#33
post #20

Buffett has been aggressive selling stock in the last year ($134 billion total in 2024) and Berkshire is right now sitting on $334 billion cash vs $272 billion in equities. Kinda funny because he's the first one who will tell you "don't time the market", but he definitely timed it to perfection. "Be fearful when others are greedy and greedy when others are fearful".

he says so because he is able to do it with some good degree of accuracy and knows how hard it is

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#36
post #14

Earlier quoted context omitted.

Over 90% of the trade deficit is attributable to China, the EU, Mexico, Vietnam, Taiwan, Japan, South Korea, and Canada. These are big, diversified economies. Nobody is focused on Cambodia.

Cambodians are, and they were just hit by a 49% tariff, one of the highest applied to anybody.

Yes, that is stupid. Why not apply that to the big economies that the GP comment said was 90% of the deficit. Exempt small low income countries - save a lot of people a lot of paid at little cost.

On the other hand this is a bargaining tactic. I do not think these tariffs will last.

> Instead, recall that President Trump views tariffs as generating negotiating leverage for making deals. It is easier to imagine that after a series of punitive tariffs, trading partners like Europe and China become more receptive to some manner of currency accord in exchange for a reduction of tariffs

https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese...

And look who wrote it

https://en.wikipedia.org/wiki/Stephen_Miran "

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#37
I don't agree with how it's being done -- it makes Biden's Afghanistan exit look well planned and executed -- but the trade stuff is one of the few areas where I have some overlap with MAGA. My preferred approach would be more careful, gradual, selective, and, well, well-executed, but it's very clear that blanket free trade with no standards and no reciprocity has hollowed out the country.

I mean... if we are going to have the EPA and environmental standards, then it stands to reason that we must tax imports from countries that do not. Otherwise we are just moving the pollution elsewhere while burning even more fuel to ship products here. Right? It kind of shows that a lot of environmentalism is just NIMBY-motivated. It's fine if we trash other peoples' back yards. But a lot of our big environmental problems are global, so not only is this hypocrisy but it doesn't work.

It's good that we have workers' rights and OSHA, but the same logic applies. Otherwise we are just exploiting workers elsewhere.

On a somewhat tangent... I find it kind of disturbing that the one area where I have some agreement with MAGA is the least popular and most roundly criticized MAGA policy, and the one most likely to result in an electoral defeat.

Most of the other stuff in MAGA -- isolationism, a love for strongman rule (at home and elsewhere), authoritarianism, cults of personality, misogyny, racism, etc. -- is stuff that I find horrific, but the only thing people really care about is short term economic outcomes.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#38
post #20

Buffett has been aggressive selling stock in the last year ($134 billion total in 2024) and Berkshire is right now sitting on $334 billion cash vs $272 billion in equities. Kinda funny because he's the first one who will tell you "don't time the market", but he definitely timed it to perfection. "Be fearful when others are greedy and greedy when others are fearful".

Well Trump was favored to win by a decent margin months before the elections and he's doing exactly what he said he'd do. I pulled a lot of money out last fall. This wasn't that hard to predict. The hard part is how far down is the bottom.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#39

This whole balancing the trade deficit is utopia. I will just give a small example using black leather jackets. Black leather jackets are indestructible, you can spill any sort of fluid on them, try to light them on fire (they won't catch fire) throw them in the dirt etc. They never go out of style either, there is basically no reason why an adult should own more than one black leather jacket. Now think of how many b…

I've never owned a black leather jacket and I don't think I know anyone who does.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#40
post #9
post #7

Earlier quoted context omitted.

I am not sure this would haves worked since the return of the US stock market was quite high (due to that constant influx of foreign investment notably) compared to any other asset for people/businesses that wanted to invest their profit. Also due to the reserve nature of the USD the dollar and international trade mostly done in USD there is a huge demand for dollars keeping it strong compared to other currencies. Th…

> Also due to the reserve nature of the USD the dollar and international trade mostly done in USD there is a huge demand for dollars keeping it strong compared to other currencies. This fundamentally is at odd with an export driven economy. What if the Dollar weren't the world's reserve currency, either due to deliberate policy by the U.S., or the inevitable fact that the U.S. economy will shrink as a share of the wo…

If the USD ceases being the reserve currency, inflation goes up. Fed's neutral rate of interest 2% = the floor of inflation rate. For the third world countries, the natural interest rate = Fed's interest rate (or American inflation rate) + the local inflation rate. That's why third world countries pay more interest rate s in their own currencies; that's why they want to borrow in USD.
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