Comments on: Trade Deficit, Budget Deficit, Truth Deficit

By: madkane

madkane — Sun, 26 Jun 2011 20:36:07 +0000

Hi Ames. Thanks for all your thoughtful posts on this topic.

By: Ames Tiedeman

Ames Tiedeman — Sun, 26 Jun 2011 18:24:23 +0000

The United States of America has not had a trade surplus since 1975. We have not had a trade surplus with Japan since April, 1976. Every year since 1983 we have been in deficit with Europe. The last time America had a trade surplus with both Russia and China was a very brief period during the Cold War. We have been running ever increasing trade deficits with South Korea since 1998. Our 1993 trade surplus with Mexico is now a 100 billion a year trade deficit. In the 1970’s, 80’s, and much of the 1990’s our trade deficit was never more than one half of 1% of GDP. We now find ourselves with a trade deficit of between 5% and 7% of GDP depending on how you count. From 2002 to 2007 the trade deficit exploded. The only reason unemployment stayed well under 6% is because of the credit bubble. 63% of all jobs created from 2000 to 2006 were housing or credit bubble related. We did not feel the destructive affects of the trade deficit because of this credit bubble. I have concluded from work I have been doing that America will never get unemployment even under 7% with a trade deficit of over 3% of GDP, without a major credit bubble. The U.S. Economy has actually stopped functioning like a real economy. We literally need a credit bubble to function. America must move from the ideology of free trade to the economic policy of balanced trade. Until this structural shift takes place you can bank on the American economy being the laughing stock of the world economy.

Regards,
Ames F. Tiedeman
Dripping Springs, Texas

By: Ames Tiedeman

Ames Tiedeman — Tue, 05 Feb 2008 01:10:48 +0000

I have seen it all now. 3.1 Trillion from Bush for 2009. The is just nuts. 400 billion dollar deficits for as far as they eye can see. I am disgusted.

By: Ames Tiedeman

Ames Tiedeman — Mon, 07 Jan 2008 04:03:14 +0000

Look, facts are facts. In 1980 we had a trade deficit of 19 billion and a total national debt of about 832 billion. We now have yearly trade deficits of 700-800 billion and budget deficits of 400 billion. Put the dollar back to where it was in 1980 and our trade deficit would be nearing 2 trillion in 2006. It did not work folks. Do you get it yet? It did not work. Wake up!

By: Ames Tiedeman

Ames Tiedeman — Sun, 30 Dec 2007 21:50:11 +0000

The trade deficit is at a 24 month low. Big deal. Does anyone actually think we can live with a trade deficit that is 5 % of GDP?

The dollar may have stabilized. Not for long, however.

http://www.amestiedeman.com/

By: Ames Tiedeman

Ames Tiedeman — Wed, 03 Oct 2007 22:16:17 +0000

The U.S. Trade Deficit is a huge problem. We will either end up being owned by foreigners or we will simply fade away. Both prospects are quite un-
American. Some basic facts: The U.S. has not had a trade surplus with the world since 1974. We have not had a trade surplus with Japan since April of 1976. We stopped having trade surpluses with Eurpoe in 1983. Fifteen years ago we did not have a trade deficit with China. Now we have a 250 Billion a year deficit with the People’s Republic. A nation that does not make anything is a worthless nation. Worse, the longer we go without making the needed investments in our manufacturing infrastructure, the more knowledge we lose. We will either forget how to manufacture or we will simply not be good at it. Our creative energy fades away if we do not use it. Also, it is innate to want to make things. Kids play in sand boxes, youg men build tree forts. This is human nature. All of this is being taken away from the American people by idiots in Washington who do not know how to make trade deals. I may write a book on this topic.

By: dr Jay Veeoh

dr Jay Veeoh — Fri, 28 Sep 2007 02:30:43 +0000

Read Bernanke’s speech in Berlin ! It looks like sheer non sense :”hey,you foreigners , stop saving so much ! ” I think however it was a ,very well masked ,CRY FOR HELP !! Uncle Sam is toast.

By: madkane

madkane — Sat, 22 Sep 2007 18:26:18 +0000

Thanks for your insightful comments, Ames!

By: madkane

madkane — Sat, 22 Sep 2007 18:26:15 +0000

Thanks for your insightful comments, Ames!

By: Ames Tiedeman

Ames Tiedeman — Sat, 22 Sep 2007 13:18:43 +0000

Bernanke has a big job ahead of him.
We cannot sustain 800 bilion a year trade deficits. We cannot export our way out of this mess. The only answer is a sharply lower dollar to drive manufactruing home and to lower the trade deficit. The dollar has much farther to fall. What you are seeing is a long term effort (it will take 20 years) to get the trade deficit back under 1% of GDP. We are currently running a trade imbalance of nearly 6% of GDP. No nation can do this. The IMF would be stepping in to help any nation if its trade imbalance went to 6% of GDP becuase its currency would collapse! The U.S. is different, but still, we cannot sustain a trade deficit of this magnitude. People must understand that when we buy an item from say China, we pay in dollars. The Chinese company we just bought from them goes to an Exchange Bank in China and converts those dollars to Yuan. The Chinese banking system (Chinese Government) is now sitting on those dollars. They can either 1, buy oil, 2, buy Treasuries, 3. buy U.S goods, 4. buy U.S. Corporations, 5. other. Over time if we (the U.S. ) continue to run a trade deficit we could simply be completely bought and controlled by foreigners. Warren Buffet has explained the situation as being like a rich Texas farmer who loses a small piece of his land year after year and never notices for a while. When he then notices, tragedy sets in because he no longer controls his land. So in sum, we need to get the trade deficit way down. This is why the Fed has abandoned the dollar. It wil be going down for the next 20 years. That is how long it is going to take to correct this imbalance mess.