An economic podcast I listen to has covered how much foreign investment the US net trade imbalance has led to, for exactly that reason: foreigners had dollars from US entities buying more stuff than they sold, those dollars had to come back to the US, and investment ended up being a huge way that happened. If the trade imbalance actually reduces, likely that investment rate will be the first thing to drop. We’ve already seen hints of it with softened demand for Treasury bonds.
The entire “the Dollar being the reserve currency of the world” thing happened because of the US trade deficit.
It has been slowly reversing since the pandemics, and a lot faster now… What ironically means that whatever exports numbers those companies are getting, it’s inflated and unsustainable.
An economic podcast I listen to has covered how much foreign investment the US net trade imbalance has led to, for exactly that reason: foreigners had dollars from US entities buying more stuff than they sold, those dollars had to come back to the US, and investment ended up being a huge way that happened. If the trade imbalance actually reduces, likely that investment rate will be the first thing to drop. We’ve already seen hints of it with softened demand for Treasury bonds.
The entire “the Dollar being the reserve currency of the world” thing happened because of the US trade deficit.
It has been slowly reversing since the pandemics, and a lot faster now… What ironically means that whatever exports numbers those companies are getting, it’s inflated and unsustainable.