How does U.S. Trade Imbalance Affects Global Economy (Part I)

[Cinvalo]

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Do you know U.S Trade Imbalance is one of the biggest short term gift but long term threat to the global economy? This is one of the main reasons why you see China had reached an unprecedented level of prosperity. The Chinese prosperity heavily relies on exporting goods to U.S. in return for its Bonds, its IOUs. (Please refer to my previous article for more details on IOUs). It heavily depends on U.S.continuously borrow from the future and indebt to the rest of the world. If USD is to remain as the world reserve currency, U.S. will continue to run huge trade deficit indefinitely and China will also run a trade surplus as a result. This dilemma would not have happened under a free market society.

Do you know where does the prosperity of the Chinese Economy came from? Do you know why U.S. is allowed to run huge trade deficit to the rest of the world? More importantly, how this will affect you if this dilemma continues? I have written a simple article to explain how this destabilize the global economy. Please enjoy

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