Comments on: The collapse of the dollar and US bonds? - The threat of inflation http://www.capital-flow-watch.net/2009/03/31/the-end-of-dollar-supremacy-and-the-collapse-of-us-bonds/ Conservative economic commentary from the top-down Tue, 18 Oct 2011 09:51:36 -0400 http://wordpress.org/?v=2.9.1 hourly 1 By: Mesothelioma Docshttp://www.capital-flow-watch.net/2009/03/31/the-end-of-dollar-supremacy-and-the-collapse-of-us-bonds/#comment-11203 Mesothelioma Docs Mon, 15 Nov 2010 03:49:23 +0000 http://capital-flow-analysis.com/capital-flow-watch/the-end-of-dollar-supremacy-and-the-collapse-of-us-bonds.html#comment-11203 Very good article and support you continue to write, continue to pay attention ! Very good article and support you continue to write, continue to pay attention !

]]> By: John Schroyhttp://www.capital-flow-watch.net/2009/03/31/the-end-of-dollar-supremacy-and-the-collapse-of-us-bonds/#comment-9539 John Schroy Wed, 29 Sep 2010 19:45:42 +0000 http://capital-flow-analysis.com/capital-flow-watch/the-end-of-dollar-supremacy-and-the-collapse-of-us-bonds.html#comment-9539 I'm not really blaming the trade deficit at all, but rather the failure of the banking system to invest the dollar surplus wisely. Something similar happened in the 1970s, with recycling the dollar surpluses created by the Arab Oil Crisis, but on a smaller scale.I think that having a huge trade deficit is actually a very good thing, if the country has a responsible banking system that deserves the trust of foreign investors and that helps direct these funds to sensible, productive purposes.This line of thinking is spelled out in <a href="http://www.capital-flow-watch.net/category/macro-and-micro-economics/us-trade-deficit/" rel="nofollow">many articles on this site</a> and <a href="http://www.capital-flow-analysis.com/" rel="nofollow">my companion site</a>.It seems I agree with you. I’m not really blaming the trade deficit at all, but rather the failure of the banking system to invest the dollar surplus wisely. Something similar happened in the 1970s, with recycling the dollar surpluses created by the Arab Oil Crisis, but on a smaller scale.

I think that having a huge trade deficit is actually a very good thing, if the country has a responsible banking system that deserves the trust of foreign investors and that helps direct these funds to sensible, productive purposes.

This line of thinking is spelled out in many articles on this site and my companion site.

It seems I agree with you.

]]> By: Stevehttp://www.capital-flow-watch.net/2009/03/31/the-end-of-dollar-supremacy-and-the-collapse-of-us-bonds/#comment-9518 Steve Tue, 28 Sep 2010 22:40:14 +0000 http://capital-flow-analysis.com/capital-flow-watch/the-end-of-dollar-supremacy-and-the-collapse-of-us-bonds.html#comment-9518 Though much of this article is good, you blame the Trade Deficit too much. As Adam Smith points out, a trade deficit is an investment surplus. As long as that surplus is spent productively, it increases the capital of the country and thus increases prosperity. The US was running a trade deficit in Adam Smith's time too, and was highly prosperous relative to Europe.You touch on the actual problem, which is that some of this investment surplus is squandered on too-big houses, excessive financial industry salaries, people who can't pay back their debts, and buybacks of overpriced stocks. Bad loans and bad investment squander capital, reducing prosperity. Though much of this article is good, you blame the Trade Deficit too much. As Adam Smith points out, a trade deficit is an investment surplus. As long as that surplus is spent productively, it increases the capital of the country and thus increases prosperity. The US was running a trade deficit in Adam Smith’s time too, and was highly prosperous relative to Europe.

You touch on the actual problem, which is that some of this investment surplus is squandered on too-big houses, excessive financial industry salaries, people who can’t pay back their debts, and buybacks of overpriced stocks. Bad loans and bad investment squander capital, reducing prosperity.

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