HOW TO END THE US TRADE DEFICIT IN ONE STEP
By David K. Lifschultz
Compliments of The Lifschultz Organization, Founded in 1899
The current account deficit, or the trade deficit, could not take place unless there were dirty floats, and Professor Paul Craig Roberts misses the entire point by failing to take this into account. The reader can find his comments in footnote one in a Sputnik interview. Let us take Japan as an example. It currently has over a trillion dollars in dollar holdings. These were purchased to hold up the dollar so that Japan could sell their products to the United States cheaper than they were manufactured for in the United States. Even if the Japanese labor costs were half the United States the dollar would have fallen just based on supply and demand wiping out the savings. The more dollars the US created to purchase imports the more that the dollars would fall offsetting the Japanese labor advantage. To prevent this from happening the Japanese bought dollars with newly created yen to hold the dollar up and increase the number of yen in circulation to drive down the value of the yen. This is how the US created an 18 trillion dollar net deficit position in its current accounts and how its internal industries were destroyed.
When my friend Donald Trump was President I wrote him how to end the US trade deficit in one step. It was to advise the holders of US dollars that they were going to sell the dollars driving down the dollar and sending their currencies up to end the trade deficit in one step. And if they did not, the US would buy the surplus country currencies with dollars of all surplus countries driving the prices of all imported goods up in one step. The dollar would fall in value and the yen or euro would rise. The Japanese merchandise would become too expensive to buy and that built in the US would be cheaper. It would be reverse the dirty float. Presto. No further trade or current account deficit. Donald Trump ran with the idea but it was shot down by the deep state.
We recognize theoretically this could be done all at once but practically the upheaval it would create would be unmanageable so we could roll it out over five years.
Who shall we hold accountable for this? Let us call them the rootless, cosmopolitan financiers who hate all mankind some of whose history is contained in the next link. The ruin of the US was planned.
PAUL CRAIG ROBERTS ON SPUTNIK INTERVIEW
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