The State of U.S. Manufacturing

Foreign Exchange Daily ^ | October 2nd 2009 | Marc Chandler

[dennisw]

Doesn’t make the trade deficit debt. Try again?.......

You can call it whatever you want but everyone else knows a trade deficit accumulates into debt. You can ask the Chinese if they think our trade deficit becomes a debt

[Toddsterpatriot]

You can call it whatever you want but everyone else knows a trade deficit accumulates into debt.

Accumulates into debt? What does that even mean? Do you imagine it turns into debt?

Does it only "accumulate into debt" if the foreigners buy T-Bills? What if the government balanced the budget and paid off all the T-Bills? Would it still "accumulate into debt"?

What if the foreigners then bought GE bonds with their cash? Would it still "accumulate into debt"?

What if they bought stock instead of bonds? Would it still "accumulate into debt"?

[expat_panama]

So you were right Todd, he’s got a couple miss-toggled dip-switches.

[1rudeboy]

I’m wondering if we should try this angle: say I buy a case of Sam Adams, and Boston Beer Co. takes the profit and buys a Treasury note. Am I contributing to our debt? Is this where the “but the profit stays in the country” thing comes into play?

[1rudeboy]

Australia might not be the best example for you, seeing that it has a merchandise goods trade deficit with the U.S.