Norman
Diamond Member
- Sep 24, 2010
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- #21
You are not reporting something or else it has been misreported to you. X-M = Gs+ Cs +Bs. X=exports, M=imports, Gs= Government surplus, Cs= Consumer savings and Bs= retained earnings of businesses. X-M is also the trade surplus by definition.I just wanted to know this, because I live in scandinavia, and well I just watched a video where a politician says we should hyper inflate (which is nonsense in any case BUT).
Our country has always had trade surplus so, I wanted to know if our country as a whole owes stuff to other countries, as the government(and consumer) has pretty good pile of debt.
Like US for example has huge trade deficit and huge debt to china and some other countries.
There is small difference, because if you own your own debt, it means you got savings, if you don't... it could mean you are way more broke.
So for our country if europe would super inflate, our savings would be wiped and the other countries debt to us would be wiped. So obviously it's not a good deal for us at all.
Yeah, that's a other way to do it. So even if the government has these deficits, it's the business surplus plus savings that keeps our trade balance and external debt in check. (And btw what do you mean I haven't reported everything?). In US on the other hand the business earnings are not covering the government deficit and the change in savings.
So the answer to my quetion is again; yes, hyper inflation would "benefit" the countries like spain that have external debt while obliterating our savings and economy.