Problems in International Economy: The Triffin Paradox

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Tom Paine 1949

Tom Paine 1949

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Tom Paine 1949, I’m among the proponents of the improved foreign trade policy described in Wikipedia’s “Import certificates” article; refer to Import certificates - Wikipedia .

The unilateral and substantially market (rather than government) driven proposal would significantly reduce, if not eliminate USA’s chronic annual trade deficits of goods while increasing our annual GDP’s more than otherwise.
For any given extent of a nation’s aggregate purchases, trade deficit nations reduced, and trade surplus nations increased their annual GDP’s more than otherwise; otherwise being if the polarity of their trade balance had been otherwise.

Annual trade deficits indicate that their nation’s annual purchases exceed the value of their entire production; they spent more than they earned. Annual trade deficits are particularly detrimental to their nation’s total numbers of jobs and the purchasing power of employees' median wage.

Nation’s annual trade deficits, similar to lighting cigars with hundred-dollar bills, are practices more easily sustained by those more wealthy.
But annual trade deficits are detrimental to their nations’ economies and to using $100-bills as torches are detriment to the payers' aggregate wealth.

Respectfully, Supposn
Thanks for your comment. At first I didn’t understand, but your link and the Warren Buffet letter really clarified. I think Buffet’s suggestion and the old bill introduced into Congress were ideas whose time, unfortunately, has passed. Technically interesting, but today the problem is so much deeper I doubt there is a technical solution possible. As always there is simply no will to confront the problem.... :(
 

Supposn

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Tom Paine 1949, I appreciate your response.
There’s no politically viable groups advocating a nation enact the proposed unilateral “Import Certificates” foreign trade policy. Import Certificate policy is a solution and possibly the only feasible solution that I’ve encountered.
Prior to the adoption of our United State’s Constitution, democratic-republic was (similar to the concept of import certificates), a little known of concept and those that could conceive of it, did not generally believe it was a feasible method of national governing. Today most economically major governments are democratic republics.

I agree “there is simply no will to confront the problem”; and that’s the major hindrance to a resolving solution of the problem.

USA’s chronic annual trade deficits are the greatest of all nations. Consequentially, our net losses of jobs and lesser median wage rates are greater than those of any other negative trade balance nations. We have the most to benefit from adoption of this policy.
Respectfully, Supposn
 

there4eyeM

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"Money" has never been and can never be anything other than a tool for exchanging one thing someone values for something else someone values. Even gold has no intrinsic value, but only that ascribed by humans.
The implication is that money is not really necessary at all. Only people agreeing on value of life counts. When we have that, we have peaceful exchange of necessities.
 

CrusaderFrank

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I would love to see an end to U.S. balance of trade deficits ...

BUT that is very unlikely to happen so long as the U.S. insists on maintaining its dollar supremacy in world trade. The Triffin Paradox — Triffin dilemma - Wikipedia — means that a country whose currency dominates global trading must almost necessarily run trade deficits. The exception being conditions like after WWII, when there was no serious competition to U.S. products on world markets. The global supremacy of the dollar means we can “monetarize” all our debts, use our fiat money on world markets without limit, exploit weaker economies via keeping them in debt and subservient to our finance capital. It has proven profoundly corrupting of our society, which moreover is addicted to meddling overseas to protect this monopoly and way of life.

Harder work, more education, less Wall Street speculation and crony capitalism, less waste and more institutional efficiency — these are what is needed to improve U.S. competitiveness. MORE not less world economic and financial integration is needed. Less U.S. imperialism. Of course adjustments can be made along the way, tariffs put in place here or there, but dollar supremacy in the end will likely fade, and so will the relative weight of American economic and military power. China and the RMB is not ready to replace the U.S. and the Dollar — and never will be if we act intelligently. But the days of Federal Reserve ability to monetarize U.S. debts unilaterally is coming to an end.

What do you think?
There's a lot of truth in this. Monetization of our debts made if far easier to add new debt. Rinse and repeat.

There are ways to correct it as mentioned, but the band plays on
 

there4eyeM

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I would love to see an end to U.S. balance of trade deficits ...

BUT that is very unlikely to happen so long as the U.S. insists on maintaining its dollar supremacy in world trade. The Triffin Paradox — Triffin dilemma - Wikipedia — means that a country whose currency dominates global trading must almost necessarily run trade deficits. The exception being conditions like after WWII, when there was no serious competition to U.S. products on world markets. The global supremacy of the dollar means we can “monetarize” all our debts, use our fiat money on world markets without limit, exploit weaker economies via keeping them in debt and subservient to our finance capital. It has proven profoundly corrupting of our society, which moreover is addicted to meddling overseas to protect this monopoly and way of life.

Harder work, more education, less Wall Street speculation and crony capitalism, less waste and more institutional efficiency — these are what is needed to improve U.S. competitiveness. MORE not less world economic and financial integration is needed. Less U.S. imperialism. Of course adjustments can be made along the way, tariffs put in place here or there, but dollar supremacy in the end will likely fade, and so will the relative weight of American economic and military power. China and the RMB is not ready to replace the U.S. and the Dollar — and never will be if we act intelligently. But the days of Federal Reserve ability to monetarize U.S. debts unilaterally is coming to an end.

What do you think?
There's a lot of truth in this. Monetization of our debts made if far easier to add new debt. Rinse and repeat.

There are ways to correct it as mentioned, but the band plays on
This is the game that keeps those in power in power.
 

EdwardBaiamonte

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USA’s chronic annual trade deficits are the greatest of all nations. Consequentially, our net losses of jobs and lesser median wage rates
with the trade deficits we had 3% unemployment and that was with 30 million illegals taking our jobs and driving down our wages. Don't let the facts bother you.
 

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