Are you ready for an economic revolution?

Answers:0   |   LastUpdateAt:2012-10-17 02:25:31  

Asked at
A sustainable model for global trade to avoid debt crisis MedlinePlus MedlinePlus Our current model of foreign trade is direct payments for goods and services, which creates problems with trade imbalances that can lead to a debt crisis. Some developed countries such as the U.S. has a chronic trade deficit, because the high standard of living for most industries uncompetitive in the global economy. This chronic trade deficit generates an outflow of money from the nation of consumers, which inevitably leads to a crisis of consumer debt and the nation must continually borrow money from other countries to maintain this constant flow of money. MedlinePlus MedlinePlus The simple solution to this is to simply eliminate the idea of ​​using debt to sustain a persistent trade deficit. Instead of lending money to the nation of consumers, foreign nations simply can make a free transfer of money to the nation of consumers, to keep the flow of money without creating debt. This creates a close economic link between the producer and consumer of the nation, without the restriction of trade resulting from the country's ever-growing consumer debt. MedlinePlus MedlinePlus As absurd as it sounds, is preferable to the alternative. These foreign nations depend U.S. to provide a market for its exports. These exports pay the salaries of their workers and pay benefits to business owners who employ workers. If the U.S. is unable to maintain persistent trade deficits, these wages and benefits come to an end. So in the interest of exporting nations to gratuitous transfers of money to the U.S. to create a sustainable flow of wages and benefits to its export economy. MedlinePlus MedlinePlus If this model is adopted, the results will be devastating. Finally, the consuming country may go bankrupt. Or, the natural market forces will eventually devalue the currency of the consumer until they simply can not afford to be a consumer country any longer, and brute force of the free market will force balanced trade. The worst case scenario would be that the consumer nation to impose tariffs on imports or start printing money to accelerate the effects of natural market forces. In any case, the result is that producing countries lose their market and their export economy as accidents nationwide consumer redo most of their goods and services at home. MedlinePlus MedlinePlus Proponents of free trade have always said that globalization will result in our economies increasingly inextricably linked. The elimination of the external debt and the realization of the free transfer of money from producing countries to consuming countries is one way to make this dream a reality.

This Question:"Are you ready for an economic revolution?" No answers yet. Be the first!
Related Questions
  • Answer This Question:Are you ready for an economic revolution?