A lot of people think a weaker dollar will fix our trade deficit.
They assume that if the dollar falls, our exports get cheaper, we sell more overseas, and we import less. Sounds good in theory.
But in the short run, it actually works the opposite way.
When the dollar drops, everything we import — energy, raw materials, manufactured goods — becomes more expensive. Even if we buy slightly less volume, we’re paying more for what we buy.
That pushes the trade deficit higher, not lower.
Yes, in the long run, if we get poor enough, we may import less simply because we can’t afford anything. But that’s not a solution — that’s decline.
#Dollar #TradeDeficit #PeterSchiff #Economics #CurrencyMarkets #MacroEconomics #Finance #Shorts #short
