XGOP4Hillary

(http://www.ibdeditorial.com/IBDArticles.aspx?id=295225814367283)

If this weren't so sad it would be pathetically funny. IBD is supposed to be part of our professional business press. This is supposed to be an intelligent analysis. It is actually what I will scoop out of my feline overlord's box in a day or two. It is feces.

Mercantilist states buying Treasury bills is NOT investment in the US. It is a place to park surplus dollars. Japan does not grow slowly because it has a trade surplus. It grew extremely rapidly in the 70's and 80's and also had a trade surplus. It created an asset bubble when it revalued the yen in 85 and created a deflationary disaster when it blew up the bubble. A mixture of structural problems, demographics and bad policy decisions have kept it in a two decade long depression.

Germany also had large surpluses with giant growth, medium growth and no growth. Germany also has structural problems. They are less severe than Japan's and the German demographic trap isn't as severe but they are also a more open market than Japan and feel the effects of structurally high wage and business operation costs more than Japan does.

Foreign investment is a GOOD thing when it is actual investement in new plant, equipment etc. It can be good when it is portfolio investemnt [there are too many variables to do a definite yes or no - this is one of those questions that require a multihanded economist and a lot of quite specific detail]. Just having foreigners pile up T-bills is a sign of weakness and is not sustainable. The economic problems of this decade stem from the US living beyond its means and from Asia Inc. practicing mercantilism.

The world has no net wish for more dollars. The world needs for the giant pool of surplus dollars to be reduced. Both need a US trade surplus. Absent this we are adding fuel to a forrest fire.