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Nation 'X' buys ten dollars from Nation 'Y' and sells 'Y' ten dollars of good equals a balance in trade. Nation 'X' sells ten dollars in goods and services to Nations 'Y' and 'Z' and in turn buys ten dollars with that money from Nations 'P', 'Q' and 'R' and Nation 'X' still has a balance in trade. It is only when 'X' buys more then it sells or sells more then it buys that the trade balance is out of balance.

The US is currently suffering an imbalance because it has reduced production and industrial capacity of goods desired overseas and must import petroleum at higher and higer prices. This practice make US Dollars less valuable to hold. It is a vicious cycle. US intellectual property is still exported at a profit. There it is copied and used without license and in turn it has lost its value. Raw materials and the companies that own them are being bought up by foreign nations. It amounts to a drain on US wealth and the loss of the American Dream.

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13y ago

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