Imports, Exports, and Exchange Rates: Crash Course Economics #15
Economy | Information | History | Online | Facts | World | Global | Money
What is a trade deficit? Well, it all has to do with imports and exports and, well, trade. This week Jacob and Adriene walk you through the basics of imports, exports, and exchange. So, you remember the specialization and trade thing, right? So, that leads to imports and exports. Economically, in the aggregate, this is usually a good thing. Globalization and free trade do tend to increase overall wealth. But not everybody wins. Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever: Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Schmid, Jirat, Christy Huddleston, Daniel Baulig, Chris Peters, Anna-Ester Volozh, Ian Dundore, Caleb Weeks -- Want to find Crash Course elsewhere on the internet? Facebook - http://www.facebook.com/YouTubeCrashCourse Twitter - http://www.twitter.com/TheCrashCourse Tumblr - http://thecrashcourse.tumblr.com Support Crash Course on Patreon: http://patreon.com/crashcourse CC Kids: http://www.youtube.com/crashcoursekids
Comments
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John Green😭😭😭😭
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Problem begins when the financial sector sells assets for money - then doesn't pour them into investments instead hoards them to hedge against instability or to produce rents out of greed.
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"So this is a simplification, but when US spends money on Chinese goods, the people in China can, in theory, only do two things with that money; they could buy US goods or buy US assets like stocks and bonds."
Ok, so this might sound like a dumb question, but why can China only do these two things with the money received from selling their exports? Why can't they use it for domestic consumption. -
This is really interesting
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trump wants to go against basic economic concepts.this is not rocket science it's basic economics.
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ur talk very fast > who is behind you with stick
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At the 4:20 mark of the video she says that NAFTA and so-called "free trade" created the boom of the 1990s. Not true. The reality is: The economy was shifted from a manufacturing economy in the 1970s to a "financial economy" by the 1990s. In a manufacturing economy, a nation makes things. In a financial economy, you have cook-the-books economic manipulation. Like in the recent LIBOR scandal, where the bankers created a fake ratings agency which valued the price of a crackhouse in Detroit from $1 to $500,000. Was the market value of the house $500,000? No, no one would buy it for that. But the bankers listed it fraudulently on their books as an asset at that fake value, and then took out million-dollar loans predicated on the crackhouse being their collateral. That's how the "financial economy" works. On paper, you're creating all this phony wealth. But, after the bubble pops, the "wealth" disappears overnight, because it was fake. . . . In the mid-1990s Bill Clinton gutted the Glass-Steagall law, allowing investment banks to buy commercial banks for the first time since the Great Depression. This set off all the mergers of the 1990s and the era of Too Big To Fail. . . . Lots of fake paper "wealth" was created, but it was fraudulent. That's why Clinton quietly transferred $2.3 trillion from social security to keep the government from going bankrupt. Then came the collapse of the tech sector in 1999. . . . All of the legislation passed by Clinton paved the way for the financial metdown of 2008, too. Long story short: No, in the 1990s, America wasn't "fabulously rich". It was cooking the books.
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Most of these multinational corporations are Asian. Companies like Sony and Lenovo. So they would still be operating inside their own countries to increase the trade deficit.
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Multinational corporations will only only trade with countries where labour laws are lax or environmental protection is poor. The moment these are made stringent, they move to other countries.
What you're calling trade is exploitation. -
Before NAFTA a lot of jobs in the late 1970's and 1980's went to Mexico. I have an older Zenith television from 1981, that has Mexican made parts. The cabinet was made in the USA. The final assembly was done in the US. My furnace from 1988 has Mexican made parts inside of it as well. What really hurt jobs was free trade with China in the year 2000.
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How does the Chinese government buy US dollar?
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WHERE IS JOHN GREEN?
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Buy Vegan, fair trade! GG Well Played.
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Why does the thumbnail of this video have a samosa with one eye ??
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"The creators of the thought bubble are Canadian. These GRAPHICS are IMPORTED"
This made my day :D -
I'm writing a paper for an online econ class, so any help would be awesome. I don't understand why that's true at 7:17. If the US imports more products from Mexico, they receive US dollars. The total amount of US dollars doesn't change. How does that decrease demand for US dollars? Is it because Mexico now has more US dollars than they had before?
Thanks in advance! -
HIS BELTTTTTTTT
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What the hell is this? TV opinion shows? I'm here to learn macroeconomics, not he says, she says.
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The downside to the trade deficit is the debt you owe to foreign countries. Countries like China. But from my perspective its irrelevant. Since all money today is fiat. Im not sure how it is in Hungary or Finland. But most countries have independent monetary policies. Id imagine member states in the EU can print money too.
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It boosts the economy because the services that were provided for the imported product to be sold. Things like localized advertising, retail outlets, customer service, sales agents, truck drivers, etc etc. All of these things go into the final cost. The foreign country gets the wholesale price of the good, and the importer gets the retail price shaved off for themselves.
However, imports create money outflows, so this money is now lost whenever something is imported at wholesale. And in theory, that money can never be acquired again unless an equal amount in imports are sold to the exporting nation. But these exporting nations use the money they make from exports and loan the money directly back to the importing nation so the importing nation can never run out of money. And thus they will import the same amount or more the next year.
This is how the creditor, debtor relationship is produced. The worlds largest exporters like China have become the world's biggest creditors.
If its Imperialism. Then its Chinese Imperialism.
"China is now the world's leading creditor nation, while the United States is the world's largest debtor. Beijing is the largest foreign holder of US government debt – passing Japan in 2008 to become, in effect, the US government's largest foreign creditor".
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