How Do Massive Trade Deficits Hurt You?
Автор: OptionsTips
Загружено: 2017-05-31
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How Do Massive Trade Deficits Hurt You?
By www.Options-Trading-Education.com
The president of China is going to meet with the president of the United States in a couple of days. Front and center on their agenda will be trade closely followed by North Korea’s nuclear arsenal and missiles. Trump got elected on promises to roll back trade deficits and bring jobs back to the USA. Forbes says that with this meeting it is crunch time for Trump on trade.
For President Donald Trump, it’s finally put up or shut up time on China’s trade with the United States.
Trump is scheduled to meet with Chinese President Xi Jinping on Thursday and Friday at his Mar-a-Lago resort in Florida. In a tweeted preview last week, Trump said the meeting with Xi “will be a very difficult one in that we can no longer have massive trade deficits and job losses.”
He added somewhat ominously that American companies “must be prepared to look at other alternatives.”
There are various suggestions for how the US would deal with its trade deficit but all of them come down to selective tariffs on foreign goods. The concern is that being too aggressive with China and others will result in a trade war hurting everyone. Our question is how do massive trade deficits hurt you? A lot of money spent overseas comes back to the USA as investments and thereby creates jobs. This writer recalls the 1950’s when the USA had to dole out foreign aid to countries so that they could buy US products. Is your life better or worse as an options trader because of trade deficits?
Options Trading
Options trading is not like buy and hold investing. You don’t purchase a stock and then lament its demise as the company loses business to foreign competitors. Rather you buy and sell calls and puts based on your projections of which stocks will rise and fall. Fundamental analysis of the big picture is important as is technical analysis of market trends. But in the end an options trader can make a nice income whether the market is going up or down.
What Will Your Money Be Worth?
If things go from bad to worse at the USA China summit and a trade war ensues what will happen to the US dollar? If it slides considerably so does the value of your bank account. After all what a dollar is worth is what it can purchase.
For the purpose of living the question is, what is a dollar really worth in terms of the things you need and buy? This way of thinking is essentially fundamental analysis and is useful to asset managers who want to maintain the value of their holdings over time.
We looked at this issue on our sister site, ForexConspiracyReport.com. If the dollar decides to tank due to massive trade deficits you might still want to trade in greenbacks on US markets but park your earnings in safe haven currencies such as the Yen or Swiss franc.
• How Do Massive Trade Deficits Hurt You?
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