I assimilate change of payments… But i can’t unequivocally assimilate because the income you use to buy unfamiliar products has to come behind to America.
Please help!
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Tagged as: Bonds, Buying, Companies, deficit, foreign, Investing, mean, more, trade
{ 1 comment… read it below or add one }
Simply the world to two parts – US and foreign countries.
Trade deficit means foreign countries sell to US more than they buy from it. This leaves them with surplus dollars on their hands.
A wise man never just sits on the money, he invests them. Where can you invest dollars? Only into US companies or government bonds.
Dollars are used for trade and investment outside of US, but that all is happening within the “foreign countries” object. In the end, all money returns to US either as payment for goods or investment.