Episode 314: What Happened to Trade?
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Trade Deficiency - What's the Problem?
Excess dollars that leave the country do come back, but they don't come back necessarily in the form of us selling goods and services. Foreigners will use those excess dollars to buy stock and bonds in American companies. They'll buy bonds that are issued by the US Treasury. And all the dust settles, every dollar that leaves does come back. It just doesn’t all come back in the forms of people buying goods and services; it comes back in the formof people buying equity and bonds in U.S. companies.
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