Monetary Matters with Jack Farley Lyn Alden: Challenge America’s Trade Deficit, Challenge The U.S. Dollar | Alden on China, Gold, and Financial and Economic Impacts of Tariffs
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Apr 11, 2025 
Lyn Alden, an investment strategist at Lyn Alden Investment Strategy and author of 'Broken Money', dives deep into America's trade challenges. She connects trade deficits to the U.S. dollar's role as a global reserve currency and warns of significant market turbulence ahead. The discussion touches on the economic implications of tariffs, the intricate U.S.-China trade dynamics, and how currency values affect competitiveness. Alden also explores strategies to navigate market volatility and emphasizes the importance of risk management in uncertain times.
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Trade Deficit and Reserve Currency Status
- The US trade deficit stems from the dollar's global reserve currency status, creating constant demand.
- This makes US-produced goods less competitive, even among developed nations, driving imports.
Dollar Strength and Manufacturing Competitiveness
- Even with reduced tariffs from other countries, the dollar's strength hinders US manufacturing competitiveness.
- This inherent advantage stems from other countries holding dollars as reserve assets.
Trade Imbalances and Capital Flows
- Trade imbalances and capital account balances are intrinsically linked, impacting asset prices.
- Reducing the trade deficit could weaken US asset performance, an undesirable outcome for any administration.
