What is the negative effect of a trade deficit on the country which is not buying as much?
352178
The negative effect is that no country can produce everything it needs due to lack of natural resources. So, the standard of living will not be as great. Fewer things to buy and enjoy.
1058034
It might be current account deficit or a similar term.  There's an article below that dicusses money flows in and out of a country.
607862
Not in the near future.  It will continue to decrease for the forseeable future.  A decreasing US dollar will help our exports and support the US economy.
356771
Currently the US is borrowing from China and Japan.  Saudi Arabia has a fair share as well.  But I think most of the debt is privately held in bonds.\n\nIf you want to dig up a complete list, you might try to look at the federal reserve's website.\n\nhttp://www.federalreserve.gov/\n\nI cant guarantee you will find anything, but there is a very large amount of information there that most people choose to ignore.
202116
It needs to be better balance. We import far more than we are exporting. Importing may keep prices down, but the lack of balance is costing American's their jobs. If things are more cheaply made overseas, companies outsource or move their business to other countries and import the products. What good does it do to have things made more cheaply elsewhere, if you lose your job here and can't afford to buy them. We could even out the balance by taxing things that are imported. Yes, they would become a little more expensive, but companies wouldn't outsource as much, more American's would have jobs and our economy would be stronger. Trust me, we are paying more through taxes and programs to help those out of work than we would be paying in increases for imported goods. We really have to get this under control.
259207
no, this leads to hyperinflation and the currency becomes worthless. great examples can be found in former east germany, bolivia, etc.
444615
The national debt is actually something that is undermining our national security by handing over a very large portion of our economy to foreign powers.\n\nIn international finance, everything is balanced through a very complicated system including value of exported and imported goods, value of currency, value of precious metal reserves (gold & silver), and other valued goods. When the US spends more than it makes as a nation, there are several things that could happend: 1. Other countries step in and "loan" money to the US through the purchase of Treasury Bills (T-Bills); 2. The US dollar is devalued (i.e. goes down compared to other currencies).\n\nRight now, foreign nations are purchasing T-Bills in order to loan the US the money that it spends. Basically, the T-Bill is a note that promises the purchaser that the US Government will pay back the money owed.\n\nThe problem is, when other countries have large amounts of these T-Bills, they effectivly control the US economy by the threat of dumping the t-bills onto the international market. For instance, if China decided that it really didn't want the US to supply arms to Taiwan, it could take all of its T-bills and dump them in the international market. Overnight, the US Dollar would plummet, thus raising the cost of imported goods in the US. The result is that $5 t-shirt made overseas now costs $10. Inflation would be rampant, businesses would shut down, unemployment would rocket up, and the US economy would be in tatters in a matter of weeks.
634266
It works fairly well as long as the country has a strong and stable economy and can support the peg with open market operations.  The problem is that countries who have a strong economy are the ones that are least likely to want a peg.  The weak countries want the peg so that the currency doesn't devalue too much, so they pick the peg.  It's really bad when they can't hold it up and they have to devalue as happened in Argentina.
234899
Simple economics. USD is becoming weaker because of inflation, the US government printing a lot of money, huge government debt, and about a million other reasons.
528282
Yup...everyone is right.  The dollar seems to be weakening. The trade deficit is growing, especially with China, and therefore, they have been hoarding dollars, which means that, to some extent, they do "control" our currency.  And basically, all of this is particularly hard to predict, so "who knows?"\n\nBut really, one of the bigger issues is that we've been spending like crazy with our recent budgets, and that money doesn't come from thin air (well, perhaps it does, but it does affect the currency market).  In the end, the U.S. is due for inflation, and since other nations have been more responsible in their fiscal and monetary policy, our currency will probably continue to fall over the long run.  The fact that the Chinese have been holding on to dollars lately has had the most positive effect on the dollar, but that can't last.  Eventually, all those dollars will come back here, and that will weaken our currency against theirs.
290004
Trading in the currency of other countries.
493889
It largely depends on how self sufficient the country is.  When you say "enough money"  are you referring to a certain level of profit or actually referring to loss?
209780
Short term negative trade is great for the consumer. That means of course more stuff is coming INTO our country than is going out.  For some reason we allow all of this cheap stuff to come in from China and Belize and people like me go to Walmart and get $20 shoes instead of $60 shoes that were made in Massachusetts where the shoemakers used to get a decent wage and benefits before the American shoe manufacturers were driven out of business and shoe manufacturing was outsourced to China and India.  The shoe industry owners and management and share holders don't care who makes the shoes as long as it's done cheaply enough to keep them making a nice profit and they lean on the government to keep the imports coming - they HAVE to - all of their factories are overseas now.  If there are any domestic manufacturers left they are forced to keep their prices as low as possible because of all of the competition from cheap imports - supply and demand.  I as the consumer win in the short term because I get a pair of pretty darn good shoes at a rock bottom price.  I lose as an American because American jobs are disappearing, our tax base is eroding as we lose workers income taxes and industrial taxes at the local, state and federal level.  Jobless people swell the welfare rolls, Social Security input decreases.  The only possible advantage I can see is that it makes us more interdependent on one another internationally.  I mean how likely is China to nuke us or cut diplomatic ties while we supply a insatiable appetite for their goods. It would be like a shopkeeper shooting his biggest customer.
795151
Here's just a small part of why the dollar is weak and none of that's good. It is correct that it will make the trade deficit LOOK better than it is. The stock market has very little to do with the economy-it has to do with buying and selling. For the most part, the stock market today loves the inflation numbers which say inflation is low overall, but largely because it includes prices of vehicles, clothes and luxury items most of us can't buy. Food and housing costs are way up-and that's what most people need first. Corporate earnings are falsely inflated by cost cutting not by true growth. Our ever-increasing deficit-yes, our Treasuries-our US debt is 51% foreign owned. China is our largest foreign debtor. Most pundits as well as the administration don't want to tell us the bad news because US optimism-the will to shop-and the US consumer's desire to ignore problems-leads to "growth" and "profits". Sure, War is Peace and Debt is Wealth.\n\nLONDON (AFP) - The dollar sank to a 20-month low against the euro and a 14-year low against the pound as investors seized on weak manufacturing data in the US to drive the currency lower, dealers said. \n\nThe Chicago PMI index of business activity fell to 49.9 in November from 53.5 in October, well below analysts' expectations for a pick-up to 54.5, data showed.\n\nAnalysts said the data could portend a fall in the closely watched ISM manufacturing index which is to be published on Friday.\n\nCalyon currency analyst Mitul Kotecha played down talk of a recession in the US, which has been driving heavy selling of the dollar in recent days.\n\nThe euro has gained 3.7 percent agaist the dollar since November 21, taking it from 1.28 dollars to its present level of 1.32.\n\n"It's maybe too early to talk about a recession," said Kotecha.\n"Clearly the risk of a recession has increased in recent months.\n\nBank of New York currency analyst Michael Woolfolk said the Chicago PMI, combined with other income and spending data, "were the one-two punch that knocked the dollar back on the ropes, leaving little doubt over the near-term direction in the beleaguered greenback".\n\nLONDON (AFX) - The dollar stayed weak, hovering around the 1.32 mark against the euro and staying at 14-year lows against the pound following disappointing US weekly jobless claims numbers. \nUS jobless claims surged by 34,000 to 357,000 in the week just gone, well below analysts' forecasts for a fall in claims to 314,000, although the figures are likely to have been distorted by the Thanksgiving holiday. \nThe news broadly offset a stronger-than-expected core PCE deflator, the measure of inflation favoured by the Federal Reserve. \n"A larger than expected rise in jobless claims, even though the Labor Department says the Thanksgiving holiday skewed the data, is being emphasized by the market more than the unexpectedly firm core PCE deflator," said Jamie Coleman at Thomson IFR Markets. \nThe PCE measure showed that core inflation rose by 2.4 pct on an annual basis, above expectations for a more moderate 2.3 pct.
953553
It means imports will cost more and our exports will cost less in other countries. So it should be bad for consumers but good for businesses that export things.
702112
A good question (but perhaps better off in the economics area of the site). Every pound or euro note you hold has been printed and spent by the state (before you receive it from your bank or employer or client), and on the day it was printed, the total number of pound notes in the country changed slightly.\n\n  This is the issue we are discussing here: how much money can a country print before it causes disaster?\n\n    The answer is that generally a country may print or create a small amount of cash on top of the notes it takes out of circulation, but while deciding how much to print, it must take a very careful look at recent inflation and exchange rate statistics.\n\n   If a country prints too much money, both the inflation and the exchange rates will go haywire / will be adversely affected. This is because, as money becomes more abundant but the things you buy with money do not, the ratio of people wanting to buy stuff and people selling stuff changes. \n\n  Simply put, if a country doubles the amount of money in circulation, then market forces will automatically take down the value of the exchange rate at least by half, prices of all goods and services will go up (will double), and imports become harder to afford as it now takes at least twice as much money to but the same imported goods.\n\n   Why is this not the case for the USA (and the Eurozone)? It is sometimes and to an extent (for the above reasons), but:\n when much of the extra money that is added into circulation does not get spent and then spent again by the person who received it, and again ..., instead the money is stockpiled somewhere (by a person, a company or a government), then the above affect does not take place until the stockpiled money is spent again. \n\nAnd if the total amount of money in the world being stockpiled (most large stockpiles are in dollars and euros as there are used for international trade and to keep other currencies stable) goes up, so (to conclude in the correct jargon) non-inflationary increases in money supply are possible.
531827
I am not too sure abt the levels//\n\nit depends on various parameters like FDI, balance of payments and trade deficit/surplus, the external borrowings..