Trade with Thailand

http://www.guardian.co.uk/feedarticle?id=7399376

Thailand has a population density of 324 people per square mile, about the same as China.  And our per capita trade deficit in manufactured goods with Thailand is nearly identical to that of China, exactly what the theory presented in Five Short Blasts would predict.  But you never hear a word about our deficit with Thailand, do you? 

The point of this article is that Thailand had a small trade deficit with the rest of the world in February.  But this was due to heavy purchases of manufacturing machinery.  They’re gearing up to increase their exports!  Also note that, despite the fall of the dollar, their exports to the U.S. are actually growing.  Those who believe the falling dollar will have any lasting, meaningful effect on our trade deficit are mistaken because the value of the dollar has no relationship to the root cause of the deficit – the gross disparity in population densities between the U.S. and Thailand and so many other nations.  These nations will compensate for the falling dollar simply by cutting costs and price in order to maintain (and even grow) their market share. 

Pete

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