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It is a mercantilism that generates deflation and pain and destroy the framework or the countries in the framework. You can not have a single monetary unit when there are very different inflation structures.

A question: Can it destroy all the participants in the framework, including the one pursuing the mercantilist policy?

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Wed Jan 12th, 2011 at 02:27:12 PM EST
[ Parent ]
I can't see why it shouldn't. Mercantilist deflation exports part of the pain of deflation to the deflating country's trading partners. When they can no longer absorb this pain, there's only one place for it to go.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 12th, 2011 at 02:40:11 PM EST
[ Parent ]
can they survive with exports to other developing countries, or not?

And I still do not get the flux identities....except one, a trade deficit between two countries using the same coin and with no creation of money must generate either public or private debt... simple balance of flux.

But.. the truth is that money is created by the banking system, which is also useful to start and increase the monetary mass in an expansion.. so, it is just a part of that debt which comes from trade deficits.. so it is:

trade imbalance= increase in the net private and public debt.

I think. So

Trade Imbalance= private+public debt is wrong, isn't it?

You can indeed have no trade imbalance and still create debt to finance some projects.. to generate money which will remain in circulation if the productivity or a new object is produced.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Wed Jan 12th, 2011 at 04:09:31 PM EST
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