Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

The Eurozone has balanced foreign accounts. RoW is therefore not a surplus sink for the Eurozone. RoW not being a surplus sink, and China belonging to RoW, China cannot be a surplus sink.

This is elementary graph theory. So elementary, in fact, that you can prove it simply by drawing a graph with the nodes "Greece," "rest of Eurozone" and "Rest of World."

Then impose the boundary conditions that inflows must exceed outflows for Greece, and that all in- and outflows to RoW must sum to zero.

The only sink in that graph is RoE. China is not in the Eurozone, and is therefore not a sink.


This has been your first and last fee lesson in elementary graph theory. If anything here is unclear, look it up before venturing into discussions of international trade again.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 19th, 2012 at 06:25:41 PM EST
[ Parent ]
That, as so often from you is nonsense. Even after we factor out the eurozone, Greece is not running a balanced trade account with the rest of world.
by IM on Sun Feb 19th, 2012 at 06:30:51 PM EST
[ Parent ]

The Eurozone is running a balanced trade with RoW.

That means that the Greek deficit cannot end up in a sink outside the Eurozone. It. Is. Not. Possible.

As long as the Eurozone as a whole is running balanced foreign accounts, all Eurozone countries' aggregate deficits must end up as surpluses for other Eurozone countries.

This is not a difficult concept to grasp, so I really don't see why you continue this obtuse insistence that German surpluses are not the problem.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 19th, 2012 at 06:47:53 PM EST
[ Parent ]


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