Journey To The End Of San Pedro Bay, by MN Gordon

If you want to see what a monetary-fueled trade imbalance looks like, check out the ports in the Los Angeles area. From MN Gordon at

Have you recently bought furniture, auto parts, clothes, electronics, plastic wares, doofers, doodads, or other doohickeys?  Chances are, they were made overseas.

The U.S. monthly trade deficit in February scored a new record.  According to the Commerce Department, the U.S. imported $71.1 billion more goods and services than it exported.  Of this, $30.3 billion was from China alone.

What’s more, the month of February only had 28 days.  At a daily gap of $2.54 billion, had it been a full 31-day month, the monthly trade deficit would have been over $78 billion.  What to make of it…

A trade deficit is not inherently bad.  Remember, countries as a whole do not trade with each other.  Individuals and businesses trade with other individuals and businesses between countries.  Presumably they do so because it’s advantageous for both sides.

Sound money, of limited supply and market determined interest rates, would provide natural limits to how wide a trade deficit could expand.  But we don’t live in a world of sound money and market determined interest rates.  We live in a world of fake money where interest rates are set by central planners.

The gargantuan trade deficit is a byproduct of the insanity of central economic planning.  Let’s follow the fake money and see where it leads…

The Federal Reserve creates credit from thin air and loans it to the U.S. Treasury in the form of Treasury bond purchases.  At the same time, commercial banks extend credit via fractional reserve banking.  The Federal Reserve encourages the over issuance of credit by artificially suppressing interest rates for extended time periods – often a decade or more.

Continue reading→

One response to “Journey To The End Of San Pedro Bay, by MN Gordon

  1. Here is a article on the San Pedro Bay cargo cloggage of ships trying to get into the LA port. It also has #s on imports and exports. I never knew.

    Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.