Americans Consuming Stuff They Didn’t Produce

April 29, 2021  by   0   0

The trade deficit in goods leaped to another record high in March as Americans continue to spend stimulus money printed out of thin air on products they didn’t produce.

The goods trade deficit surged 4.0% last month, hitting an all-time record of $90.6 billion. That tops the previous record of $88 billion set in February.

Imports jumped 6.8% to $232.6 billion. Meanwhile, exports were also up a healthy 8.7%, but the total amounted to a modest $142.0 billion. The increase in exports follows a steep decline in February.

Even Reuters acknowledged that “very generous fiscal stimulus” has fueled American consumer spending on goods.

Today, virtually all of the durable goods sold in the US are imported – from smartphones, to appliances, to clothing. And many of the products assembled in the US are made from imported parts. As WolfStreet explained after February’s massive trade deficit, we’ve established a pattern.

After decades of rampant offshoring of production, US consumers get free stimulus money in the hopes that they will turn this taxpayer money – or rather future taxpayers’ money since this is borrowed money and will have to be dealt with by future taxpayers for all times to come – into a big-fat stimulus for the manufacturing economies in other countries.”

As Peter Schiff put it in a tweet, foreign countries are supplying the US with billions in goods “the US economy is too weak to produce.”

Last month, Peter appeared on NTD News to talk about the ever-growing trade deficits.

The government, or the Federal Reserve, is printing money and just giving it to unemployed people who aren’t making stuff, but they’re spending money. And so what they’re doing is they’re buying the stuff that people in other countries are employed making. So, it’s the productivity of the rest of the world that Americans are living off of, and the trade deficit evidences that and shows you that our whole economy, our whole recovery, is a fraud.”

While Peter has been warning about the trade deficit for months, most people don’t give it a second thought. Peter made an interesting observation in a tweet after Jerome Powell’s post-FOMC meeting news conference.

On the very day the U.S. recorded its largest monthly merchandise trade deficit in history, exceeding $90 billion for the first time ever, not a single reporter asked Powell if he was concerned about such a large imbalance and what it may portend for the #dollar and #inflation.

— Peter Schiff (@PeterSchiff) April 28, 2021

In a nutshell, China and the rest of the world give the US valuable consumer goods that its economy lacks the capacity to produce. All the rest of the world gets in exchange for their efforts and resources are dollars, which the US creates for free.

The question is how long with the rest of the world continue to exchange ever-depreciating dollars for tangible products? At some point, the gravy train will stop rolling. Peter said that could happen sooner than we might think.

At this point, we’re just living off the charity of the rest of the world and there’s a limit to the amount of charity, and I think we’re going to be testing those limits soon.”

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