@ Turtler in re Patrick and the Snakes: one explanation I’ve seen is symbolical, in that snakes represent Lucifer and his minions, which would be pagans at the time, and Patrick helped drive them out of the country (IOW convert them).

Oh yeah, that was definitely the original intent behind it. Which I tried to allude to with the fictional villain’s leanings (pagan and evil even by the standards of the time) and how he is importing/smuggling the snakes in by his boats. But the symbolic connection between Lucifer and Serpents is old and goes all the way back to the Bible.

Our local Welsh society, among others, capitalizes on his origin in Britain, some say in the area now denoted Wales, and walk in St Paddy’s Day parades with banners proclaiming “St Patrick was a Welshman.”
I send cards on The Day because my heritage includes Welsh and Irish: a two-fer!

Indeed, and I would love to see it at some point. Brythonic-Welsh history and culture fascinates me.

“I would say we haven’t done a particularly good job at that. While this is important, not just globally but domestically as well. But I’m not sure how value enters into trade relationships. Value is something that’s added at point of purchase.”

But since the $ is still the global reserve currency [under attack but still dominant], we have done a rather better than expected job at finessing our reputation via our liberty and prosperity as the “final” resting place where people put their money version of their wealth. Clearly that could change, and I am not sure if we would end up being better or worse off as a result. Presumably pros and cons either way.

My perception is that for a given exchange, value is discovered or determined or made public at the point of completing the transaction, but the value resides in each trader’s personal (and often subjective) preferences until the equilibrium balancing price is agreed to. And if the negotiation was done poorly, someone may have obtained or retained even greater personal value than the price value. [Or is this a conversation about language nit picking?]
Peace.

But I am adding or exploring “value” beyond pure $ pricing, and assets and liabilities are designated in $’s. This is of course abstract and subjective. For NC’s fictional trader, if he really wanted black shoes badly enough, he would have potentially had to offer even more than $5. Following Trump’s negotiating strategy, the initial “demand” should have been for the shoes + $1000. That bid would be rejected and eventually they get down to shoes + (say) $10 and an “equitable” trade that both parties can live with. At a $5 premium, someone left money on the table vs. what the traders valued in reality.

I have to admit that I struggle to understand double entry bookkeeping. I have never had a course in that and trying to pick it up on my own, I am probably failing to truly understand and adopt a neutral approach for an entry being “two sides of the same coin”. I still want to see assets as positive and liabilities as negative. Sigh.

If I’m importing something from the UK I might pay in dollars, but more likely they want pounds. I have to trade my dollars to someone who has pounds. That entity is always being offered currency exchanges, and when dollars are in high demand you can get a lot of pounds for them and when dollars are in low demand you don’t get as many. The relative price between currencies can affect the volume of foreign trade. Some kind of equilibrium is struck between the effect of the volume of foreign trade and the effect of the currency exchanges.

When I buy something from a seller in the UK, my trade deficit is still measured in dollars, but that I doesn’t mean I actually send dollars out of the country. In many cases it does, but the overall trade deficit implies that if dollars ever leave, the dollars eventually come back somehow; through investment, lending, purchasing American products, or simply by being exchanged for other currencies. Alternatively, importers and exporters in other countries may use the dollars to settle their own transactions with each other and in fact this also happens. In addition, people in other countries may simply be stockpiling the dollars to spend later and of course this also happens, but in the end that’s a time-delayed version of one of the other alternatives.

I have not reread these to confirm they fill the bill on a discussion of reserve currency in detail, but here are the two items that I believe I was considering:
1) https://www.city-journal.org/article/dollar-devaluation-is-a-dangerous-gambit?utm_source=virtuous&utm_medium=email&utm_campaign=cjdaily
A Dangerous Gambit
Devaluing the dollar won’t pay off.
Patrick Horan Aug 20 2024 [copied to Word 8/21/24; reread 3/4/25]

2) https://www.city-journal.org/article/trump-tariffs-us-debt-dollar-economy
Making Sense of the Trump Tariffs
They will bring other countries to the negotiating table.
Joshua Hendrickson 3/3/2025 [copied to Word 3/4/25; actually very short at 2+ pages]

And to prime the intellectual pump, here is an extract that summarizes his message, maybe:
“The Trump administration has three objectives related to America’s position in the international monetary system. [I converted prose to bullet listing for improved clarity]
[1] First, it wants to maintain but reduce the financial burdens associated with the U.S.’s leading role.
[2] Second, it wants to get our national debt on a more sustainable path.
[3] Third, it wants to restore America’s industrial capacity.
These objectives are coherent only if one understands the global financial system. The U.S. dollar is the world’s reserve currency, and the U.S. Treasury security is the global reserve asset. This means, respectively, that the dollar is the primary currency used in international trade, and that foreign central banks and other institutions store wealth in terms of dollars with Treasury securities.
America’s central role in the world economy benefits us in several ways. It relaxes constraints on the federal government’s ability to borrow, for example, and allows Washington to use financial sanctions against foreign enemies rather than military force.

But these benefits come with costs. One such cost is that the dollar, because of its reserve status, tends to be overvalued. This makes foreign goods cheaper for U.S. consumers, but it also makes foreign labor and production cheaper for reasons unrelated to comparative advantage—a dynamic that has hollowed out America’s industrial base.

Another consequence of America’s role in the system is that it encourages us to accumulate debt. As foreign countries’ economies grow, so does their demand for reserves. If the U.S. doesn’t supply enough debt to meet that growing demand, our borrowing costs decline, which motivates politicians to run larger deficits.”

Right now I figure I have maybe a 70% understanding of these things, so welcome any clarifying discussion.

There is no question that someone who got the shoes he wanted and $5 has got more than that SAME person would if he only got the shoes he wanted. But you have no way to know if both participants in the trade got the same increase in value. It depends on how much each side valued that $5 and the shoes. It is not true that everyone values money and goods to the same extent in every transaction.

As a side note, money is only fungible when we agree it is. There’s nothing inherently fungible about it. If you disagree, try paying for your groceries with a combination of euros, yuan, and dollars; or paying with cash when a shop only takes cards.

But think of a situation where you buy from someone who also buys from you. Suppose you sell shoes and I sell printer ink. Once day I happen to buy shoes from you for $100 and you buy printer ink from me for $90 dollars.

The net flow of currency is $10 to you; this would be the “trade deficit”. But the change in value to both of us is not that I am $10 poorer and you are $10 richer.

I got shoes, which I wanted more than I wanted my $100, and you got rid of shoes which you wanted less than you wanted my $100. We both got richer. Then you bought printer ink which you wanted more than your $90 and which I wanted less than your $90. We both got richer again.

My lowest value outcome was to be stuck with my printer ink, my $100, and no shoes. Your lowest value outcome was to be stuck with your shoes and your $90 and no printer ink. We both got outcomes we valued higher, and so both got richer. (Potentially there could have been different outcomes we liked even better, if the dollar amounts were different.) The two positive changes we each got do not magically add up to a negative change for one of us.

But the Brian E logic (ok not to blame him, it’s not uncommon) is that I was better off with my lowest-value outcome because the net flow of money was $10 from me. That’s because his fallacy is to identify the net flow of currency with the net change in value for each participant–he’s leaving out a big chunk of the accounting. To use his “net worth” terminology, he is not counting change in assets, only the cash flow…

If his logic were correct, then trade is always somebody getting exploited and nothing is valuable but money.

Making up opinions from imaginary people, not present here, and attributing them to me, does not cover for your inability to show that a “trade deficit” somehow makes a country poorer.

Our local Welsh society, among others, capitalizes on his origin in Britain, some say in the area now denoted Wales, and walk in St Paddy’s Day parades with banners proclaiming “St Patrick was a Welshman.”
I send cards on The Day because my heritage includes Welsh and Irish: a two-fer!

I would say we haven’t done a particularly good job at that. While this is important, not just globally but domestically as well. But I’m not sure how value enters into trade relationships. Value is something that’s added at point of purchase. If you’re saying that the trade imbalance between Europe and the US is reflected in the underlying value of the goods being exchanged, that’s a concept I’ve never heard before.
What I see as the problem with that imbalance is our manufacturing/distribution is being underutilized in contrast to the trading partner.

“It strikes me, Brian, that perhaps we also need to see your definition of net worth.” – R2L
Net Worth=Assets-Liabilities.

“Somewhere else I read that the dollar as the global reserve currency also plays into some of this, and Vance et al. now want to devalue the dollar to adjust the import/export cost numbers to our favor, but in doing so they have to balance that against reducing global incentives to use $’s as the reserve currency.” – R2L

I find that hard to believe that Vance would consider that as a solution, given his background. That isn’t a solution. I would be interested in the source for that.

=======

I’ve tried to parse out the left’s solution to our deficit problem. The left wants lots of unskilled/low cost labor for a couple of reasons. Lowers the cost of goods as it suppresses labor costs. But the left isn’t focused on exports as a strategy, but relies on imports to keep cost of living affordable– with government payments to make up the difference between low wages and affordability.
Which leads to large deficits. As I said the left isn’t concerned with exports- so high corporate taxes and high taxes on the upper class also isn’t a concern.

The difference can be made up with tapping the last untaxed pool of money– unrealized capital gains. Since the majority of Americans don’t have a large portion of their assets in equities, they will likely view this as the golden egg. Tapping into that would seem to given an nearly unlimited supply of taxes to fund all sorts of equitable solutions.

So the tradeoff is a hollowing out of exports and a compliant Fed that makes decisions to enhance share price over it’s stated purpose of employment/inflation. We’re already partially on our way to this goal, with subsidized food, housing and healthcare. They were working on free secondary education and reparations to add some additional spending money to the mix.

The fact this isn’t sustainable will be dealt with in the future– sort of how our government debt is being dealt with– we’ll fix it in the future.

The alternative to this scenario is President Trump’s attempt to increase the size of the economy through his deregulation/energy/trade policies.