International trade is a topic that headlines newspapers and television news journals, is used as a buzzword in boardrooms around the globe, and is talked about in classrooms and in passing social conversation, but what does it really mean in terms of the national interest? In many export-dominated countries, it means the health of those nations’ economies. In other countries where trade has traditionally played a smaller role, international trade can mean sustaining a certain standard-of-living level, but it may not be essential for survival. The United States belongs to the latter group, though the trend is rapidly changing.
In the industrialized and postindustrialized world, banking drives trade and investment. In the United States in particular, the monetary policies being implemented cause trade deficits; therefore, in essence, the banking policy of the United States is its trade policy. This statement is not referring to bilateral trade agreements that the president of the United States negotiates and Congress later ratifies or the political debates over which countries get Most Favored Nation (MFN) status. It concerns how the real moneymakers constrain policy to get rich from foreign exchange markets by keeping the dollar strong while abandoning any policy that works toward a trade balance.
A weaker dollar, which may actually more accurately represent the real value of the dollar and which is needed to bring the U.S. trade deficit under control, means less profit for the financial sector.