No. of Recommendations: 3
And what does the exporter do with the banana republic script? Maybe buy US Treasuries. Then, the US goes in a panic when the exporter whispers it might sell some of those Treasuries. Which is the greater threat to the US economy? A USian eating strawberries, instead of a banana, or the market for US banana republic paper taking a beating, because a counter party sells some of it?
It's not a question of which is "better" or not. If you buy domestic rather than importing, you don't "save" $2 billion. The President completely misunderstands how international trade works.
Considering that Brazil holds about 0.42% of US treasuries, I also don't think the US is going to go into a panic if they whisper they might sell some, either....
