It’s hard to get across to undergraduates, politicians and pundits that trade in goods doesn’t count for squat, and that trade in assets like currency is what’s driving international economics.
Perhaps this chart will help:
Yep, back when most of us were kids, currency trading was already 10 times larger than trade in goods and services.
Currency markets, in fact, do in a week what containers ships do in a year.
I’ve thought for a while that there’s a market for a textbook that focuses on grosses of things like the capital account, the market for hires and fires (i.e., JOLTS data), and government finance, rather than the net figures that the legacy media focuses on.
Via Paul Kedrosky’s Infectious Greed.
BTW: “Tail that wags the dog” is an aphorism that is almost unknown in Utah. This is one of those weird quirks of language for which I have no explanation. Utahs, in fact, find this phrase hysterical when they hear it: they immediately “get it” but also find it wonderful to learn such a cute phrase. It’s almost like when Utah’s “my heck” swept the rest of the country about 8 years ago.