Retaliation on American firms suggested after Huawei ban

If US insists on running massive deficits then outside USA must run surpluses. It's a net net zero system.

The whole world knows about massive US deficits, which are increasing every day. And still US treasury keep selling treasury bonds and there are buyers. Most amazing phenomenon is that USD is crushing every other major currency in sight. Look at AUDUSD. It is going down like a rock. So is EUR. EUR breaking a new support every day. I hope it does not go below 1.0 USD this year. If that happens, breakdown of EZ is not far.

Weekend Thoughts:

While US dollar continues to be world reserve currency, its difficult to see how it can avoid running large deficits, on a structural basis. (Triffin). It seriously distorts both US economy and International trade.
Extract from Investopedia: https://www.investopedia.com/financial-edge/1011/how-the-triffin-dilemma-affects-currencies.aspx
Quote: "Becoming a reserve currency presents countries (US) with a paradox. They want the "interest-free" loan generated by selling currency to foreign governments, and the ability to raise capital quickly, because of high demand for reserve currency-denominated bonds. At the same time they want to be able to use capital and monetary policy to ensure that domestic industries are competitive in the world market, and to make sure that the domestic economy is healthy and not running large trade deficits.
Unfortunately, both of these ideas – cheap sources of capital and positive trade balances – can't really happen at the same time."

This deficit problem eventually broke the original Bretton Woods "convertibility facility" under Nixon... (as predicted by Keynes who favored a "Banco" system not unlike the current SDR experiment).
There are no easy solutions

Bloomberg carried an interesting perspective here that traders nay have mised..
https://www.bloomberg.com/news/articles/2018-10-03/the-tyranny-of-the-u-s-dollar
Quotethe current system,,) the U.S. gets what amounts to a permanent, interest-free loan from the rest of the world when dollars are held outside the U.S. As Eichengreen points out, it costs only a few cents for the U.S. Bureau of Engraving and Printing to produce a $100 bill, but other countries have to pony up $100 worth of actual goods and services to obtain one. Dollars that foreigners willingly accept and trade among themselves are like little green IOUs to the rest of the world. They allow Americans collectively to consume more than they produce—to live beyond their means.
The downside to America’s privilege is that the foreign demand for dollars raises the exchange rate, making American products less competitive in world markets. Especially in slack times, American workers can be thrown out of work when the U.S. imports products that could have been made domestically. And the accumulation of dollars outside the U.S. represents a transfer of wealth to other countries.

#ffw