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Trump’s Economic Era

What happens if America experiences a payments
surplus? With more dollars entering the country than
leaving, the supply of dollars on the global market
decreases, making the dollar worth more. Now
Americans will buy more from foreigners, and
foreigners will purchase less from America. This
reversal eliminates the problem of too much money
entering the country. Thus, over time, the economy
tends toward the point where the amount of money
leaving equals the money entering.

INTERNATIONAL MONETARY FUND

Countries with a balance of payments problem can
borrow money from the International Monetary Fund
(IMF) through Special Drawing Rights (SDR’s), which
is an entity composed of mixed currencies. Suppose the
value of the dollar were to plummet. The U.S.
government could then approach other countries, such
as Germany and Japan, and request that the IMF
transfer United States SDRs to their accounts. In return,
Germany and Japan would supply the United States
with euros and yen. The United States could then use
the euros and yen to buy dollars around the world, thus
increasing the dollar’s value.

The Chinese yuan has just recently been included
as the fifth currency in the International Monetary Fund
as a Special Drawing Right (SDR). This inclusion
reflects the ongoing evolution of the global economy
and is a significant change for the IMF. The yuan’s
addition is the first since the fund adopted the euro as a
part of the basket of funds. The inclusion acknowledges

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