A trading nation is a nation in which foreign trade makes up a big percentage of its gross domestic product. It’s a country that use the currency of one country to buy goods from countries that are located within its borders, and it’s also a country that exports most of its goods. If you’ve ever been to a nation that is a major exporter of goods to its trading partner, then you know what I’m talking about. In this way of thinking, it’s easy to see how the stock market, which tracks international trade, can be very similar to the stock market of a trading nation.
So how does this apply to the United States? Well, if you look at the structure of the stock market, you can see how stocks are made. A company is either going to raise capital through a debt issue, or it’s going to issue equity to raise capital. The company with the most funds raising is able to raise the most stock, and therefore becomes the largest shareholder. That means that this company has the most control over the economy meaning that they have the potential to dictate the interest rates on their debt, as well as deciding which country they export their goods to, and ultimately, what currency they will sell their goods in.
If you take all of these pieces of the pie and add them all up, you can see how they can potentially effect the economy of the United States. If we continue to let international corporations write the rules for how the money is used in the US, then we will continue to see our national debts skyrocket, and we will continue to lose jobs at a record rate. Free trade is great, but this type of freer trade will have dire consequences if it is allowed to continue unchecked. Make sure you understand the difference between a trading nation by reading an expertly written book that explains the difference.