>> international trade has to reach an equilibrium where everyone exports as much as they import (just as everyone in town must ultimately sell the same amount of value as they buy)
I'm not sure that must or will happen. Maybe the US will decline as a German customer, but India will step up, for example. Germany might be able to go on relying on exports for ever.
And a wise shopkeeper brings in more than they earn for decades, saving up for when their is no income (hard times or retirement).
Dependance on exports makes Germany vulnerable to worldwide financial changes, but dependance on domestic sales makes them vulnerable to domestic crises, like a falling birth rate. Pick your poison. I'm not sure the choice is very clear. Although maybe the answer is "spread your risks by having a balance," which I suppose was your original point.
>I'm not sure that must or will happen. Maybe the US will decline as a German customer, but India will step up, for example. Germany might be able to go on relying on exports for ever.
The thing is, money can't really be created or destroyed, because it's just a marker for wealth. If country X is paying Germany money for its exports, that money is "really" a promise of future goods/labour from country X or someone they trade with; it only really works if it's "redeemed" from the same country in the end. If the trades were denominated in some scarce resource like gold, sooner or later all the gold would end up in Germany; likewise trading in euros within the eurozone.
(Obviously with fiat money if country X is paying in their own currency (let's say shillings) then they can continue to print more, but that devalues everyone's shillings (including the ones that have now made their way into German pension funds), German companies start charging more and more for their exports so the shilling inflates faster and faster and it all ends very badly for country X.)
((In reality, of course, neither of these extreme scenarios usually comes to pass. What would tend to happen is that as more of the international money supply is concentrated in Germany, other countries can't afford to pay as much for German exports, while Germany has more money available to spend on imports, and the market adjusts so imports and exports balance out))
>And a wise shopkeeper brings in more than they earn for decades, saving up for when their is no income (hard times or retirement).
True, but I think the analogy breaks down here. Thought if Germany were to "go into retirement" as a country the effects on the global financial system would be... interesting to say the least.
I'm not sure that must or will happen. Maybe the US will decline as a German customer, but India will step up, for example. Germany might be able to go on relying on exports for ever.
And a wise shopkeeper brings in more than they earn for decades, saving up for when their is no income (hard times or retirement).
Dependance on exports makes Germany vulnerable to worldwide financial changes, but dependance on domestic sales makes them vulnerable to domestic crises, like a falling birth rate. Pick your poison. I'm not sure the choice is very clear. Although maybe the answer is "spread your risks by having a balance," which I suppose was your original point.