There are only two ways that the US trade deficit can be eliminated:
One depends on US policy.
The other depends on foreign action.
The necessary change in US policy would be to cut off the money spigot. As long as the money spigot is pouring out more money into the US economy, the money will flow to where it gets the best deals, which is where it is going now: to imports. The money spigot is turned off when interest rates are raised so high, nobody wants to borrow; since borrowing is what produces the money that flows from the spigot, additional borrowing must be halted.
We know that can't be done, because it would produce a US revolution overnight. And besides, if the money flowing from the US stops, then the rest of the world rolls over and dies, too. To halt, or even to slightly reduce the creation of more credit (debt) is the last thing the Fed wants.
So this rules out Plan One.
Plan Two depends on the policy of the rest of the world. The rest of the world would have to stop regarding the US dollar as a Reserve Currency. That means, the US Dollar would become just the US Peso. You can't buy anything on a world market, for pesos. Today, you have to change the pesos for dollars which your Central Bank has, or you hope it has. If your country does not export more than it imports, your Central Bank does not have dollars, and you can't import a thing. This has happened to Mexico in the past. It's not a pleasant situation.
If Americans had to exchange dollars for euros, for example, then the Fed would have to have euros available. If the US did not export as much as, or more than it imported, then the Fed would not have euros. That's the other solution to the trade deficit problem.
However, suppose the euro became the reserve currency of the world. The US would have to export as much as, or more than it imported, either to and from the European Union, or to and from some other country which got its euros by doing just that.
The shoe would be on the other foot for the US; it would be in the exact same situation in which the rest of the world is today, with regard to the US.
The question arises: What could the US export which the rest of the world wants? The US manufacturing base has been seriously damaged, to put it mildly.
Another question is, Just what is going to happen to all the manufacturing base in the rest of the world, and the employment of its workers, if the US stops importing so much and attempts to export enough to put its trade into balance? A huge disaster, is what.
Bottom line: nothing will be done, either by the US, or by the rest of the world, to correct the US trade deficit. The trade deficit will grow to one, two trillion dollars a year and more, unless some great shock, out of the blue, puts an end to the process.
Until that great shock arrives, we shall see world inflation going up, and up, and up. Prices will go through the roof, all over the world.
The containment of the gold price will come to an early end. That is certain.
The world inflation will also come to an end, eventually, and the world will be in ruins. Industrial installations all over the world will turn to moldering heaps of rust. (Russia is littered with such heaps of rust, left by the fallen U.S.S.R.) The imagination cannot encompass the depth of the disaster.
This is not what I would like to see, but that's the way this is going to play out.
Forget "the Dark Ages". The "Dark Ages" built Gothic cathedrals which still amaze us. What is coming has no parallel in history. Owning gold will help, but there will remain the more important problem of keeping alive, in order to own it.
Those least affected will be isolated tribes such as those that inhabit the Amazonian forests.
This is the outcome of "The Age of Reason", which has turned out to be the prelude to the present "Age of Madness".
Hugo Salinas Price