7. Influence of external trade surplus

So far we have been analyzing debt just with internal sources of financing, either debt or monetary policy. But as already mentioned in chapter International trade, trade surpluses are sought-after by everybody. No we can have a look in model numbers how important impact can such trade surplus have on debt.  Let´s incorporate this category into our model.
The category will be watched as % of GDP. Consequently the transfer amount, based on % of supplementation of missing buying power will be lower by exactly this number as this part of money will come from abroad and so will not have to be replenished from debt or monetary policy.
The final adjusted buying power (adj BP) will now consist from original BP, external trade surplus and transfers.

If there is no surplus, we can see the old result after 40years of 67% debt to GDP.

With just 1% trade surplus as % of GDP gives us much lower debt of 47%!

Now compare this with really positive surplus 4% of GDP:

I believe you can see the magic of conquering other markets, neocolonialism and external sales benefits.

With just 1% trade surplus of GDP the debt is after 40years just 47% compared to 67% with no surplus and with 4% trade surplus is started even declining!!!

Obviously trade deficits are having reversed affects and are worsening the debt position.

The theoretical understanding that companies profit margins are dramatically rising with exports can be clearly documented by example, where with just 6% trade surplus and with relatively the same extent of debt and monetary policy help (each 1,6%) we can get the same levels of final debt after 40 years (63% compared with 67% in original scenario with no trade surplus) but with 30% profit margins for companies!!!

The available profit margins and trade surpluses needed to maintain negative debt growth can be seen: