Economist John Mauldin says history shows that if the U.S. wants to reduce private and public sector leverage, it will have to figure out how to run a trade surplus. Mauldin says that a country cannot reduce total leverage while running a trade deficit — the amount of leverage used and the trade balance must balance out to zero. The good news, he says, is that decreasing the trade deficit creates jobs, and he adds that the energy sector is one area where the country could start if it wants to decrease the trade deficit. “If we reduce the energy [we use] and start exporting it … we can get there,” he says. Mauldin also talks about how he’d position his portfolio given the fiscal cliff drama.
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