EUR/USD fell today despite the
U.S. trade balance deficit was at $39.9 billion in December — down from $41.6 billion in November but below the quite optimistic estimate of $35.5 billion.
Crude oil inventories continued their gaining spree and increased by 4.7 billion barrels last week.
Treasury budget deficit in January was at $83.8 billion — up from $17.8 billion surplus in January of 2008. The forecast deficit for the previous month was at $78 billion.
February 14th, 2009 at 5:19 am
I thought trade deficits mattered in the wrong way until I read an article by Kevin Price of the Price of Business Show. He noted that a trade deficit may be a sign of strength at http://www.BizPlusBlog.com.
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Andrei Reply:
February 14th, 2009 at 9:43 am
This articles makes wrong conclusion from the right facts. When the country imports more than it exports it’s increasing its private and public debt – thus “bubbling” the consumer-orientated economy. If the GDP grows at a reasonable ratio to the gains in debt than the trade deficit doesn’t really matter much. A growing or falling trade deficit isn’t someone’s success or failure its just some measure of the currency and debt flows.
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