Conservative Economics

Advertisement

Recent Tweets

Follow capflowwatch on Twitter
Page 2 of 212
Category: US Trade Deficit

This category includes articles that discuss the balance of trade of the United States, usually with regards to such topics as foreign holdings of US dollars, US credit markets, and the flow of funds.

The balance of trade (or net exports is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation’s imports and exports. A positive balance of trade is known as a trade surplus and consists of exporting more than is imported; an negative balance of trade is known as a trade deficit or, informally, a trade gap. The balance of trade is sometimes divided into a goods and a services balance. [Wikipedia]

US Trade Deficit

America’s best unemployment insurance

Unemployed men hop train (Canada, 1933)

When the Sage of Omaha, Warren Buffet, fretted last year that the trade deficit signified that foreigners were taking over the United States, he echoed common misunderstandings about the excess of US imports over exports and the growing volume of dollar assets held by the rest of the world.

The nice thing about the US trade deficit is that it represents the exchange of foreign goods and services for dollars, not foreign money.

January 2006

Trade deficit continues to support bonds

More imports than exports creates a trade deficit

The excess of imports over exports means that cash is flowing into the US capital market from abroad, which should continue to prop up long bond prices. The January trade deficit, annualized, represents a 13% increase over the trade deficit of 2005.

Since the trade deficit increased 18.3% in 2004 and 15.1% in 2005, the current rate of increase seems to indicate slower growth in the trade imbalance.

US Trade Deficit

Interest rates have been falling for decades

As the trade deficit has increased, US bond interest rates have fallen.

Since the 1980s, the US. trade deficit has been a constant force in the American economy, rising more some years than others, while corporate bond yields have been generally falling.

Because rising trade deficits lead to increased demand for fixed income securities, and because issuers have not fully met this demand, the price of bonds has risen for twenty years, while bond yields have fallen.

Page 2 of 212

Featured articles on inside pages

Stock buybacks

Warren Buffett attacks buyback schemes

In the 2005 Berkshire-Hathaway annual report, Warren Buffet points to the unethical aspects of the buyback-option schemes so common in the US stock market. He noted that "Too often ... the deck is stacked against investors when it comes to the CEO’s pay. ... every dime paid out in dividends reduces the value of all outstanding options"
More ...

Securities Analysis

Truth, Fact, Opinion

In security analysis, it is important to get the facts, before forming an opinion. Effective collaborative research calls for rigorous separation of the fact-gathering from the decision-making stages of the process. More ...

US Politics

What is the future of private pension plans?

Between 1999 and 2002, US private pension funds lost US$ 1.2 trillion in value. It would almost seem that pension fund managers had been speculating with retirement money, attempting to beat each others' short-term performance statistics, with little interest in safeguarding the assets of plan beneficiaries. More ...

US equities

GAO pooh-poohs a Boomer bust

In 2006, the GAO issued a report saying that the retirement of the Baby Boomers should not have a negative effect on stock prices. This article reviews the GAO reasoning and concludes that the conclusion is not credible. More ...

US Bonds

Bond demand exceeds supply for a decade

Over the decade, 1995-2004, the demand for US bonds of all types has surpassed new bond issues in eight of the last ten years. This is the reason that bond prices have held firm, even in 2003, when net new issues reached almost $1.8 trillion. More ...

World Economy

Working off the US trade deficit

Foreigners hold $16.8 trillion in US financial assets as a result of selling more goods to Americans than they buy from them. Since the 'deficit' is in dollars, the US has no problem in 'paying it off'. More ...

Custom Search

Subscribe / Follow

Subscribe via RSS Subscribe via Email

Site navigation

Capital Flow Watch has hundreds of articles on economics and investments.

Articles have excerpts on the front pages, and on tag, category, search and archive pages.


Review capital-flow-watch.net on alexa.com

» Blog Guide

Excerpts by Category

Article Calendar

December 2010
MTWTFSS
« Sep  
 12345
6789101112
13141516171819
20212223242526
2728293031 

Stock Quotes

DJIA11465.99  chart +0.49%
NASDAQ2638.91  chart +0.05%
S&P 5001245.44  chart +0.41%

Ftse 1005860.75  chart +0.82%
Dax7029.39  chart +0.33%
Cac 403892.44  chart +0.91%

Nikkei 22510293.89  chart +0.80%
Hang Seng Index23317.61  chart +0.67%
Straits Times Ind3182.32  chart -0.10%

Eur To Usd1.34  chartN/A
Usd To Jpy83.28  chartN/A
Gbp To Usd1.59  chartN/A

2010-12-13 14:27