Saturday, May 14, 2011

Trade Deficit, Budget Deficit..

Trade Deficit in U.S. Widens More Than Estimated on Surge in Oil Imports
Source: Bloomberg News


The U.S. trade deficit widened more than forecast in March as the highest oil prices in more than two years boosted imports, eclipsing record exports.

WTI Crude price rose to as high as 106.94 on 7-Mar-2011, corrected to below 100 yesterday. Last traded 99.06 USD per barrel.

At the same time, US Dollar index - against a basket of 6 currencies, plunge to as low as 72.86 on 4-May-2011, rebounded to 75.405.

We believe the current situation will keep driving up the cost of imports (lower USD, higher cost of production) ---- while the weak currency will keep US competitive of exporting the goods to emerging markets, yes, as a result of weaker dollar, we shall see more Coach bags, Prada Bags, Gucci Bags... because it looks cheaper with the weak currency now :)

And... ah ha~~ I am very very happy playing with the kids, and talking to my brother, and talking to my sister-in-law, I have so much fun, and I love my brother, I love my niece, I love my sister-in-law! :)

Certainly my brother has so much talent, just a click or two, he can give me an answer -- of a question that has been troubling me for months! oops... come back to Economics. :p

The Trade Gap in US is going to widen a bit... but it must come back to an equilibrium.

The trade gap rose 6 percent to $48.2 billion, the biggest since June, from $45.4 billion in February, the Commerce Department reported today in Washington. The median forecast of 72 economists surveyed by Bloomberg News projected it would widen to $47 billion. Sales abroad climbed by the most in 17 years.

Budget Deficit...

US Budget Deficit to Exceed $1 Trillion Again This Year
Source: CNBC

Curb federal Spending, increase tax..
We need more jobs, more employment (more people working), more tax revenue for the government, maintain low interest rate so that we can continue to stimulate the economy, continue to weaken the dollar by printing more and more paper money...

But with QE2 coming to an end (in 2 weeks...?) speculations and rumors are all over the places.

What would be the future of US Economies? DJIA, Nasdaq 100, EUR/USD, USD/JPY, and the precious metal like Gold and Silver?

2 comments:

  1. Not sure how they are going to pay for all those debts. Obscene sum of amount.

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