How bad is the trade gap crisis?
*Reuters, March 14, 2006:
U.S. current account gap balloons in 4th quarter
"The U.S. current account deficit widened more than expected in the
fourth quarter to a record $224.9 billion as the goods trade gap
ballooned, pushing the current account gap to a record $804.9 billion
in 2005, government data showed on Tuesday.
The quarterly shortfall was much larger than Wall Street forecasts for
a deficit of $217.7 billion. The Commerce Department revised down the
current account deficit in the third quarter to $185.4 billion, from
the previously reported $195.8 billion.
The current account, the broadest measure of U.S. trade with the rest
of the world, includes both trade in goods and services and investment
flows.
The deficit widened $136.9 billion from 2004 to $804.9 billion,
representing 6.4 percent of gross domestic product, up from 5.7 percent
in 2004, the Commerce Department said.
The ballooning current account deficit has been attributed to high U.S.
consumer spending and a low saving rate. Some economists believe it
leaves the United States vulnerable to the changing appetites of
foreign investors and may be unsustainable in the long run."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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