Interesting chart you posted.
The thing I think gets left out of those is how much US business has been shipped off shore. GDP and the trade deficit are based on a world model decades out of date.
When you buy an "American" car, it's imported from Canada or Mexico. When you buy an "American" computer chip, it's imported from Taiwan. If you sell an "American" made bulldozer in Europe, it's made in Europe and never crosses the border. If you buy a toy made by Mattel, it's imported from their factories in China, and if a shipment goes to South America, it never sees the US.
In other words, I don't think you can base anything on GDP numbers, because most of it is off the balance sheet.
On another note, I was trying to remember if Japan was included in last month's currency swaps. They were:
bloomberg.com
From the above: "The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities."
If the yen is seeing a massive breakout against the USD, would that tend to suggest the yen bucket ran dry? How long before the euro bucket does the same? |
