Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: TobagoJack who wrote (111388)	5/9/2010 9:54:51 AM
From: Haim R. Branisteanu	Read Replies (3) of 116555

I only hope that they will convict more than few so called investment banks and force them to pay out substantial damages. The present situation if it will be lasting will increase the US trade and budget deficit by at least $2 to $4 billion a month and job losses will resume. For each $1 billion a month, in trade deficit, around 10,000 to 20,000 jobs will be lost and the US budget deficit will grow around 300 million per month In summary low exchange rate of the EUR v USD is bad for the US economy After the speculative flow of funds will dissipate this will be very evident with a lag of around 60 days. Last year trade deficit with the EU was around $60 billion average EUR/USD was around 1.4. In 2005 trough 2007 trade deficit averaged over 120 billion a year and the exchange rate was at present level. Assuming $110K to $130K GDP per employee in the US, it is easy to extrapolate how many jobs will be lost and with them lost income tax revenue, if the trade deficit with the EU will rise to $120 billion a year.

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