"As for the current "account deficit" and "trade deficit", I am not sure if the quarterly figure of $47 Billion you cited is the one or the other, our current rate of trade deficit is close to (but not there yet) to $45 billion per quarter, not a pretty picture, but a necessary one, if we are to help the rim to regain balance, but if Japan does not succeed in its consumption promotional effort, the situation will grow worse, and our ability to continue will be impacted."
Zeev I'm not sure about the figure I quoted either. My figures came out of a Business Week article and it was poorly written....but, more important, do I see a small crack in the case for the bulls? I think what you are saying above is, there is only so much Americans can buy. Unless Japan does it's part, the situation will grow worse. Whose situation? Are you referring to the Asian Tigers? And did you mean our equities markets will be impacted, or were you referring to simply our GDP(as a result of the Tigers going into another tailspin)?
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"Because we are so close to the number ($51-55 Billion in trade deficit per quarter)where weakness in our dollar sould stem the flow of imports, I do not think that the yen has much more weakness than my target of 156 yen/dollar in it (some "learned people are claiming that the yen will go to 276 yen/dollar, and i wonder what potion they are on). This leaves my general scenario for the rest of the year intact, topping in August followed by a "wobbly" period of a month to six weeks, and then a nasty decline in or about October."
Interesting. I'm assuming you must have some technical indicator that shows if our trade deficit goes to the quarterly $50-something billion level, then there is a good chance the greenback will FINALLY weaken. And that in turn, may keep us from buying Asian goods. If I read this correctly, and we do go to $50-something billion quarterly deficit, do you still predict a resumption of the bull market after the nasty decline?
Thanks for your insights,
MikeM(From Florida) |
