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To: per strandberg who wrote (49325)	6/24/1999 4:28:00 PM
From: IceShark	Read Replies (1) \| Respond to of 86076

Per, is that first 4 months of '99 an annualized type of figure that would indicate the year figure would be ~ 220? Holy smokes if it is! (I allways thought trade deficit numbers were what they were, but I'm not so sure anymore.) There is something funny going on with those figures. Flat for 4 years but exponential on either end. I will have to think about that ......

To: per strandberg who wrote (49325)	6/24/1999 6:19:00 PM
From: BGR	Read Replies (1) \| Respond to of 86076

Per, Let me first apologize for my display of impatience in my earlier post. You are a gentleman and I always enjoyed your posts and discussions with you. Now, the recent explosion still leaves the trade deficit at around 2.2% of the GDP (which I pegged at 7 trillion approx.) which is not worrisome in any way. The problem with comparing and taking ratios of small percentages is that a small absolute growth turns out to be a huge relative growth. For example, CPI growth from 0.1% to 0.7% is a relative growth of 700% (yikes!) but an absolute growth of 0.6% (which is still very worrisome, thank god we are beyond that now). In other words, ratios of percentages do not tell the full story, in particular when they are extrapolated into the future (like expecting a 4.9% monthly CPI growth). Hence, a trade deficit of 1.2-1.3% of GDP to 2.2% of GDP is really a growth of about 1% and not 60%. I had a similar discussion with Skeeter Bug about DELL's market share growth. In any case, the last two years are rather unusual. Recessions abound in countries which for some reason have abysmal domestic demand at present, hence there really is no one other than the USA to soak up their products. At the same time, the dollar needs to stay high relative to their currencies so that the products do not become too pricey for the US consumer. In short, several countries in the world want to run a fire sale and throw in a 90 day no payment option (by buying US bonds with the trade surplus) and the US is the only country that is left as the consumer to this bonanza. It is taking on loans, sure, but to date the loans are manageable. When the consumer confidence bounces back in these countries, the trade deficit problem will solve itself. For the economies to bounce back and the consumer confidence to rebound, the production needs to remain steady with stable demand in the forseeable future. So, the strong US dollar and growth in the US trade deficit are both needed for the long term growth of the global economy and will hopefully be self correcting as well. -BGR.