Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: John Madarasz who wrote (83639)	3/21/2001 5:29:37 PM
From: Mark Adams	Respond to of 436258

The implicit suggestion was that as a percentage of GDP, the trade deficit may be lower today than, say 8 years ago.

To: John Madarasz who wrote (83639)	3/21/2001 9:15:13 PM
From: Mark Adams	Respond to of 436258

Well, I took some time to study the data at the links you provided. Thanks. More on what I found in a subsequent post. Regarding the trade deficit, a bugaboo with many bears. It does appear that it may have increased as a percentage of GDP, but it's difficult to assert for sure due to the caveat of chained dollars. Falling exports and rising imports adjust the trade balance until it matches the net inflow of capital. In effect, foreign investors will outbid foreign consumers for limited U.S. dollars until the investors satisfy their demand for U.S. assets. Of course, most day-to-day currency transactions are not directly related to trade, but demand for U.S. goods, services, and assets affects demand for the dollars needed to buy them, thus influencing the value of the dollar in global currency markets. freetrade.org You might say, in light of the dollar strength despite the trade deficit and recent share market performance, that we developed an alternative to gold that is much more easily created. Someone pointed out to me on this thread that gold provided a service (economic value), in that it formed the basis for a stable currency, thus decreasing friction, increasing trade and growth. It would appear the dollar has also performed this service of late, though it's manufacture doesn't require the large scale leach mining of it's distant cousin and predecessor.

To: John Madarasz who wrote (83639)	3/21/2001 9:19:01 PM
From: Mark Adams	Respond to of 436258

Observations on Personal Income between 1990 and 2000, Table 2.1 + More people working has boosted FICA withholdings + Interest payments have grown from 2.28% (94) to 3.03% (00) of disposable personal income, after falling from 2.7% (90). It would appear the personal interest coverage ratio, on a gross level has not grown to extreme. + Interest and Dividend Income represent appx 17% of personal income vs 57% wages. I was concerned that rate cuts might actually reduce personal income, and it's quite likely that this will occur to some extent. + Taxes as a percent of Disposable income have increased from 19% (90) to 23.6% (00). Gross Income, 16% (90) to 20% (00) Bracket Creep, higher employment, taxes on gains, taxes on Roth conversions? bea.doc.gov

To: John Madarasz who wrote (83639)	3/21/2001 9:22:13 PM
From: Mark Adams	Respond to of 436258

Observations based on Based on Table 8.1, Current Dollar series + Since 1987, Government expenditures have grown slower than GDP except for 1990-1991. The peace dividend? Resulting in a budget surplus? + The average personal consumption growth over the 10 year 1990-2000 period exceeded the gdp growth, (6.14% GDP growth vs 6.49% Personal consumption growth) but only the growth in the services component of personal consumption exceeded GDP growth (7.15% vs 6.14%). The services component includes housing costs. I didn't take the time to determine if higher housing costs were taking a larger portion of personal income. + Growth in both Durable and NonDurable goods exceeded their average over the past 2 years, A possible decline in durable purchases to support continued private investment? + Growth in Private Domestic investment exceeded GDP growth since 1990, except for 1991 & 1995. Growth in private investment continued to increase at a year over year rate of 10% in 2000. + Growth in Residential Investment dropped substantially in 1995 & 2000. Interest rate increases re-directed the flow of investment during these periods? Strong rebounds in residential investment occurred following these two declines. It would appear from the data the boomers will restrict durable goods purchases and residential investment before they will decrease private fixed investment. Table 8.2 seems to tell a different story than table 8.1, over the 1990-2000 10 yr period. bea.doc.gov