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.

Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (8573)	5/22/1999 11:04:00 AM
From: see clearly now	Read Replies (3) \| Respond to of 9980

Please excuse me for dropping in on this superb thread. I have often wondered if there is a list of all the categories that are included in the trade deficit.ie:does it include royalties on inventions, films, music etc; does it include profit from US companies in foreign countries; does it include shareholder return from US companies who make there money in foreign locations; does it include money made by US citizens from speculation in foreign exchange markets (derivatives etc) and more?...and also how accurate is the accounting? There is a huge profit derived from the US lead in certain forms of culture, technology and innovative investment technique ..and I wonder if its all accounted for...?

To: MikeM54321 who wrote (8573)	5/30/1999 7:25:00 PM
From: Liatris Spicata	Read Replies (3) \| Respond to of 9980

MikeM- <<Who would have thought? And how long can it go on?>> Something tells me you're a numbers guy. Well I've been worrying about the trade deficit for two decades, and all that worry hasn't gained me penny, as best I can tell. But here's a little except from Gene Epstein's article in this week's Barrons, entitled "What Me Worry About Trade Data?" with the subtitle "Yes, particularly when Alan Greenspan does". =================================================================== In 1998, the U.S. ran a $248 billion trade deficit in goods, up from $198 billion in 1997. In other words, imports of goods were $248 billion higher than exports. We imported so much because our economy was booming and because consumers were spending a record share of their income. ... But while goods are the main component of our international trade, we do trade in services like law, finance, design, computer programming and advertising. In '98, the U.S. ran a surplus in services trade of $79 billion, down slightly from the $88 billion surplus in '97. The deficit in goods and the surplus in services, which came to $169 billion in '98, is generally what we think of as the trade deficit. But the current account includes two other items, the first of which is unilateral transfers. This refers to the net transfer of money from both government and private citizens, and not surprisingly, the U.S. generally sends a lot more abroad than it receives. In '98, this account ran at a deficit of $42 billion in '98, up slightly from $40 billion in '97. Finally, there's the balance of investment income, and here we get a bit closer to Greenspan's concern. U.S. investors own assets abroad and foreign investors own assets in the U.S., both of which yield income. Until 1997, our investment income balance ran a surplus every year. But in '97, we earned less than foreigners on our investment income by $5 billion and in '98, this deficit jumped to $22.5 billion. The $248 billion goods deficit, $79 billion services surplus, $42 billion deficit in unilateral transfers and $22.5 billion deficit in investment income brought the 1998 current account deficit to $233.5 billion, up from $155 billion in '97. ... But what's not to like about this situation? Well, first there's the hot- money issue. If for any reason Asian and European investors suddenly exited en masse from our markets, the resulting crash could be harmful. Larry