US current account deficit $1.5bn a day

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373121074

The US current account deficit widened to $144.9bn (£80bn) in the first quarter - a record in dollar terms, and a sharp rise from the $127bn deficit in the fourth quarter of 2003.

The current account deficit, a broad measure of trade and investment flows, is equal to just over 5 per cent of US gross domestic product, an increase of half a percentage point from the previous quarter.

The deficit reflects the fact that US is spending more than it earns, as well as weak demand growth outside the US, which affects US exports. At current levels, the US needs to attract more than $1.5bn of net investment per day from abroad to cover the current account shortfall.

The wider-than-expected deficit put pressure on the dollar, which declined against a basket of currencies and reached a six-week low against the yen in morning trading.

<snip>

However, a change in behaviour among foreign investors could lead to a sharp decline in the dollar and a rise in long-term interest rates.

...more...

This credit card is eating me alive!

We look down on the empty chasm below.....

We are moving closer and closer to financial insolvency. Picture the guy who drives down the freeway in a convertible. He wears Armani suits. Gucci leather loafers. A Rolex watch. He's got a stack of credit cards in his wallet, and they're all maxed out. That's us.

But he doesn't care. It's summer. The gentle wind is blowing in his face, as he hangs his arm out of his unpaid Beemer.

Meanwhile, other countries around the world see what we are up to. We're basically involved in a credit-and-scam operation that leaves other countries holding the bag.

At some point, they either can't afford to subsidize us any longer, or they will get fed up doing it.

Guess who's going to bite the bullet.

In large part, this is the legacy of Robert Rubin's "strong dollar" policy, so it isn't all Republicans.

Back to the Front Page with MORE nasty reality--brought to you by bu$hco, Unelected Yet Unafraid.

:freak:
dbt