Holes in our national accounts are not to be caulked over by fiat currency and deficit spending.
Despite worsening terms of trade and appreciation of our currency, the trade deficit is the same as last year.
The Swiss franc has rallied over the recent quarters as just about the sole European alternative to the 17-nation single currency unit whose weaker deficit-ridden nations have raised angst for the euro.
While buffeted at times by Europe's deficit and currency woes, an overall perception of growing economic stability was a major reason Obama defeated GOP challenger Mitt Romney in November by more than 4 million votes.
Worrywarts abound in international finance circles--there's always nail-biting about this currency fluctuation or that account deficit.
These currency movements offset the trade deficit by eventually bringing all of the dollars home.
In May and June Turkey was hit particularly hard because of its high current-account deficit and expensive currency.
But don't expect it to push too hard for other countries, particularly China, to revalue their currency to reduce the trade deficit.
If China were running a large deficit, its currency would now be under severe downward pressure given all the concerns about its economy.
His remarks briefly depressed the dollar by prompting fears that America might again try to use a weaker currency to reduce its trade deficit.
It seems rather surprising, for example, that Britain can still borrow for ten years at 3.5% when its central bank has been so relaxed about letting its currency depreciate and its budget deficit is among the highest in Europe.
Mr Salinas's boom was unsustainable, based as it was on high borrowing, a big current-account deficit and an overvalued currency.
The unquenchable appetite for gold coins, bars and jewelry has swelled India's trade deficit and weakened its currency, making crucial imports such as fuel more expensive.
This surplus currency was then presented to the deficit country.
FORBES: Occupy Wall Streeters Should Be Livid About Losing The Gold Standard
In spite of what they believe is an obvious connection between the currency exchange rate and the trade deficit with China, the empirical evidence does not support such a connection.
For years economists have predicted that America's huge current-account deficit would eventually cause its currency to plunge.
He said the wide deficit is weakening the local currency and may fan inflation that has slowed in recent months.
Next year Mexico's economy will be much more strongly placed than it was in 1994, with less debt falling due, a smaller current-account deficit, and a floating currency instead of a fixed one.
But there is no discernible inverse relationship between the value of the Chinese currency and the size of the bilateral deficit or between the size of the bilateral deficit and the number of jobs in the U.S. economy.
FORBES: Mitt Romney: Fighting the Last Decade's Trade Battles
The way a country handles its deficit does a lot for its currency, says Axel Merk CIO of Merk Investments.
The new government is under the same grinding pressure to reduce the public deficit to qualify for the single currency.
Differential growth and deficit spending rates then cause the European currency to fly apart.
After all, the currency has no yield support, a continuing trade deficit and the prospect of endless fiscal deficits.
As seen through the foreign currency exchange, the American still wants a trade deficit for the same reasons she did before in the bartering system.
FORBES: The Benefits of Free Trade Agreements: The Country Always Wins
And on the rebalancing front, what role will currency discussions and the U.S. budget deficit play in the rebalancing discussions likely in Beijing and also in the APEC?
Nevertheless, a large deficit does mean that an economy and its currency may struggle if foreign-capital inflows suddenly dry up.
Indeed, like Argentina, Italy faces a growing competitiveness loss given an increasingly overvalued currency and the risk of falling exports and growing current account deficit.
American politicians say Beijing deliberately undervalues its currency, which contributes to the growing U.S. trade deficit with China.
But it is true that, within a single-currency zone, habitual surplus countries tend to be matched by habitual deficit ones.
Thanks to its population growth and the dollar's role as a global currency, America has more fiscal room than any other big-deficit country.
应用推荐