Data shows global imbalances grew ahead of likely-deadlock in G20 tomorrow

Original piece here.

20101110

Comments

[Grand Supercycle]

EURO daily chart bearish warnings continue.

US Dollar daily chart bullish warnings continue.

http://stockmarket618.wordpress.com

[johny2]

the china wants those 600 000 000 000 dollars....it will ship lots of toys, shoes, clothes etc in return. in few years time both these goods and dollars will be pretty worthless. it sounds fair enough, except for those chinese that spend their life in factory.

[mraptor]

http://www.safehaven.com/article/2455/can-a-lower-dollar-really-improve-...

Why a Dollar Depreciation May Not Close the U.S. Trade Deficit

http://www.ny.frb.org/research/current_issues/ci13-5/ci13-5.html

What do you think ? Will the current depreciation help more than hurt to narrow the gap as the Fed paper says OR this time rules are different, because the foreigners are more prone to dump the dollars (because there is no end in sight of how low the Fed will depreciate the dollar)

[mraptor]

oops.. btw.. In short the Fed paper says approx if $ drops 10% trade balance will improve by ~12% in real terms and ~10% in nominal.

conclusion>>

Even a marked rise in exports, however, is by itself unlikely to erase the U.S. trade deficit. In 2006, that deficit stood at $759 billion. If imports and terms of trade remained constant, exports would have to grow 52 percent to single-handedly close this gap. Either import demand will have to become more responsive to exchange rate movements or adjustment will have to take place through other developments that would affect demand. These other developments might include increases in U.S. public or private saving (with related declines in U.S. consumption of all goods) or a rise in global demand driven by economic growth abroad or increased market access for U.S. exporters.

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