The Long View: Current Account [BruceMcF]

This post could be seen as following up on a number of good posts connected to the state of play with the most recent current accounts numbers and events in US$ foreign exchange markets. However, that would be an illusion ... indeed, as you can see above, "2006" is not even in view here. The focus here is on the long term.

This is what a trade deficit blow-out looks like. Just in case someone asks you for an example, you can send them that graph. And just to be clear -- these are 5 year sequential averages, for five year intervals 61-65, 66-70 and so on. The actual values in current US$:

• 2001, -$389b current (-$363b trade)
• 2002, -$472b current (-$421b trade)
• 2003, -$528b current (-$495b trade)
• 2004, -$665b current (-$611b trade)
• 2005, -$792b current (-$717b trade)

So it is both very bad, and getting worse at a rapid rate.

And there is far more that I want to say on this than fits the print ... so the main post is now sitting down in the Saturday archives, which means that you can reach it by clicking here to get under the fold.