An article titled ‘U.S. May trade gap falls on export strength Q2 GDP decline now looking less that feared’ reports the U.S. net trade deficit fell 9.8% to $26 billion in May (from April).  9.8% seems like a lot, but it is ‘only’ $2.8 billion expressed in absolute $.  The article goes on to say “economists were blindsided by the improvement”, and “The trade gap has narrowed sharply over the past year as the global recession and worldwide credit crunch have caused trade to dry up”.  One reading of this is ‘we’re on our way, boys’.

I believe that every month the U.S. net trade deficit is in negative territory is a month when foreign governments own more U.S. paper and the U.S. becomes increasingly dependent on its trading partners.  Given the shift in manufacturing jobs since the turn of the century, I think it unlikely the U.S. will in the foreseeable future, if ever, get into positive monthly trade surplus territory.  I consider that highly worrisome from the point of view of U.S. economic dependency issues going forward.

Click here for Research on Gold Stocks.

See Blog Legal Disclaimer

Email this Post to a Friend.

Trackback URI | Comments RSS