USA deficits: Mis-understood

Friday, November 14, 2008

 Economic Times- Dollar will be de-valued :  the author reports that the US has an external debt of USD 20 trillion...this is nonsense...and for a respectable paper to report this is irresponsible.   As I have shown in my post  US Deficits: The other side  the net external debt is $2.4 trillion and the USD has a positive cash flow of $100 bln annually from this debt.

Even the trade deficit is mis-understood...excluding the purchases from US subsidiaries overseas and oil imports from US integrated oil companies off-shore the trade deficit is about 2%.

Everyone wants to jump on the trash USA so at your peril...USA has the strongest economy and balance sheet in the world.  Current problems included, it will continue to be the economic power for decades to come.

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