Why America Should Love Its Exploding Trade Deficit

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		Tech Entertainment Wall Street Markets Strategy Sports Lifestyle Politics Europe Video Latest Friday, January 13, 2012 Why America Should Love Its Exploding Trade Deficit The latest Balance of Trade data came out this morning, and for the month of November, the US ran a $47.8 billion trade deficit with foreign trading partners. That was about $2 billion wider than expected, and a jump of about 10% from the previous month. Now technically, trade deficits are a negative for GDP, and so technically a wider deficit is seen as "bad." But history suggests it's 100% the opposite. Today we're updating a chart we've run before, which compares the year-over-year change in the trade deficit to the year over year change in GDP. Technically we've inverted the year over year change in trade deficit, so that when the trade deficit shrinks dramatically, the red line goes negative. What you can see, basically, is that when the trade deficit shrinks dramatically, so does GDP. And when the trade deficit goes up, so does GDP. It actually works out very nicely, going back about 20 years. So don't fret about a big number. Root for it!  Read » Also On Money Game Today: FRENCH DOWNGRADE: Bad News For Sarkozy, But Good News For Somebody Else French Yields In Perspective... This Is Not Good: Greek Creditors End Talks On Debt Swap Here's Why France Lost Its AAA Rating Advertisement CHART OF THE DAY: This Worrying Demographic Trend Is Bad News For Consumer Spending CHART OF THE DAY: The Skyscraper Index CHART OF THE DAY: It's Pretty Obvious What's Driving Unemployment Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: dwyld.kwu.jobhuntportal11@blogger.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Money Game RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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