Booming energy production, along with a weak dollar, may foster a fundamental improvement in the trade balance.
By: Milton Ezrati
Could it be that the U.S. trade balance is headed into the black? At first blush, the prospect looks dubious. This country’s trade deficit has drifted deeper into the red for so many decades now that few can even conceive of lasting improvement. Even so, that is what seems to be in prospect. The gap between what this country buys from the world and what is sold to it has already narrowed considerably, and shows every indication of continuing to do so because of currency shifts and, more fundamentally, because of alterations in China’s and Japan’s economies and from the remarkable turn in the mix of global energy production.
The old, depressing trade patterns had persisted for so long that they seemed immutable. They remain an underlying assumption in just about all economic, financial, and currency analyses. And such a default to deficit is understandable. . . Read Full Article