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View Diary: Welcome to the Wonderful World Of Commodity Inflation (175 comments)

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  •  I don't think balance of payment is right, either (1+ / 0-)
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    That is because it measures raw money flow, regardless of whether there is any underlying economic activity.

    For instance, it would count Americans parking money in foreign banks as an outflow (the equivalent of an import), even though nobody produced anything. Once the American withdraws the money, it would count as an inflow again. I don't think it's surprising that there are huge outflows in the current account deficit.

    I'm drawing a blank right now, but there is a third measurement that is closest to accurate in including both goods and services.

    Army 1st Lt. Ehren T. Watada, Lt. Cdr USN Matthew Diaz, SPC Eli Israel: true American heroes.

    by sdgeek on Tue Sep 25, 2007 at 10:03:36 AM PDT

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    •  It's correct (1+ / 0-)
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      The current account deficit measures both goods and services.
        It's unsustainable.

      "It's no wonder that truth is stranger than fiction. Fiction has to make sense." - Mark Twain

      by gjohnsit on Tue Sep 25, 2007 at 10:44:10 AM PDT

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    •  services are in the regular trade deficit (1+ / 0-)
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      the US sells about $430B, buys about $370B - its included - Most reports talk about the trade deficit in "goods & services", while current account includes investment income.

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