US current account deficit jumps to 218.4 billion dollars

[IChing]

WASHINGTON (AFP) - The US current account deficit rose in the second quarter to 218.4 billion dollars, data showed, in a development that analysts said could pressure the US economy due to rising debt to the rest of the world.

The Commerce Department preliminary estimate of the current account gap -- the second largest on record -- was wider than the 213.5 billion dollars expected by private forecasters.

Additionally, the agency revised up its estimate of the first quarter deficit to 213.2 billion dollars from 208.7 billion initially.
The latest figures Monday showed the current account deficit, the broadest measure of trade and investment flows, represented 6.6 percent of US gross domestic product.

The deficit is equivalent to a huge debt owed by the United States to the rest of the world. So far, the US economy has financed its current account gap on favorable terms thanks to foreign demand for US securities.
Some argue that the deficit is a sign of a US economy that is stronger than that of its trading partners. But other economists say that the deficit must be repaid in some fashion, with potentially troubling effects for the US dollar.

"The cumulative effects of this borrowing are frightening," said Peter Morici, economist at the University of Maryland School of Business.>>>>>snip

http://www.afp.com/english/news/stories/060918155250.dfmxtoqy.html

[NVMojo]

1. Bush popularity goes up as US sinks into a black hole ...

[OrangeCountyDemocrat]

2. Nobody Cares

There are WAAAAAAAAAAAAAAAAYYYYYYYYYYY Too Many MORONS in this country, and they just don't give a shit about something as complex as the "trade deficit."

I'm sure the market will react positively to this, as there certainly is something good in this report they can point to and cheerlead for.

[rodeodance]

3. a real disconnect!

[orwell]

4. Dollar go...

...bye bye...

[xchrom]

5. that's not good. n/t

[Gregorian]

6. And this is before the less conservative accounting is instigated.

Aren't they going to be using a cash flow accounting method? I read about this recently. It's supposed to more accurately reflect the true deficit.

[Earth_First]

7. Anyone care to break down exactly what "current account deficit" means?

Maybe dumb it down a shade? Thanks!

[OrangeCountyDemocrat]

8. So?

Gas is down over the past month. I can fill up my hummer for under $100.

:sarcasm:

[cliss]

9. WE ARE BROKE BABY.

Get used to it, folks. This did not happen yesterday. This is a
long

long

long

long slide which has been going on for a long time.