Recessionary US Economy Will Limit Dollar Recovery
Aug 18th, 2008 | By Chuck Butler | Category: US Dollar & Forex TradingThe dollar may have gotten up from its death bed, but the recessionary US economy will limit the recovery time, says The Daily Reckoning’s currency expert, Chuck Butler.
Friday, we saw some data that had mixed reviews. The TICs data showed once again that the US is having a difficult time attracting enough foreign investment to finance the Current Account Deficit. The Net Security Purchases by foreigners in June totaled only $51 Billion… Shoot, that doesn’t even cover the Trade Deficit, much less the foreign direct investment and interest that is added to get the Current Account!
On the good side of the US ledger, we saw Industrial Production post a 0.2% gain in July, adding to June’s 0.4% gain.
This is a good sign for the economy, but one that gets overlooked by the markets. In addition, Capacity Utilization inched up to 79.9%… If you went by these two pieces of data alone, you would think the U.S. economy is doing well… Unfortunately, that’s not true.
The NAHG Housing Market Index is the only piece of data we have printing today, but get ready for PPI, Housing Starts, and Building Permits tomorrow!
According to The Wall Street Journal: “Uncertainty continues to permeate the economists’ forecasts, as they remain almost evenly split for the third month in a row on whether the U.S. is currently in a recession. They expect the economy to slow to a crawl in the second half of this year, registering just 0.6% growth at an annual rate in the fourth quarter. At the same time, the forecasts call for continued job losses and elevated inflation, with oil prices above $100 a barrel well into next year, though down from current levels.”
Source: Falling Short On Financing…
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Chuck Butler, is the author of The Daily Pfennig, which is republished at The Daily Reckoning. His respected analysis is frequently quoted in or referenced by: the Wall Street Journal, U.S. News and World Report, CBS Market Watch, USA Today, CNNfn, the Chicago Tribune and many other publications.
Yep…things are going to get much worse before they get better.