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Tuesday, September 14, 2004 |
EPI: "The Bureau of Economic Analysis announced today that the current account (the broadest measure of the U.S. deficit in trade of goods, services, and payments to the rest of the world) reached an all-time quarterly high of $166.2 billion in the second quarter of 2004, an increase of 13% over the previous quarter. This trade deficit was 5.7% of U.S. gross domestic product (GDP). A major factor contributing to the rising trade deficit is the effort by foreign governments (especially those in Asia) to boost the value of the U.S. dollar by purchasing large amounts of U.S. assets such as treasury bills and other government securities. Foreign governments now provide the majority of the financing required to support the U.S. trade deficit.
Asian governments made 80.7% of all government purchases of U.S. assets in the first half of 2004. Asian governments, especially Japan and China, are willing to absorb the risks of financial losses from an ultimate decline in the dollar in order to support their exports competing with U.S. production, in the United States and around the world. If these governments had not been intervening in foreign exchange markets, then the dollar would have fallen much more than it has since 2002. In fact, the real value of the dollar increased 2.8% in the first half of 2004. This would not have occurred without the intervention of foreign governments in currency markets.
If U.S. and foreign governments would arrange for a substantial, orderly decline in the value of the dollar, then financial markets could be stabilized and the U.S. trade deficit would begin to decline."
Things to keep in mind: to reduce the trade deficit the dollar will have to fall, and much depends on the cooperation of foreign, mainly Asian, countries.
10:12:47 PM 
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The Australian: "Racial discrimination is a deep-rooted problem in the US, with almost 32 million Americans targeted by the authorities because of their race or religion, Amnesty International said yesterday.
Police, immigration and airport security procedures were identified as the main areas where the problem had become worse since the September 11 attacks on the US."
9:23:33 PM
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IrelandOnline: "Turkish Foreign Minister Abdullah Gul said yesterday that he told US officials that Turkey would no longer cooperate with the US over Iraq if ethnic Turks continued to be harmed in US military operations against suspected insurgents in northern Iraq."
10:49:20 AM
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