The current account deficit figure for 2004:III gets released tomorrow. The consensus forecast is that the US was in the hole by $170.6bn. This is a little smaller than my own deficit guesstimate of -$173.7bn.
Where the rubber meets the road is in the CA balance as a percentage of GDP. My figure is -5.88% whereas the consensus forecast is -5.78%. Even the economists' consensus puts 2004:III as larger than 2004:II.
The Experts must be predicting a positive income flow figure. More US investments abroad plus higher euro and yen plus repatriated profits equals keeping your head above the water of a net investment position near -30% of GDP?
Treasury Secretary John Snow says not to worry.
``We have the deepest and most liquid capital markets in the world and we're going to keep them that way,'' U.S. Treasury Secretary John Snow said in an interview with Bloomberg News. ``We will be able to attract the capital we need.''Frighteningly enough, Snow is right -- at least so far. In 2004:III the US attracted a net flow of $182.8bn (NSA). Thus in the third quarter the country could actually have "afforded" a CA balance of around -6.1% of GDP.
Hell, we've got spending room to spare! Bring on the imports!