Wednesday, June 08, 2011

Independent nonsense: balance of payments

Am I missing something or is this article contradicting itself in the space of a single paragraph?

Our export-led growth has given us a positive balance of payments position on current account. Depressed consumer demand has helped keep our spending down on imports. So we don't owe as much as we might. The real problem impeding a fuller economic recovery is that consumer confidence and domestic demand have not bounced back. The positive balance of payments will be short-lived if domestic demand does not improve.

So on the one hand depressed consumer demand has kept our imports low and so our balance of payments is positive. Yet somehow, our balance of payments will become negative unless consumer demand increases.

While I agree with some of what he says, the whole article has the feel of a random collection of assertions and opinions about the crisis cogged from others.

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