Sydney, Feb 15, 2011 (ABN Newswire) - While president Obama's speech on reducing the deficit is an impressive suggestion, it will never actually happen. The US has a long history of strong talk on deficit reduction, but very poor form on real implementation. The US budget deficit this year is expected to be 10.9% of GDP, far worse than the largest economy in the Euro-zone, Germany, where the budget deficit is expected to be 3.7%. While the US may complain about the budget deficits of a few small economies in Europe, it has neglected its own far worse situation. Fed New York President William Dudley further exasperated the outlook for the US dollar with a speech claiming virtually full credit for the current recovery was due to QE2.
Growth is the result of a strong global economy, and increased US consumer activity, and is co-incidental to QE2. The on-going obsession for further bond purchases confirms further weakness for the dollar. Meanwhile China's exports were up 37.7% in January, and despite a small contraction in Q4 in Japan, the economy experienced overall good growth for the year 2010, and is expected to expand again this quarter. The ascendency of Asia continues apace.
View the videocast here: http://www.abnnewswire.net/multimedia/en/65228/Clifford-Bennett