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b'Trade Deficit Moving Higher as Economy Slows Down
\\nYesterday we got the release of the October monthly Trade Deficit and we got a trade deficit of\\xa0$48.7 billion dollars.\\xa0 That was a little bit North of the $47.4 billion expected in the consensus forecast.\\xa0 In fact, the prior month, which was $43.5\\xa0billion was revised upwards to $44.9 billion. The larger number did cause the Atlanta Fed to shave down its estimates for Q4 GDP from 3.5% to 3.2%; my guess is that they will be revising it lower.\\xa0 Most of the numbers I have been seeing show the economy slowing down, at least measured by the GDP.
\\nCandidate Trump Promised Lower Trade Deficit While Calling Stock Market "A Bubble"
\\nWhat\'s significant about this trade deficit it is the largest trade deficit in 5 years, and it is the biggest trade deficit in the Trump Presidency.\\xa0 If you remember, candidate Trump made the trade deficit a big part of his campaign. He wanted to lower it.\\xa0 He said the trade deficit was too big, and the fact that it had been allowed to get so big; all these countries were taking advantage of us; and he was going to fix it! He was going to "Make America Great Again" in part, by getting rid of these trade deficits. So we were going to start operating at a profit again.\\xa0 He\'s not talking about trade deficits anymore.\\xa0 Does he want to accept responsibility for the increasing trade deficit, just as he claims credit for the rising stock market?
\\nTrump Now Takes Credit for the Stock Market but not the Trade Deficit
\\nWhen Trump was a candidate, he never promised, "Vote for me and I\'ll make the stock market go up!".\\xa0 He said the stock market was a bubble. Part of the problem was that the stock market was the only thing going up. The economy was actually getting worse, despite the fact that we had a stock market bubble.\\xa0 So a higher stock market was not part of his stump speech, yet that\'s all he talks about now is how high the stock market is.
\\nTrade Deficit is Not Shrinking
\\nWhat was part of his stump speech was shrinking the trade deficit.\\xa0 Well the trade deficit is not shrinking.\\xa0 It\'s growing! In fact, I believe that the trade deficit is going to end up hitting an all-time record high during the Trump Presidency.\\xa0 So that will be a complete failure. He campaigned on a lower deficit and we\'re going to get a much bigger deficit.
\\nDollar Down
\\nAnd of course, the trade deficit is growing even as the dollar is down.\\xa0 The dollar has fallen by about 8 or 9% this year.\\xa0 Now, most economists tell you that if the dollar goes down, that will be good for trade, right?\\xa0 It will be good for our exports, we will import less - none of that happened.\\xa0 What actually happens when the dollar goes down, it simply makes our imports more expensive. So our trade deficit goes up.\\xa0 It\'s not like we can just buy domestically produced goods instead of foreign-produced goods because we don\'t produce the goods.\\xa0 We have to import them and we just have to pay more to do it, and the trade deficit goes higher.
\\nBush All Over Again
\\nAnd since I believe the dollar is headed a lot lower during the Trump Presidency, the trade deficit is headed a lot higher. That\'s exactly what happened under Bush.\\xa0 The dollar hit an all-time record low under George W. Bush, and the trade deficit hit an all-time record high. And since I think the dollar is going to take out the lows it established under Bush, the trade deficit is going to take out the highs.
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