The US trade deficit in September was the widest it had been in 14 years.

Chris Rupkey, chief financial economist for MUFG reacted with this comment;

“America’s trade war with the world limited the trade deficit red ink for a time but it now looks like the terms of trade are changing back despite the tariffs and sanctions of the country will likely remain dependent on foreign goods for years to come, no matter who is president.”

In other words, president Trump’s vow to sharply cut the US trade deficit has not been achieved.

This now fits into the hole that the Covid-19 pandemic is digging for the world.

Description: ine chart of US current account balance as a % of GDP showing The US has run a large and persistent current account deficit

The Value Of The Dollar

As I have reported recently, this is not good news for the value of the U. S. dollar.

Tie this continued drop in the with the decline into negative territory in net savings in the U. S. in the second quarter and you end up with the fact that the rising government debt is going to have to rely more and more on foreign lenders to support the burgeoning Treasury deficits.

That is, the value of the dollar will be under substantial pressure.

The dollar has been dropping in value this year. It reached a near term peak in strength on March 19, as the U. S. Dollar Index (DXY) closed at 102.82.

This morning, October 7, 2020, the dollar index stood at 93.60. This is a 9.0 percent decline.

On March 19, it cost $1.0680 to purchase one Euro. On October 7, it took $1.1780 to buy a Euro. This represents a 9.3 percent decline in the value of the dollar.

My expectation is that the value of the dollar will continue to decline over for some time now. One reason is the weakness of