According to the latest report published by the US Department of the Treasury, the US budget deficit declined down to $1089bn in the 2011-2012 financial year, which ended on September 30th 2012. Therefore, the budget deficit declined by 16% during the reporting period as compared to the previous financial year when the budget deficit was equal to $1299bn.
September 2012 ended with a $75bn surplus while September 2011 showed a $63bn deficit. Analysts had anticipated a balanced budget.
At the same time, experts say that the annual US budget imbalance with a deficit over $1000bn will lead to an increase in the US public debt up to $16 170bn.
Some experts, including John Williams, a famous American economist, say that the US authorities changed the way they calculate the stats in 1990. Therefore, the real inflation is much higher than the one that has been given in official reports since then. Therefore, the current 2% growth in the official US GDP report is false. The situation looks even gloomier if to take a look at US credit multipliers. Some of them have already dropped below 1. This means that any new currency unit emitted by the FED and injected into the market looses 30% of its value. The return used to be positive (around 300-400%).
Forex.
The chart below, courtesy of , reflects the current state of affairs in the market of the US Dollar index. The index finished last week in the 79,17-80,32 price range.
A break below 79,57 and 79,17 will resume the downtrend while a break above 80,32 will resume the mid-term rally.
