U.S. Current Account Gap Widens to Record $195.1 Bln in 1st Qtr

[swag]

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aQ0pVrYAPShI&refer=home

June 17 (Bloomberg) -- The current account deficit grew more than expected to a record $195.1 billion from January through March, increasing the U.S. dependence on borrowing from abroad to feed Americans' appetite for imports.

Higher-priced oil and demand for consumer goods from abroad helped widen the first-quarter gap from $188.4 billion in the final three months of 2004, the Commerce Department said today in Washington. The current account is the broadest measure of trade, encompassing financial transfers along with goods and services. The median forecast called for a deficit of $190 billion.

The deficit poses a risk to the economy, because foreign investors who are financing the gap may eventually reduce their dollar-based holdings, say economists including Federal Reserve Governor Donald Kohn. Interest rates may then go up to attract investment, raising the cost of consumer borrowing.

``It's not a crisis, but it does at least raise a flag that there's a serious imbalance,'' said Doug Porter, senior economist at BMO Nesbitt Burns in Toronto, before the report. ``The U.S. has to borrow about $2 billion a day from the rest of the world, and there is no doubt it's unsustainable.''

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[indepat]

1. On track to soon top $1 trillion annually. Four more years, four more

years.

[Supersedeas]

6. More tax cuts for the RICH...More tax cuts for the Rich...More tax cuts

for the RICH during the War Time trifecta.

[idlisambar]

7. For this year it will be ~$800 billion

In 2007 it will probably get over a trillion. These numbers are unreal.

[indepat]

8. And what is unreal cannot and will not continue indefinitely: a day of

reckoning for the fiscal follies of Repukes since 1981 is as sure as God made little green apples in the summertime. Four more years, four more years.

[truthisfreedom]

2. bushco plans to default. that's been the plan all along... borrow and

never pay back.

[wurzel]

3. This will balance when our standard of living equals the Chinese.

And with a $5.15/hour minimum wage that is not far off. So what are you worried about?

[cthrumatrix]

4. my question is "what is going to make this better"... oil prices and our

ability to manf and export make it hard to change this trend

[RUMMYisFROSTED]

5. Econothink:

Treasury Secretary John Snow says the deficit highlights the strength of the U.S. economy, ...