Realities hold sway over attitudes in the marketplace
Macroeconomics
Nothing too exciting really happened in the general financial and business world during the period under review (June 14-28). It was mainly a case of a continuation of existing trends.
The USA trade deficit widened again to a whopping 5.1 % of the GNP. Although interpretations of the figures are different, the general consensus is that we might get used to the numbers increasing on a monthly basis. If this happens though, it’s unlikely the rest of the world will like it. Neither a dramatic fall in consumer spending (imports), nor in the value of the USD, will please the global economy. The sequence of rising interest rates and inflation, followed shortly by a recession also needs to be recognised. It has been agreed that we are yet to find any indication of what is going to happen in the short term but there is a strong likelihood that the Gordian knot will be untied one day.
