Federal Reserve flow of funds table F107 (Rest of the World) for Q2 2006 shows that the flow of US income from other countries increased by 202% compared to flows in the year 2001. The increase in inflows in the few years since 2001 amounted to US$331.6 billion. Does this mean that all is rosy […]

Consistent with a leveling of the rate of increase in the US trade deficit in 2006, the price of investment grade corporate bonds has been holding steady, as the graph indicates. Driven by a trade deficit that has been increasing since the early 1980s, the persistent flow of funds into the US bond market has caused […]

As the graph below shows, there has been a boom in the sale of new, single-family homes in the US since the late 1990s. In recent weeks, common wisdom bandied about on financial talk shows is that this housing boom was somehow caused by Federal Reserve Chairman Greenspan’s reduction in short-term interest rates during the years […]