{"id":2556,"date":"2011-12-06T22:59:13","date_gmt":"2011-12-07T03:59:13","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=2556"},"modified":"2011-12-06T22:59:13","modified_gmt":"2011-12-07T03:59:13","slug":"frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/06\/frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011\/","title":{"rendered":"FRBSF Economic Letter: Asset Price Booms and Current Account Deficits"},"content":{"rendered":"<p>Just as the United States was not the only country posting a large current account deficit, so too it was not the only country that experienced asset price booms. Figure 2 shows that countries with large current account deficits in 2006 also tended to have larger house price increases. Of course, there are exceptions. For example, China has experienced rapid house price appreciation despite its enormous current account surplus. But, in general, house price appreciation and current account deficits appear to have been positively associated across many countries.<\/p>\n<p style=\"text-align:center;\"><a href=\"http:\/\/www.frbsf.org\/publications\/economics\/letter\/2011\/el2011-37.html\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/www.frbsf.org\/economic-research\/files\/el2011-37-2.png?w=525\" alt=\"FRBSF Economic Letter: Asset Price Booms and Current Account Deficits (2011-37, 12\/5\/2011)\" \/><\/a><\/p>\n<p>via <a href=\"http:\/\/www.frbsf.org\/publications\/economics\/letter\/2011\/el2011-37.html\">FRBSF Economic Letter: Asset Price Booms and Current Account Deficits (2011-37, 12\/5\/2011)<\/a>.<\/p>\n<p>Colin Twiggs: ~ There appears to be a general rule that large current account deficits lead to asset price booms. But to prove the rule researchers need to address why Japan experienced a massive asset price boom in the 1980s, and why China experienced a similar boom over the last decade, when both were running current account surpluses.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Just as the United States was not the only country posting a large current account deficit, so too it was not the only country that experienced asset price booms. Figure 2 shows that countries with large current account deficits in 2006 also tended to have larger house price increases. Of course, there are exceptions. For &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/06\/frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;FRBSF Economic Letter: Asset Price Booms and Current Account Deficits&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,33,34],"tags":[241,290,928,1547,1614,1901,1934,3194,3551],"class_list":["post-2556","post","type-post","status-publish","format-standard","hentry","category-economy","category-uk-europe-countries-regions","category-us-canada-countries-regions","tag-asset-price-boom","tag-australia","tag-current-account-deficit","tag-germany","tag-greece","tag-ireland","tag-japan","tag-spain","tag-us"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>FRBSF Economic Letter: Asset Price Booms and Current Account Deficits - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FRBSF Economic Letter: Asset Price Booms and Current Account Deficits - the patient investor\" \/>\n<meta property=\"og:description\" content=\"Just as the United States was not the only country posting a large current account deficit, so too it was not the only country that experienced asset price booms. Figure 2 shows that countries with large current account deficits in 2006 also tended to have larger house price increases. Of course, there are exceptions. For &hellip; Continue reading &quot;FRBSF Economic Letter: Asset Price Booms and Current Account Deficits&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/06\/frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011\/\" \/>\n<meta property=\"og:site_name\" content=\"the patient investor\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/profile.php?id=61572934660810\" \/>\n<meta property=\"article:published_time\" content=\"2011-12-07T03:59:13+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/www.frbsf.org\/economic-research\/files\/el2011-37-2.png\" \/>\n<meta name=\"author\" content=\"ColinTwiggs\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ColinTwiggs\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/06\/frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/06\/frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011\/\"},\"author\":{\"name\":\"ColinTwiggs\",\"@id\":\"https:\/\/thepatientinvestor.com\/#\/schema\/person\/cb072791ac83e8bae585007c133d54a5\"},\"headline\":\"FRBSF Economic Letter: Asset Price Booms and Current Account Deficits\",\"datePublished\":\"2011-12-07T03:59:13+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/06\/frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011\/\"},\"wordCount\":165,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/thepatientinvestor.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/06\/frbsf-economic-letter-asset-price-booms-and-current-account-deficits-2011-37-1252011\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/www.frbsf.org\/economic-research\/files\/el2011-37-2.png\",\"keywords\":[\"asset price boom\",\"Australia\",\"current account deficit\",\"Germany\",\"Greece\",\"Ireland\",\"Japan\",\"Spain\",\"US\"],\"articleSection\":[\"Economy\",\"UK &amp; 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Though economists, politicians and many of the public have opinions about the consequences of that huge imbalance, Charlie and I plead ignorance and firmly believe that near-term economic and\u2026","rel":"","context":"In &quot;Deficit Spending &amp; Employment&quot;","block_context":{"text":"Deficit Spending &amp; Employment","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/deficit-spending-employment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":20732,"url":"https:\/\/thepatientinvestor.com\/index.php\/2020\/06\/13\/nixons-default-and-the-future-for-gold\/","url_meta":{"origin":2556,"position":2},"title":"Nixon&#8217;s legacy and the future for Gold","author":"Colin Twiggs","date":"June 13, 2020","format":false,"excerpt":"The graph below, posted by Luke Gromen, highlights the long-term impact of the Nixon Default, when President Nixon on August 15, 1971 unilaterally suspended convertibility of the US Dollar to Gold. This spelled the demise of the Bretton Woods system of managed exchange rates and led to widespread adoption of\u2026","rel":"","context":"In &quot;Debt Levels&quot;","block_context":{"text":"Debt Levels","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/debt-levels\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16122,"url":"https:\/\/thepatientinvestor.com\/index.php\/2018\/02\/23\/why-is-the-dollar-falling\/","url_meta":{"origin":2556,"position":3},"title":"Why is the Dollar falling?","author":"Colin Twiggs","date":"February 23, 2018","format":false,"excerpt":"The broad, trade-weighted US Dollar index has been declining since early 2017. This is the best explanation I have found for current US Dollar weakness. From Bank of Montreal, BMO Nesbitt Burns: The relationship isn\u2019t perfect, but as a general rule of thumb, the USD declines in years when global\u2026","rel":"","context":"In &quot;Commodities&quot;","block_context":{"text":"Commodities","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/gold-commodities\/commodities-gold-commodities\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":24841,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/03\/27\/decline-of-the-us-dollar\/","url_meta":{"origin":2556,"position":4},"title":"Decline of the US Dollar","author":"Colin Twiggs","date":"March 27, 2021","format":false,"excerpt":"In 1971 Richard Nixon took the US Dollar off the gold standard, creating the first reserve currency based on fiat. He had no choice. After LBJ's big-spending guns and butter program of the '60s, the US did not have enough gold reserves to cover its foreign debt. So the US\u2026","rel":"","context":"In &quot;Debt Levels&quot;","block_context":{"text":"Debt Levels","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/debt-levels\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":32756,"url":"https:\/\/thepatientinvestor.com\/index.php\/2022\/05\/14\/current-turmoil-and-its-impact-on-gold\/","url_meta":{"origin":2556,"position":5},"title":"Current turmoil and its impact on Gold","author":"Colin Twiggs","date":"May 14, 2022","format":false,"excerpt":"Michael Every from Rabobank is bearish on Gold in his recent video: \"I can't see the case for Gold while the Fed is hiking -- you don't get a correlation with the Fed hiking aggressively and Gold going up.....If you want to buy into the Gold argument you are buying\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"Bank Credit & Fed Funds Rate","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-05-11-bankcredit-ffr.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-05-11-bankcredit-ffr.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-05-11-bankcredit-ffr.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-05-11-bankcredit-ffr.png?resize=700%2C400&ssl=1 2x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/2556","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=2556"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/2556\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=2556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=2556"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=2556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}