I would truly appreciate if someone answered few of my questions:
1. How does "seasonal adjustment" works on trade balance data provided by the
US Census Bureau and Bureau of Economic Analysis? Which data should we consider as usefull - adjusted or not adjusted? Why is this being adjusted? What for?
Reasons for the question:
The 2006 annual data from here:
http://www.census.gov/foreign-trade/statistics/historical/go....
shows -838,271 BOP Basis
-817,304 Census Basis
Why the difference and what that means? I understand Balance of Payment method but what the "Census" means? How is it collected?
now - annual data from here:
http://www.census.gov/foreign-trade/statistics/historical/ga....
shows Annual -758,522 Seasonally Adjusted
Again - Why the difference and what that means?
If we subtract the two of the numbers (758 and 838) we get a large difference annually (79,749 billions USD). In my opinion it is fundamentally important to understand why these numbers are adjusted. Unfortunatelly I can't find apropriate explanations anywhere. Please explain.
2. Second question is related to the first. If we list the current account deficit starting from the very important past date of March 2006 we get the following numbers:
2006:
March -68,293
April -68,598
May -72,035
June -70,643
July -73,733
August -74,272
September -70,894
October -65,492
November -66,256
December -68,590
2007:
January -64,624
February -65,500
March -70,742
April (R) -67,345
May -68,999
Total of the above is: 1,036,016 = 1 Trillion dollars!
I used the above data from here:
http://www.census.gov/foreign-trade/Press-Release/current_pr....
Now if we look at the TICS report from here:
http://www.ustreas.gov/tic/ticpress.shtml
(I used the archive file - http://www.ustreas.gov/tic/npr_history.csv)
You will see the following numbers for the same period March 2006 - May 2007:
2007-May 105909
2007-Apr 97763
2007-Mar 32250
2007-Feb 95537
2007-Jan 80540
2006-Dec 15
2006-Nov 87870
2006-Oct 78050
2006-Sep 70984
2006-Aug 104359
2006-Jul 72959
2006-Jun -2640
2006-May 105087
2006-Apr 101565
2006-Mar 95926
Totaling 1,126,174 = 1.126 trillion
Therefore we must assume that based on official statistics we have NET inflow of 1,126,174 millions and outflow of 1,036,016 millions USD for the same period.
Now questions:
Why do we see the difference in the amount of 126 billions of US dollars?
Where is this money coming from?
Last time the FED published the amount of dollars OUTSIDE the US (so called eurodollars) here:
http://www.federalreserve.gov/releases/h6/20060316/
there were 425.5 billions of dollars outside of the Domestic Banking system.
Look at H.6 (508); Table 6; SEASONALLY ADJUSTED COMPONENTS OF NON-M2 M3; last line Eurodollars(4).
Now if we have a discrepancy of 126 billion over the total of 425.5 billion - it is logical to assume that the change of that would definitely change the value of USDX causing it to increase in value over the period of time.
BUT WE DO NOT OBSERVE THAT. Period.
What is more important - should the foreign eurodollar deposits decrease - the LIBOR rate would increase, right?
BUT WE DO NOT OBSERVE ANY SIGNIFICANT FLUCTUATIONS IN LIBOR RATE FOR USD!
http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=141&a=627
THEREFORE IT IS LOGICAL TO ASSUME (with high probability) THE EURODOLLAR DEPOSITS DID NOT CHANGE SIGNIFICANTLY - even though we can't say for sure because FED stopped reporting these in March 2006.
Bottom line - WHERE DOES THAT MONEY COME FROM AND WHERE IS IT OFFICIALLY REPORTED?
1. How does "seasonal adjustment" works on trade balance data provided by the
US Census Bureau and Bureau of Economic Analysis? Which data should we consider as usefull - adjusted or not adjusted? Why is this being adjusted? What for?
Reasons for the question:
The 2006 annual data from here:
http://www.census.gov/foreign-trade/statistics/historical/go....
shows -838,271 BOP Basis
-817,304 Census Basis
Why the difference and what that means? I understand Balance of Payment method but what the "Census" means? How is it collected?
now - annual data from here:
http://www.census.gov/foreign-trade/statistics/historical/ga....
shows Annual -758,522 Seasonally Adjusted
Again - Why the difference and what that means?
If we subtract the two of the numbers (758 and 838) we get a large difference annually (79,749 billions USD). In my opinion it is fundamentally important to understand why these numbers are adjusted. Unfortunatelly I can't find apropriate explanations anywhere. Please explain.
2. Second question is related to the first. If we list the current account deficit starting from the very important past date of March 2006 we get the following numbers:
2006:
March -68,293
April -68,598
May -72,035
June -70,643
July -73,733
August -74,272
September -70,894
October -65,492
November -66,256
December -68,590
2007:
January -64,624
February -65,500
March -70,742
April (R) -67,345
May -68,999
Total of the above is: 1,036,016 = 1 Trillion dollars!
I used the above data from here:
http://www.census.gov/foreign-trade/Press-Release/current_pr....
Now if we look at the TICS report from here:
http://www.ustreas.gov/tic/ticpress.shtml
(I used the archive file - http://www.ustreas.gov/tic/npr_history.csv)
You will see the following numbers for the same period March 2006 - May 2007:
2007-May 105909
2007-Apr 97763
2007-Mar 32250
2007-Feb 95537
2007-Jan 80540
2006-Dec 15
2006-Nov 87870
2006-Oct 78050
2006-Sep 70984
2006-Aug 104359
2006-Jul 72959
2006-Jun -2640
2006-May 105087
2006-Apr 101565
2006-Mar 95926
Totaling 1,126,174 = 1.126 trillion
Therefore we must assume that based on official statistics we have NET inflow of 1,126,174 millions and outflow of 1,036,016 millions USD for the same period.
Now questions:
Why do we see the difference in the amount of 126 billions of US dollars?
Where is this money coming from?
Last time the FED published the amount of dollars OUTSIDE the US (so called eurodollars) here:
http://www.federalreserve.gov/releases/h6/20060316/
there were 425.5 billions of dollars outside of the Domestic Banking system.
Look at H.6 (508); Table 6; SEASONALLY ADJUSTED COMPONENTS OF NON-M2 M3; last line Eurodollars(4).
Now if we have a discrepancy of 126 billion over the total of 425.5 billion - it is logical to assume that the change of that would definitely change the value of USDX causing it to increase in value over the period of time.
BUT WE DO NOT OBSERVE THAT. Period.
What is more important - should the foreign eurodollar deposits decrease - the LIBOR rate would increase, right?
BUT WE DO NOT OBSERVE ANY SIGNIFICANT FLUCTUATIONS IN LIBOR RATE FOR USD!
http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=141&a=627
THEREFORE IT IS LOGICAL TO ASSUME (with high probability) THE EURODOLLAR DEPOSITS DID NOT CHANGE SIGNIFICANTLY - even though we can't say for sure because FED stopped reporting these in March 2006.
Bottom line - WHERE DOES THAT MONEY COME FROM AND WHERE IS IT OFFICIALLY REPORTED?