Large Current Account deficits are rarely a positive symptom. They reflect often an underlying economic situation that can be unsustainable. The US has a large Current Account deficit. What are the possible drivers for such a large deficit?

This article focuses on the economic symptoms or situations that could lead to a large Current Account deficit.

Central Banks have few options to manage the currency in case of a Current Account deficit. Such a deficit is financed by a Capital Account Surplus. This can be done via higher incoming investments or lower foreign currency reserves. In case of Current Account surplus, the Central Bank will have the option to keep its currency artificial low in the eyes of the rest of the world. How does that work?

This article focuses on the impact of a deficit or surplus of the Current Account on the Capital Account and the domestic currency.

When I started with my search for what later would become the Stock Trend Investing system, what was I actually looking for? It was not financial freedom or a way to better the world. The thing I wanted was just to find a way to make money and to avoid losing money on the stock market.

I saw that all stocks moved up and down in tandem. I realized that it will be very difficult to do stock picking. There are so many other people doing that. And all that effort is already incorporated in the market price.

The market inefficiencies are not so much in individual stocks. Looking at market movements, I could see that these inefficiencies occur much more often in all stocks together when stock bubbles inflate or deflate.

Do you understand how Public Deficits, Foreign Debts, trends in Currency Exchange Rates and Current Account Deficits impact the investment opportunities in the different markets around the world? To do so, a sound understanding is required of each of these economic concepts and how they interact with each other.

This article is a first in a series of five that explains the economic concepts of Current Account, Capital Account and Reserve Account and how they relate with foreign debts and public deficits. If you are interested to get an understanding of how the economy works, how money flows between nations and its impact on currency trends and the economic well-being of nations, please read on.