Organic Investments

 

Beware of The Twins!

A twin deficit arises when a country maintains both a budget deficit and a trade deficit. This article will touch on each component of the twin deficit and will conclude by highlighting the relationship between the two. After all, the reason it is referred to as the twin deficit is because the two are related. Today in the U.S. the level of the twin deficits are an additional tailwind for interest rates that investors should not ignore. The Budget Deficit Just as many of us maintain our own personal budget (tracking our income and expenses) so does the U.S. government. From the income the government receives by collecting taxes, it pays its expenses. When income exceeds expenses, a budget s

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