April 2009 US Government Receipts – Free Falling

May 12th, 2009 by andum | Posted in Economy, Stock Market, Wealth Preservation

Last October I pulled some retirement funds out of the market and moved them into a money market fund.  I couldn’t bear to watch the shrinking balance, especially when the economic news seemed so dire.  I decided I would rather preserve the reduced balance rather than take a chance that there was more pain to follow (there was).  Since then I decided to spend more time reading about the economy, both optimistic and pessimistic viewpoints.  My opinion, based on this reading, continues towards believing that there is more bad news looming for the economy – even in the presence of the ongoing stock market rally.  It is difficult to think differently based on the new release of the US Treasury Monthly Statement (see document here ).  Receipts for April 2009 – the month that typically results in the largest inflow of the year – was 34% less than April 2008 (see Table below).  Receipts for what should be the best income month of the year for the US government were less than government outlays (as has every month since September 2008).  This number suggests that the deficit estimates are probably optimistic (even after the upward revision this week), that the dollar will weaken and that the threat of inflation will start to play an even more prominent role in investor psyche. (credit to The Automatic Earth / Alea)

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