Tuesday, May 1, 2012

Is the Treasury's HUGE surplus this month presaging a market selloff?

The Treasury is currently running a surplus of $123 bln. (See Daily Treasury Statement.) That is the largest monthly surplus since March 2010, when the figure was $173 bln.
















The Dow was just above 11,000 back in April 2010. By June it was at 9614--a 14% decline.
There's no guarantee that it will happen again, however, we know from MMT that when the government runs a surplus the private sector runs a deficit (or sees its surplus reduced) by the same amount.