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If It’s Raining in Brazil, Buy Starbucks by Navarro

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CHAPTER 18THE TRADE DEFICIT TRAP

If there is any one economic report that always bedevils Richard Hume, it is the monthly report on international trade. Over the years, Richard has seen the dollar rise sharply on news of an unexpected increase in the trade deficit, but he has also seen the dollar fall equally hard on quite similar news. At the same time, Richard never knows how the stock and bond markets will react. What he does know is that stock and bond prices often rise when the trade deficit falls; but that is something he can never really count on, because sometimes just the opposite occurs. That’s why Richard Hume is so very leery of the trade numbers and will often go flat and into cash the day before the numbers are to be released. But ...

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