Do you think the Fed’s decision to move ahead with QE2, despite the strengthening economy rhetoric, was coincidence with the rollover in "the Formula" and "Leading Formula" in November? Don’t think so. When the formula rolls over, it begins to feed on itself as described by Jim.

Identification of the real secular trends shows the path to profit in this business.

"The Formula" US Fiscal Balance vs US Dollar: Federal Government Budget As A % of GDP, 12 Month Moving Average:
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"Leading Formula" Federal Taxes Withheld (TW) Less Total Government Outlays (TO) As A % of GDP, 12 Month Moving Average:
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November federal budget deficit highest on record

Treasury says deficit hit $150.4 billion last month, largest November imbalance on record

Associated Press

Martin Crutsinger, AP Economics Writer, On Friday December 10, 2010, 3:56 pm

WASHINGTON (AP) — The federal budget deficit rose to $150.4 billion last month, the largest November gap on record. And the government’s deficits are set to climb higher if Congress passes a tax-cut plan that’s estimated to cost $855 billion over two years.

The Treasury Department says November’s budget gap was 25 percent more than the deficit in November 2009.

For the first two months of the current budget year, which began Oct. 1, the deficit totals $290.8 billion. That’s 2 percent less than for the same period a year ago. And economists had been estimating that the full-year deficit would decline after two years of record highs.

But analysts say the tax deal President Barack Obama reached with Republicans this week will give the 2011 budget year the largest deficit in history — $1.5 trillion, according to economists at JPMorgan Chase. It would mark the third straight year of trillion-dollar-plus deficits.

More… ^[3]