RIDGEFIELD, Conn., Aug. 12, 2015 /PRNewswire/ -- Stephen Hicks, Founder and CEO of Southridge Capital, a diversified financial holding company specializing in direct investment and advisory services to small and middle market companies, has released a statement outlining his views on the current trade deficit and China's devaluation.
Hicks says, "It is very important to understand the underlying details behind statistics as opposed to just the statistic itself. One good example is the trade deficit which measures the difference between goods made overseas that Americans buy here versus goods made here sold abroad."
On the most recent monthly deficit being slightly higher than expected, Hicks states, "Many times, this is considered a sign of economic strength as Americans have greater disposable income, and combined with a very strong dollar, can purchase foreign goods more easily. However, the data shows that the deficit was not due to greater imports but fewer exports. The world is interconnected and a lack of growth in foreign economies can have very serious impact upon export dependent businesses which will flow through the entire United States."
After China devalued its currency this morning, more bad news may be on the way. "It has long been thought that China was a currency manipulator by intervening in markets to keep its currency artificially cheap to strengthen their exports. If now, they are transparently doing so, then perhaps the Chinese economy is weaker than anticipated. If so, a lack of growth in Asia plus the known difficulties in Europe may have severe consequences for the United States, irrespective of our own domestic policies or strengths."
About Southridge Capital: Southridge Capital is a diversified financial holding company specializing in direct investment and advisory services to small and middle market companies. Since 1996 the structured finance team has made direct investment of over $1.8 billion into growth companies globally. Our expertise lies in our ability to customize a financing plan for the prospective client and then execute on that plan without fail. For more information, visit: www.southridge.com
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SOURCE Southridge Capital