Trade Deficit at 2nd Highest Level Ever

http://apnews.myway.com/article/20050311/D88OT5C00.html ^ | 3-11-05 | AP News

[soccer_linux_mozilla]

WASHINGTON (AP) - The U.S. trade deficit climbed to $58.3 billion in January, the second-highest level in history, as Americans' appetite for foreign consumer products and automobiles hit record highs. The deficit with China was pushed higher by a surge in textile shipments, reflecting the end of global quotas.

The Commerce Department reported Friday that the January trade gap was 4.5 percent higher than December's $55.7 billion deficit and was just below the all-time high monthly deficit of $59.4 billion, recorded in November.

For all of last year, the U.S. trade gap surged by 24.3 percent to $617.1 billion, setting a record for the third straight year. Analysts believe that 2005 will also set a record, reflecting higher prices for imported oil and continued heavy demand by U.S. consumers for all things foreign.

[oceanview]

of course, if they floated it, we would see a 40% move the first week. all that foreign investment they are attracting, building new plant and equipment and bringing jobs into china - gets 40% more expensive for the western companies right away, and then it goes from there.

[sixmil]

You get your groceries from overseas?

[sixmil]

The dollars we send overseas are worth nothing, but your dollars are? That's a fascinating world you live in.

[sixmil]

Is there no such thing as balanced trade? It's either huge trade deficits or huge trade surpluses?

[atomic_dog]

No. Dollars are worth exactly what the Federal Reserve Board of Governors says they are. It has been that way since April 5, 1933. I use dollars same as the next person. I even keep a few stashed with my passport and guns, but I keep a lot more hard assets that cannot be produced as quickly as BEP can crank out Federal Reserve Units. I think when the time comes, whoever holds the fewest FRU's wins.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all their bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves."
Alan Greenspan 1966

"Congressman, as I said before, the problem you are alluding to is called the conversion of a commodity standard to fiat money. We have statutorily gone onto a fiat money standard. And as a consequence of that it is inevitable that the authority which is the producer of the money supply will have inordinate power."
Alan Greenspan 2004

[econoguy]

I mean Japan is an "economic basket case" because over the past 10 years its economy has posted a growth rate of about 1% per year, virtually indistinguishable from recession. U.S. growth over the same period has averaged 3.4%. And while there was some optimism early last year that Japan might finally be clawing its way out of its economic bog, the last few quarters have seen the return of negative growth. For all practical purposes, Japan is back in recession, a position to which it has become all too accustomed over the years. That is what I call an "economic basket case."

[Mase]

"We can't keep having this massive trade deficit every month."
===

In other news, the WSJ reported Friday that their survey of 56 private economists had bumped up their estimates of economic growth. "The consensus forecast calls for inflation-adjusted GDP, the broadest measure of of all goods and services produced in the economy, to grow at an annual rate of 4% in the first quarter and 3.8% in the second quarter. Those forecasts were up from 3.8% and 3.7% respectively, in the survey a month ago."

"Hints of a stronger economy were also showed up yesterday when the Commerce Department reported wholesale inventories increased by 1.1% in January to a seasonally adjusted $331.94 billion."

"The economy is growing and creating jobs again," said Wachovia Corp. economist Mark Vitner. "Businesses need more inventories to keep up with sales."

[junta]

As for Japan call it demographic retrenchment for the economy, and any problems we point out for Japan are due to its feckless government. If its gooberment was not such a useless bunch of hacks I would invest big time in any Japan fund.

[Mase]

How does participation in "free trade" create a problem?" Well let's see. The huge lose of American manufacturing jobs as displayed by this chart:
________________

From 1995-2002 US Manufacturing employment declined 11%
The rest of the world also experienced an 11% loss.
China had a 15% loss in industrial jobs.

As world manufacturing becomes more efficient, we become more productive thereby leading to the world wide job losses.

Fortunately, our economy produced 20 million new jobs in the 1990's.

http://www.heritage.org/Research/TradeandForeignAid/wm467.cfm

[Mase]

We worked hard to reduce the trade deficit during the 1970s and our trade deficit ballooned during the 1980s, don't you remember the stark contrast in how we were doing economically during those periods?
______________

In 1985 the budget and trade deficits, as a % of GDP, were extreme. Yet, the dollar hit an all time high against most major currencies. The supply sider's have always said that a weak dollar is a monetary phenomenon that has little to do with budget or trade deficits. Maybe they're right.

[Jaysun]

In 1985 the budget and trade deficits, as a % of GDP, were extreme. Yet, the dollar hit an all time high against most major currencies. The supply sider's have always said that a weak dollar is a monetary phenomenon that has little to do with budget or trade deficits. Maybe they're right.

Mase,
I trade currencies on FOREX almost every night. I tend to agree that the dollar's value isn't tied to budget or trade deficits in a significant way.

[tomjohn77]

You dont get wealthier by refinancing. You just get closer to bankruptcy. There should be no need for refinancing if you are able to handle your money right.

[Jaysun]

You dont get wealthier by refinancing. You just get closer to bankruptcy. There should be no need for refinancing if you are able to handle your money right.

Yes you do. Refinancing is super idea when the goal is to reduce the interest rate. Also, it's not necessary to refinance the total value of your home, only the amount owed. I can't see why ANYONE wouldn't want to reduce their interest rate.

[tomjohn77]

I see your point in lowerig the interest rate, but refinancing and loaning money in your house is not a good idea . After a while you have refinanced so many times that you dont even own the forks in your house. Refinancing should not be done to many times. Many stupid people refinance many times and use credit cards to the limits because they dont know how to use their money. Usually poor people use this to many times to get money for a car they want or holidays etc.

[Jaysun]

I see your point in lowerig the interest rate, but refinancing and loaning money in your house is not a good idea . After a while you have refinanced so many times that you dont even own the forks in your house. Refinancing should not be done to many times. Many stupid people refinance many times and use credit cards to the limits because they dont know how to use their money. Usually poor people use this to many times to get money for a car they want or holidays etc.

I agree. It's insane to refinance and take the equity out of your home. There's only one way to grow wealth - spend less than you earn.