Wednesday, August 12, 2009

Trade Deficit with China Increases in June. Why is the media pimping this as a recovery?

With the recognition of a severe trade imbalance with China (before Japan and Saudi Arabia) as the cause of our economic woes, our media has done too much to pimp out our revived derivative market as a sign of "recovery" although we've lost 6 million jobs since the Subprime Collapse (and before due to a weakened economy preceeding it).

Like mentioned before, when money leaves the country permanently, it;
1. lowers the value of the US Dollar.
2. removes from circulation US dollars with substantial value that we don't have to borrow and pay interest on.

I'm wondering what the incentive for the media bias is? Are they hacking for our government to appease foreign investors? Or are they shilling as spin artists to get consumers to spend more?

Because spending more money overseas, especially at this point is hurting the economy when the media is reporting it as a sign of recovery.

June trade deficit rises, imports increase

WASHINGTON -- The U.S. trade deficit edged up slightly in June as imports rose for the first time in 11 months, another sign that the worst recession since World War II is beginning to loosen its grip on the economy.

The Commerce Department said Wednesday that the deficit rose 4 percent to $27 billion, from May's $26 billion. The May imbalance had been the lowest deficit in nearly a decade.

The bigger June deficit reflected an increase in imports for the first time in nearly a year, an indication that demand in the U.S. is starting to revive.

In a good sign for American producers, exports rose for the second straight month. That could be a signal global demand also is starting to rebound.

Imports of goods and services climbed 2.3 percent to $152.8 billion. A 23.8 percent jump in petroleum to $21.5 billion led the increase. That was the largest amount this year, reflecting higher volume and rising oil prices. Imports of other products also rose, led by autos, computers and civilian aircraft.

Exports rose 2 percent to $125.8 billion, good news for America's manufacturing sector, which has seen demand slump domestically and in key foreign markets as the recession that began in the U.S. in December 2007 spread worldwide.

Even with the increase in exports and imports, the overall deficit is running well below last year's levels. Through the first half of this year, the deficit is running at an annual rate of $345.9 billion, about half the $695.9 billion imbalance for all of 2008.

Economists believe the deficit will widen slightly in coming months but will still finish the year far below the 2008 level. They expect the imbalance to begin to rise again in 2010 as the U.S. and global economies start to mend....

WRONG!!! The economy is not going to recover in the U.S. folks. It's just not. Not until China starts to consume US exports, there's no possible way that this economy is going to recover. The subprime market is a sham and it's too unstable.

...Even with the increase in exports and imports, the overall deficit is running well below last year's levels. Through the first half of this year, the deficit is running at an annual rate of $345.9 billion, about half the $695.9 billion imbalance for all of 2008.

EACH year there is an annual rate of $600 billion leaving our country in circulation? Think about that. When this money is taken out of circulation, it's taken out of consumer's hands at least 10 times. Every US dollar that is not saved is spent on retail, then that same dollar is divided up into business expenses for retail, salaries and that same dollar, now split up trickles through the economy at a velocity completely dependant on spending power (for either citizens or businesses). If each one of those dollars is supposed to circulate through the economy 10 times each year (at least), then that would be a $6 trillion loss to the GDP. The Mercury Times reported that the dot com profits $200 billion annually (hopefully this is a NET profit). No way can the dot com sector compensate for the money out of circulation.


However there is a silver lining on the horizon.

US wins blockbuster WTO ruling that could offer American companies new business in China

GENEVA (AP) — The United States has won a wide-ranging ruling against Chinese trade practices that could provide massive market opportunities for American makers of everything from CDs and DVDs to music downloads and books.

The verdict released Wednesday at the World Trade Organization in Geneva finds definitively against China for forcing American media producers to route their business in China through Chinese state-owned companies.

The WTO victory comes as President Barack Obama is being pressed to be tough on trade rules with China, which many Democrats in the U.S. Congress blame for America's soaring trade deficits and lost manufacturing jobs. The case is sensitive also for the Chinese government, which asserts the right to keep out content it finds objectionable.

Unfortunately, we still have a long way to go. And the Obama Dream Team works solely for the Boomers who are going to gouge us so the upwardly mobile has no chance to protect ourselves from the rising prices courtesy of the "derivative" or credit default market that goes unsupervised. This is a bad replacement of good dollars.

1 comment:

  1. Old Russian saying...You can tell same lie 1000 time but not change truth!

    Difference between USSR Communist media and USA "mainstream media"

    In Russia government make media say what they want - even if lie.
    In USA "mainstream media" try make government what they want - even if lie..
    .....eventually they become same thing?!

    I Igor produce Obama Birth Certificate at