Keynes and Trade deficit

I've been bringing up the trade deficit as the main cause of the bad economy. It has taken money(preinterest/preinflation money) out of the supply and out of circulation .

Keynes said much about interest rates, but nothing on taxes during a time of deficits- or a "shortage of money"; which can't be adequately replaced by credit.

http://www.scribd.com/doc/5858/Keynes-John-Maynard-General-Theory-of-Employment-1936?autodown=pdf

See Pg. 196-217.

Underneath the Old School English lies Keynes' stratgies, one involving a combined currency to fix the problem-which didn't fly over well with today's economists.

I'm bringing this up because too many Keynesian hypsters (who never read his writings) parrot the phrase too conveniently erroneously as if the Laffer strategy was the entire scope of Keynesian economics.

I like Keynes, I like his style. I have a problem with the way his methods are taught in univerities.

They teach Keynesians as an absolute way of thinking, not as the strategy that it is. The University professors teach only small parts of Keynesian as a major topic without mentioning that Keynes is an entire complex set of strategies built generally around Adam Smith's Model of the Invisible Hand.

This is the way I was taught, and it's probably cause for the masses in the business world to not question the media and their politicians on why a strategy is being used to "stimulate the economy".

Like mentioned before, Keynes himself gravely addressed the issue of trade deficit. Never did he say "tax the people" during this time of wealth depletion from the middle class as Bartlett may lead you to believe. CNN is not a trustworthy site for journalism unless you can calm your stomach during intense vertigo. The context contains way too much spin it's pointless for the articles to exist in the first place.

Keynes never said "create inflation and an unsecured credit market as the new currency- and ignore the trade deficit". The Obama Dream Team should take notes.

If for anything, not to treat us out here as if we were born yesterday. Americans are not "dumb". We're terribly misinformed.

Stick with fundamental education before you read the news. And never be intimidated or afraid to question your sources. FUD=fear uncertainty and doubt is a too common tactic to cause oppostion/competition to question the legitimacy of their statements.
It's only a tactic, the average person may prove to be smarter than they're made to feel about themselves.

POP! Goes the Greenback-Intentional? BRIC and Soros may know.

The dollar has been on the decline since Clinton left office with a trade deficit; mostly due to our trade with China. The value of the US Dollar somehow became valued lower than the Canadian dollar in 2007, right before the subprime collapse.

So Obama came into office and Zollick, the World Bank President is questioning whether or not to keep it as a reserve currency.

So we are in a dangerous position here. We are in a weakened position; China can easily impose financial warfare against us if they wish at this point. Shall we look at how they're dealing with questionable oil trades?

Just this September, China has threatened a derivative default.

BEIJING, Sept 29 (Reuters) - A group of Chinese state firms, with the backing from the state assets watchdog, have launched a contract war against their foreign banks, threatening not to pay out loss-making derivatives deals they claim were unfair.
Arguing that they were mis-sold risky and unnecessary oil options, China State-owned Assets Supervision and Administration (SASAC) this month took the unprecedented step of warning banks that state corporations could default or sue, appearing to give Beijing's seal of approval to tearing up derivative deals worth an estimated several billion dollars to the banks.

But as I mentioned before, China buys US Treasuries to keep the US Dollar propped above the Yuan in order to keep the their exports cheap. Ron Kirk has been fabulous in addressing the WTO diplomatically about China's trade war against the U.S. Although they grossly understate the trade surplus given to them by the U.S.

Defaulting on our debt to China isn't going to be pretty.

So how does Obama "fix the problem?" By spending more and...

"President Barack Obama has increased U.S. marketable debt to a record as he borrows to reignite growth in the world’s biggest economy. That’s boosted speculation increased money supply will debase the currency and spur inflation."

So what is "record"?

On October 8th, 2009,

"President Barack Obama increased the nation’s marketable debt to an unprecedented $7.1 trillion as the government borrows to revive growth. Goldman Sachs Group Inc. predicts the U.S. will sell about $2.9 trillion of debt in the two years ending next September."

Don't worry. Asia stepped in to save the day, or China's hide.

"Asian central banks jumped in to prop up the dollar on Thursday as it slumped to a 14-month low against leading currencies."

Now Bernanke begins his case for the US Dollar, claiming that a world reserve currency will weaken the US Dollar.

Now wait a second!!!

On June 3rd, 2009,

"Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. dollar did not face a near-term risk of losing its reserve currency status and that ensuring a strong U.S. economy was the best way to keep the dollar strong."

Asia has officially done more than Bernanke and the Obama Administration combined to keep the US Dollar afloat.

So what are the other problems with a weakened dollar? Inflation? What about increased oil prices? OPEC will push for a world reserve currency that they can price oil in, or they can price oil in Euros or even Yen if they please.

But then again, Obama's keeping the oil production to foreign sources, not local ones. Ask Brazil.


Now remember, Soros bought Obama's presidency. He profitted from the crash of the British Pound and the Thai currency-the bhat.

He paid off 527's through the Democracy Alliance since 2004 and profitted from Halliburton only because he knew exactly when Media Matters would stop rallying against them. Mind you, this is a man who claims to hate Israel. He obviously creates political melodrama for his own financial gain. It seems like Soros is getting what he wants from the decline of our currency.

He has a friend named Jim Rogers who used to work with him at Quantum Funds. Jim Rogers endorsed Ron Paul during the 08 campaign. Ron Paul supporters have been shilling gold since the 08 campaigns, if not before.

One can say that BRIC intentionally pushed the US down. Soros has his filthy hands in Brazil and his Open Society Institute all over Russia and Eastern Europe.
But lest, one man couldn't do it all by himself.

A weaker dollar promotes exports, and the WTO hasn't been too great about enforcing trade war laws on China. Lets not forget to mention the illegal immigration and drug wars that send many billions of US Dollars out of circulation in our economy.

It's Papa's Feeding Time, but Pappa couldn't do with without the corruption in the previous two administrations and utter incompetancy and garbage that is our Congress.

We have to fix this. We have to vote out every crook in our government or have them forced out. This problem was created within.

$100 trillion projected federal deficit. Attention Gen X & Gen Y! THIS is YOUR FUTURE!

The estimated net worth of America is cited by World Factbook to be between $50-70 trillion dollars.

The estimated projected Booemr burden, cited by the Dallas Fed is $100 trillion. Now exactly why is Obama spending so much? Think about it. We're bankrupt. He is making the killing as short and as painless as possible.

Of course it's we, Gen X, Y and Millinia that will pick up the tab.

Storms on the HorizonRemarks before the Commonwealth Club of California
San Francisco, California
May 28, 2008
Thank you, Bruce [Ericson]. I am honored to be here this evening and am grateful for the invitation to speak to the Commonwealth Club of California.

Alan Greenspan and Paul Volcker, two of Ben Bernanke’s linear ancestors as chairmen of the Federal Reserve, have been in the news quite a bit lately. Yet, we rarely hear about William McChesney Martin, a magnificent public servant who was Fed chairman during five presidencies and to this day holds the record for the longest tenure: 19 years.....

...Today, our fellow citizens and financial markets are paying the price for falling victim to the complacency and recklessness Martin warned against. Few scanned the horizon for trouble brewing as we proceeded along a path of unparalleled prosperity fueled by an unsustainable housing bubble and unbridled credit markets....
...I am also not going to engage in a discussion of present monetary policy tonight, except to say that if inflationary developments and, more important, inflation expectations, continue to worsen, I would expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic economic scenario. Inflation is the most insidious enemy of capitalism. No central banker can countenance it, not least the men and women of the Federal Reserve.

Tonight, I want to talk about a different matter. In keeping with Bill Martin’s advice, I have been scanning the horizon for danger signals even as we continue working to recover from the recent turmoil. In the distance, I see a frightful storm brewing in the form of untethered government debt. ...Unless we take steps to deal with it, the long-term fiscal situation of the federal government will be unimaginably more devastating to our economic prosperity than the subprime debacle and the recent debauching of credit markets that we are now working so hard to correct.

You might wonder why a central banker would be concerned with fiscal matters. Fiscal policy is, after all, the responsibility of the Congress, not the Federal Reserve. Congress, and Congress alone, has the power to tax and spend. From this monetary policymaker’s point of view, though, deficits matter for what we do at the Fed. There are many reasons why. Economists have found that structural deficits raise long-run interest rates, complicating the Fed’s dual mandate to develop a monetary policy that promotes sustainable, noninflationary growth. The even more disturbing dark and dirty secret about deficits—especially when they careen out of control—is that they create political pressure on central bankers to adopt looser monetary policy down the road. I will return to that shortly. First, let me give you the unvarnished facts of our nation’s fiscal predicament.

...In keeping with the tradition of rosy scenarios, official budget projections suggest this deficit will be relatively short-lived. They almost always do. According to the official calculus, following a second $400-billion-plus deficit in 2009, the red ink should fall to $160 billion in 2010 and $95 billion in 2011, and then the budget swings to a $48 billion surplus in 2012.

If you do the math, however, you might be forgiven for sensing that these felicitous projections look a tad dodgy. To reach the projected 2012 surplus, outlays are assumed to rise at a 2.4 percent nominal annual rate over the next four years—less than half as fast as they rose the previous seven years. Revenue is assumed to rise at a 6.7 percent nominal annual rate over the next four years—almost double the rate of the past seven years. Using spending and revenue growth rates that have actually prevailed in recent years, the 2012 surplus quickly evaporates and becomes a deficit, potentially of several hundred billion dollars.

Doing deficit math is always a sobering exercise. It becomes an outright painful one when you apply your calculator to the long-run fiscal challenge posed by entitlement programs. Were I not a taciturn central banker, I would say the mathematics of the long-term outlook for entitlements, left unchanged, is nothing short of catastrophic...

...Now, fast forward 70 or so years and ask this question: What is the mathematical predicament of Social Security today? Answer: The amount of money the Social Security system would need today to cover all unfunded liabilities from now on—what fiscal economists call the “infinite horizon discounted value” of what has already been promised recipients but has no funding mechanism currently in place—is $13.6 trillion, an amount slightly less than the annual gross domestic product of the United States.

Demographics explain why this is so. Birthrates have fallen dramatically, reducing the worker–retiree ratio and leaving today’s workers pulling a bigger load than the system designers ever envisioned. Life spans have lengthened without a corresponding increase in the retirement age, leaving retirees in a position to receive benefits far longer than the system designers envisioned. Formulae for benefits and cost-of-living adjustments have also contributed to the growth in unfunded liabilities.

The good news is this Social Security shortfall might be manageable. While the issues regarding Social Security reform are complex, it is at least possible to imagine how Congress might find, within a $14 trillion economy, ways to wrestle with a $13 trillion unfunded liability. The bad news is that Social Security is the lesser of our entitlement worries. It is but the tip of the unfunded liability iceberg. The much bigger concern is Medicare, a program established in 1965, the same prosperous year that Bill Martin cautioned his Columbia University audience to be wary of complacency and storms on the horizon.

Medicare was a pay-as-you-go program from the very beginning, despite warnings from some congressional leaders—Wilbur Mills was the most credible of them before he succumbed to the pay-as-you-go wiles of Fanne Foxe, the Argentine Firecracker—who foresaw some of the long-term fiscal issues such a financing system could pose. Unfortunately, they were right.

Please sit tight while I walk you through the math of Medicare. As you may know, the program comes in three parts: Medicare Part A, which covers hospital stays; Medicare B, which covers doctor visits; and Medicare D, the drug benefit that went into effect just 29 months ago. The infinite-horizon present discounted value of the unfunded liability for Medicare A is $34.4 trillion. The unfunded liability of Medicare B is an additional $34 trillion. The shortfall for Medicare D adds another $17.2 trillion. The total? If you wanted to cover the unfunded liability of all three programs today, you would be stuck with an $85.6 trillion bill. That is more than six times as large as the bill for Social Security. It is more than six times the annual output of the entire U.S. economy.

Why is the Medicare figure so large? There is a mix of reasons, really. In part, it is due to the same birthrate and life-expectancy issues that affect Social Security. In part, it is due to ever-costlier advances in medical technology and the willingness of Medicare to pay for them. And in part, it is due to expanded benefits—the new drug benefit program’s unfunded liability is by itself one-third greater than all of Social Security’s.

Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent.

I want to remind you that I am only talking about the unfunded portions of Social Security and Medicare. It is what the current payment scheme of Social Security payroll taxes, Medicare payroll taxes, membership fees for Medicare B, copays, deductibles and all other revenue currently channeled to our entitlement system will not cover under current rules. These existing revenue streams must remain in place in perpetuity to handle the “funded” entitlement liabilities. Reduce or eliminate this income and the unfunded liability grows. Increase benefits and the liability grows as well.

Let’s say you and I and Bruce Ericson and every U.S. citizen who is alive today decided to fully address this unfunded liability through lump-sum payments from our own pocketbooks, so that all of us and all future generations could be secure in the knowledge that we and they would receive promised benefits in perpetuity. How much would we have to pay if we split the tab?

Again, the math is painful. With a total population of 304 million, from infants to the elderly, the per-person payment to the federal treasury would come to $330,000. This comes to $1.3 million per family of four—over 25 times the average household’s income....

...Suppose we decided to tackle the issue solely on the spending side. It turns out that total discretionary spending in the federal budget, if maintained at its current share of GDP in perpetuity, is 3 percent larger than the entitlement shortfall. So all we would have to do to fully fund our nation’s entitlement programs would be to cut discretionary spending by 97 percent. But hold on. That discretionary spending includes defense and national security, education, the environment and many other areas, not just those controversial earmarks that make the evening news. All of them would have to be cut—almost eliminated, really—to tackle this problem through discretionary spending.

I hope that gives you some idea of just how large the problem is. And just to drive an important point home, these spending cuts or tax increases would need to be made immediately and maintained in perpetuity to solve the entitlement deficit problem.

Discretionary spending would have to be reduced by 97 percent not only for our generation, but for our children and their children and every generation of children to come. And similarly on the taxation side, income tax revenue would have to rise 68 percent and remain that high forever.

Remember, though, I said tax revenue, not tax rates. Who knows how much individual and corporate tax rates would have to change to increase revenue by 68 percent?
....No combination of tax hikes and spending cuts, though, will change the total burden borne by current and future generations. For the existing unfunded liabilities to be covered in the end...

someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact.

The decision we must make is whether to shoulder a substantial portion of that burden today or compel future generations to bear its full weight.

Now that you are all thoroughly depressed, let me come back to monetary policy and the Fed.

It is only natural to cast about for a solution—any solution—to avoid the fiscal pain we know is necessary because we succumbed to complacency and put off dealing with this looming fiscal disaster. Throughout history, many nations, when confronted by sizable debts they were unable or unwilling to repay, have seized upon an apparently painless solution to this dilemma: monetization. Just have the monetary authority run cash off the printing presses until the debt is repaid, the story goes, then promise to be responsible from that point on and hope your sins will be forgiven by God and Milton Friedman and everyone else.

We know from centuries of evidence in countless economies, from ancient Rome to today’s Zimbabwe, that running the printing press to pay off today’s bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid.

Earlier I mentioned the Fed’s dual mandate to manage growth and inflation. In the long run, growth cannot be sustained if markets are undermined by inflation. Stable prices go hand in hand with achieving sustainable economic growth. I have said many, many times that inflation is a sinister beast that, if uncaged, devours savings, erodes consumers’ purchasing power, decimates returns on capital, undermines the reliability of financial accounting, distracts the attention of corporate management, undercuts employment growth and real wages, and debases the currency.

Purging rampant inflation and a debased currency requires administering a harsh medicine. We have been there, and we know the cure that was wrought by the FOMC under Paul Volcker. Even the perception that the Fed is pursuing a cheap-money strategy to accommodate fiscal burdens, should it take root, is a paramount risk to the long-term welfare of the U.S. economy. The Federal Reserve will never let this happen. It is not an option. Ever. Period.

The way we resolve these liabilities—and resolve them we must—will affect our own well-being as well as the prospects of future generations and the global economy. Failing to face up to our responsibility will produce the mother of all financial storms. The warning signals have been flashing for years, but we find it easier to ignore them than to take action. Will we take the painful fiscal steps necessary to prevent the storm by reducing and eventually eliminating our fiscal imbalances? That depends on you.

I mean “you” literally. This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them. You are the ones who let them get away with burdening your children and grandchildren rather than yourselves with the bill for your entitlement programs....

...Yet no one, Democrat or Republican, enjoys placing our children and grandchildren and their children and grandchildren in harm’s way. No one wants to see the frightful storm of unfunded long-term liabilities destroy our economy or threaten the independence and authority of our central bank or tear our currency asunder.

Of late, we have heard many complaints about the weakness of the dollar against the euro and other currencies. It was recently argued in the op-ed pages of the Financial Times [3] that one reason for the demise of the British pound was the need to liquidate England’s international reserves to pay off the costs of the Great Wars. In the end, the pound, it was essentially argued, was sunk by the kaiser’s army and Hitler’s bombs. Right now, we—you and I—are launching fiscal bombs against ourselves. You have it in your power as the electors of our fiscal authorities to prevent this destruction. Please do so.

Obama myth. Job Depression Does not entail an "economic recovery" This is common sense.

The amount of baloney pushed by our politicians and the media is infinate material for comedy. It would be funny if none of it was true.

The left has been the worst perpetrators.

We've heard that Cows are to blame for Global Warming. Haven't cows been farting since cows have been in existance? What about the Bison and the Buffalo?

Then Obama convinces us that Cap and Trade or "energy reform" is the solution to our trade deficit with Saudi Arabia, since that's the cause of our bad economy. I'm not putting words into his mouth, there's no way I can make this stuff up.

At a time of such great challenge for America, no single issue is as fundamental to our future as energy. America's dependence on oil is one of the most serious threats that our nation has faced....It puts the American people at the mercy of shifting gas prices, stifles innovation and sets back our ability to compete.

So drilling in Alaska wouldn't help?

Okay Obama's wording is a tad melodramatic. The other trouble is that Obama doesn't tie his statements with a bridge of logic or facts. Cap and Trade is a tax that's going to hamper profit margins for businesses and reduce consumer confidence with it's customers, just so government can profit. Both of these solutions are exactly what you should not do to stimulate the economy. Taxing us heavily is going to hurt the country's economy for everyone. This is the truth, I'm actually sugarcoating it.

What is the next line of baloney? Oh! The job depression economic recovery, otherwise known as the "jobless economic recovery".

This isn't possible since the US is a consumer based economy.

Consumer spending used to make up about 67% of all the economic activity in the U.S., but over the past few years, it's ratcheted up to around 72%.

This is a significant number. Much of it has to do with real estate and derivative trading but here, it's just like calling the sky "blue".

How many jobs did we lose since the subprime collapse?

According to MSNBC,

About 6.7 million jobs were lost during this downturn.

Before I get into it, we have to note that the US job creation compared to the population growth dropped from 78.45% (dot com boom) in the 90's to 19.57% between 2000-March 2009.

Let's not forget that we offshored, outsourced and sent money to places that would not keep the economy strong without the derivative market to begin with.

According to the BLS website:

Employment in professional and business services continued to trend
down in July (-38,000); the industry has shed 1.5 million jobs since
the start of the recession. Within professional and business services,
employment in the temporary help industry edged down in July. While
temporary help has lost 844,000 jobs since the recession began, the
declines have lessened substantially over the past 3 months.

Transportation and warehousing lost 22,000 jobs in July. Since May,
the average monthly job loss was half the average monthly decline for
November through April (-17,000 versus -34,000).

Financial activities employment continued to trend down in July
(-13,000). The average monthly decline for this industry was 23,000
over the past 3 months compared with 46,000 per month from November
through April. Since the start of the recession, the financial acti-
vities industry has lost 501,000 jobs. Employment in information de-
clined by 16,000 in July, including losses in publishing and telecom-
munications.

Health care employment increased by 20,000 in July, about in line
with the average monthly gain for the first half of this year but
down from an average monthly increase of 30,000 during 2008. Employ-
ment in lei-sure and hospitality has been little changed over the
past 3 months.

In July, the average workweek of production and nonsupervisory work-
ers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours.
The manufacturing workweek increased by 0.3 hour to 39.8 hours. Fac-
tory overtime was unchanged at 2.9 hours. (See table B-2.)...

The change in total nonfarm payroll employment for May was revised
from -322,000 to -303,000, and the change for June was revised from -
467,000 to -443,000.

THIS IS A SEVERE JOB DEPRESSION!!! We haven't lost this many jobs since the Great Depression.

Now, since people lose spending power when they lose their jobs; wouldn't it be safe to assume that they're not going to be very big consumers? Let's discuss this for a minute. If the economy is 72% consumer based, the job losses here will infact drop this consumer sentiment quite a bit? Sure people are going to take up sales, but it's likely to be the "already haves" vs. the "have nots".

Along with that missing consumer sentiment, didn't a record number of job losses stir a record number of foreclosures? The sudden drop in real estate prices caused many legitimate (non-ARM) borrowers to fall into foreclosure when their debt was greater than the value of their properties. When the demand for real estate drops due to affordability (people can't afford ARM loans without a job, sorry Obama); then real estate prices are going to keep dropping without the use of synthetic demand (credit default applied inventory for ARM loans used by speculators in the real estate market).

Wealth creation is never a guarentee. So apparently this "recovery" is the rebirth of the credit market which will probably hurt us as much as it helps. It should be the result of a solid trade relationship between our debtor country China, Japan and Saudi Arabia.

It's been almost a year since TARP was given to the corrupt CEO's to save their institutions with. They're not lending.

I'll bet anyone that next year, we're going to hear, "We didn't think it was this bad." Just like Bernanke unconciously dropped interest rates in 2005 to low levels to sell ARM loans to increase the returns for unsecured credit default investors.

It's just baloney. The media or our government is not telling us the truth.

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.

THIS MY FRIENDS IS THE CAUSE OF THE ECONOMIC DOWNTURN.

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.

Global economy thoughts

I was speaking to somebody from the ATCA today about the direction various countries are going in.

It is quite wonderful to gain insight from CFA's outside of America with a more objective bias (economics is technically a science of money movement, objectivity is the fundamental of science). And everything discussed I agree with.

I do want to say that as an American, since we are a major consumer of world goods that most of the news is centered around us. With that being said, we have to hunt for objective, good information on world affairs. We are an ego-centric country and outside of sources like The Economist; we don't get much unbiased, straightforward information on situations that happen around the world.

Here are a few thoughts;

-China is not stable. They are growing, they have a stimulus. But they are too "dependant on exports" and their domestic consumption (for the large population) is "anemic". My own thoughts are with the Chinese government. They have imposed high tarriffs on imports to China from the U.S..

From my own knowledge of Asia (a prior resident) - Since China is learning from their asian neighbors on what moves to make in global trade, all I know is that protectionism and conservatism is expected. However they are new to the global markets and the government has been extreme even at times; it will be difficult to predict their policies (ie. taxation) or the lack thereof as a means of business and economic growth and longevity.

-Germany and Japan are both struggling.

We both agreed that a stable government is going to be key in the long term economic vitality. I like countries like Australia and India. India especially, they're innovative. Innovation is quite competative and very difficult. Many other countries are aiming for innovation. America has benefitted from inventing products that create value; or wealth creation. America has invented and marketed items such as the car, the airplane, electricity, computers and the internet; outside of the vast commodities this country is blessed with- made America the most prosperous country in the world. I'm not quite schooled in anything that asia innovated, except for the products that were already invented.

Yet India in recent times have released the Tata. They have been in pursuit of a very energy efficient small economic car that will help us with increasing gas prices. I'm not sure about the actual quality of the car, but this is quality marketing. I could see America receiving a comparative advantage from innovations such as this.

This for £1,300 . . .

Top speed 65mph
Engine rear-mounted 623cc, 33bhp multipoint fuel injection engine
Transmission continuous variable transmission
Fuel consumption 50mpg
Body sheet metal with crumple zones
Extras air conditioning and airbag optional. No radio, no power steering, one windscreen wiper

Meanwhile, America's current Congress and Administration seems disinterested in business and economic growth with their socializing policies. It's a shame.
We are still the main consumer of world goods and what happens to us will inadvertanly affect the world on so many levels.

BABY BOOMER SPECIAL---GENERATIONAL THEFT= EPIC DISASTER

The generational groups have been labeled for marketing purposes, yet they're also most valuable for political purposes.

I wanted to dedicate an entire blog just for the Baby Boomers in light of America's disaster economy as of late. The group hated wars and loved collectivist solutions to our country's problems. We don't have a battle between political parties. The collectivist Boomers voted in collective anarchists under the guise of the Republican Party, so there is no republican party. We have an overwhelming democratic majority in Congress and an administration which has a very low approval rating.

The Boomers have an overwhelming voter base in this country. This is notable because they as a group have the ultimate say in what gets voted into office and who gets voted out. This can either work in our favor or work against us. Unfortnately in the last decade this trend has worked against the younger generations. I'll elaborate.

For the years 1940-1994, inclusive, 202 million Americans were born; about 77% of all Americans now living were born after 1939. During the baby boomer years, 1946-1964 (inclusive), 75.8 million Americans were born. The ratio of males to females has stayed relatively constant. There were approximately 1.05 male births for every one female birth.

"Every 7 Seconds"

I believe it was Bill Geist who noted first (in 1997) in his book "The Big 5-Oh" that another boomer turns 50 every 7 seconds. Whew! Is that possible? Well, you don't have to be a math major to check it out. Let's look at 50 years ago - 1959 - when 4,245,000 boomers were born. Now, I suppose that some of them have not made it this far, so let's round it down to 4,000,000. (That's just my estimate, but it is close enough for my purposes here.) So, a bit more than 4,000,000 will turn 50 in 2009. Let's see how that breaks down:

per year: 4,000,000
per day (4.0 mil / 365): 10,958
per hour (10.6 k / 24): 456
per minute (456 / 60): 7.1


And 7.1 per minute amounts to one every 8.5 seconds.

http://www.bbhq.com/bomrstat.htm


Now let's evalueate this situation.

Back in the days when Boomers became young adults;
-A single earner household could afford a mortgage, a car and to raise a family and save money without a college degree.
-Young adults refused to live with the "squares" and moved out, choosing to live in cheap apartments with their own cars they could afford on the REAL WAGES then.

Since then;
-the cost of living skyrocketed.
-families are no longer cohesive.
-the majority of this country's poor consist of single mother households. (libertarians aka. Mises are misogynists, and this is the reason why I'm not a libertarian. Women should be encouraged to enter the workforce with competative skills, not receiving welfare)
-living standards went down because the muscle determining our economic policies don't come from scholastic economists who work for our country; they come from politicians who take bribes from bureaucrats who are only interested in short term gains and monopolizations for themselves via. cheating at the expense of the taxpayer.
-real wages went down due to Outsourcing and Offshoring.
-The Boomers were really the last group of middle class earners that could save and afford a legitimate mortgage. Therefore most of the Primary owners of Real Estate are Boomers. Many made up the speculative, flippers who took out ARM loans to purposely inflate the price of real estate. Therefore, the price of real estate was unaffordable to the masses with w legitimate mortgage on our REAL WAGES.
-nobody in the Boomer group has shown any disapproval with the bailouts, the fraud in the subprime crisis, generational theft, outsourcing, offshoring, the federal deficit, the Halliburton scandal, etc. Although they want to preach government control over everything. They have the voting power to make it possible.
-illegal immigration increased more than tenfold. Our fiscal budgets can't handle this, over 80 hospitals closed in California alone due to the high cost of illegal immigration.
-the bailouts/collapse of the subprime market demonstrates that the Boomer generation as a whole learned nothing from the S&L Crisis. The greatest financial scandal in the history of the world happened under the Boomer watch.
-Instead of using their political/voting/investing powers to work, the Boomers instead chose to allow their elected politicians to take taxpayer dollars to bailout the bad CEO's. The anger is nothing more than theatrics. They vote with their wallets. Many people in general are nieve on how financial engineering works. Without a job market, there's nobody to pay off a krappy ARM Mortgage to inflate demand and prices on a house.
REGRESSIVE TAXATION:
-During a bad economy when the banks are still refusing to lend money, during a nasty economic contraction the boomer elected politicians want to hinder personal finances, consumer spending power, savings (for investments) and business expenses by imposing a hefty tax called a Cap and Trade policy.
-How in the world do pot/hash/crack/opium smoking, coke/meth sniffing Boomers get the audacity to increase the drinking age and impose regressive taxation on smokers? Again, these policies are imposed by Boomer elected politicians!! They're not taxing the rich, they're punishing people for being born without a silver spoon.
GOVERNMENT FISCAL INCOMPETANCE
The government lost social security. We have to feel for the Boomers on this one. HOWEVER-this is exactly what the Boomers decided to do about it.
1. 401K's, IRA's and other various retirement accounts. That's what I specialize in. The Dot com was a hit but after vesters were bled dry, they decided to speculate in derivatives/real estate.
2. Instead of calling out the government for mismanaging THEIR money (like the Boomers have the power to do); they instead choose to bailout the bad banks and criminals; impose a stimulus and put our fiscal situation at the mercy of foreign entities (ie. CHINA).
3. Now the Boomers want people like Pelosi (who can't even count) to regulate their healthcare and their retirement pension accounts.

Here's a quote from WikiInvest about Generational theft,

Impact on Medicare and Social Security
Most immediately, the Boomers will begin to draw government benefits such as Social Security and Medicare. Both entitlement programs will be exceedingly costly. In 2006, Social Security cost U.S. taxpayers about 4.2% of GDP, or approximately $554 billion. This figure is expected to increase to 6.2% of GDP by 2030, and to continue rising.

Meanwhile, the potential long-term costs of Medicare are even more severe. Currently, Medicare costs U.S. taxpayers about $230 billion per year, or 3.1% of GDP. However, these figures are expected to rise dramatically over the next 20 years as more Boomers pass age 75. In fact, government analysts estimate that by 2018, Medicare will have surpassed Social Security in terms of its annual cost.

Given these figures, the Social Security and Medicare Boards of Trustees stated in their 2007 Annual Report that, “…currently projected long-run growth rates [for the programs] are not sustainable under current financing arrangements.” Translation: Either long-term-benefits must decrease, or taxes must increase if benefits are to continue at their current levels.

Dependence on Foreign Countries
This quandary poses several difficulties for the U.S. government and for taxpayers. If current budget deficit levels persist, the federal government will be forced to pay for Social Security and Medicare by issuing new debt in the form of U.S. Treasury bonds. While this may lend long-term support to the price of the U.S. dollar, it will also allow foreign buyers—mostly Chinese and Japanese—to exert greater control over long-term U.S. interest rates.

Such a situation could become precarious if foreign buyers perceive that Treasuries no longer represent the best investment for their export-driven foreign currency reserves. For example, if euro-denominated government bonds become more attractive on a long-term basis, foreign buyers may liquidate Treasuries in large numbers, in which case long-term U.S. interest rates would soar. The resulting impact on U.S. credit and real estate markets could be severe.

Labor Burden on Younger Workers
For taxpayers, the Boomers’ retirement means that younger workers will have to bear a much larger burden in order to support the burgeoning ranks of retirees. Currently, there are 3.3 U.S. workers to support each retiree, but by 2030, this number will fall to only two. Given the political clout that seniors have and are likely to retain in the future, an increase in payroll taxes to support the Boomers’ needs seems entirely plausible. Extrapolated over a 10 to 20-year period, such an increase could represent a significant drag on U.S. economic growth. While increases in per-worker productivity may offset some of this burden, it remains to be seen how the U.S. will deal with what is arguably one of the most difficult financial burdens it has ever faced.

The investment advice given regarding the Boomer population are as follows:

Carnival Cruise Lines (CCL) and Royal Caribbean Cruises (RCL) stand to benefit from an increase in senior traffic, as both derive a large percentage of their income from passengers over 55. Royal Caribbean in particular has more than doubled its market capitalization in the last five years, and may continue to benefit as more seniors gravitate toward warmer-weather vacations. Retirement means more time to one’s self, and for many Boomers, that means time to travel. This is the generation of Woodstock and Timothy Leary; they have an expansive worldview and enjoy extending their horizons.
Merck (MRK) and Pfizer (PFE) are pharmaceutical giants that will almost certainly benefit as seniors require more prescriptions and Medicare coverage is expanded. Advanced Medical Optics (EYE), which manufactures products for cataract surgery, laser vision correction, and contact lens care, stands to benefit as well.
Walgreen Company (WAG), Rite Aid (RAD), CVS (CVS) are retail drugstores where senior citizens purchase their drugs.
NBTY (NTY), Leiner Health Products, and Nature's Sunshine Products (NATR) are nutritional supplements manufacturers. As an increasing number of senior citizens consume more healthcare dollars, many of these elderly consumers will also consume more preventive medicines, including the dietary supplements.
AmerisourceBergen Corporation (Holding Co) (ABC), Cardinal Health (CAH), and McKesson (MCK) are wholesalers who distribute branded and generic drugs to pharmacies, where senior citizens purchase their drugs.
Affordable Residential Communities (ARC), which manages more than 350 senior living communities nationwide, has seen solid appreciation over the last five years as analysts anticipate strong growth in demand for senior housing.
Brookdale Senior Living (BKD) offers senior living facilities which cater to independent and assisted living seniors. They also have been selected to assist in many elderly housing expansion projects.
Merrill Lynch (MER), Charles Schwab (SCHW), Principal Financial Group (PFG), and MetLife (MET), all of which have invested substantial resources in developing their retirement services, will likely reap large rewards as retirement assets under management grow over the next decade. For many Boomers, retirement will require specialized financial planning as life expectancies expand and estate planning becomes more complex.
BlackRock (BLK), Goldman Sachs Group (GS), and Lehman Brothers Fin SA (LEH) all manage pension funds for large institutional investors and will likely benefit as companies are forced to commit more capital toward funding their pension obligations.
Stryker (SYK) offers surgical drills, saws, rasps and even cement mixers. Orthopaedic Implants segment manufactures replacement joints, spinal rods, screws, as well as many other implants. Stryker also offers rehabilitation services in over 31 states. Zimmer Holdings (ZMH) offers similar services.
Stericycle collects and disposes of medical waste. An aging population uses more medical services than a younger population and consequently produces more medical waste for companies like Stericycle.

And to end this blog, it seems like the market anymore is the thieving of not just money, but debt and interest. The World Factbook noted that the net worth of America is around $50 trillion dollars, take or give $20 trillion for market/dollar value fluctuations. The projected burden on our country for Boomer Social Security, Medicare and Medicaid is $50 trillion. That's before the stimulus, the omnibus, the current federal deficit, the probably need for military defense, welfare, interest payables on our treasuries and many other administrative expenses.

Just food for thought. We need to get our Boomers aware of their power in our country at this time. I pray that they are on our side in fixing our country's problems instead of robbing future generations of opportunities and a quality of life they might deserve.

RON KIRK FOR THE WIN!!!

This Cabinet rookie is starting as a fiscal wide receiver who took the ball and decided to run for the 5 yard line against Team China. The referee, the WTO is a hairy beast of corruption who's working against Team USA. To play against China, we must understand that we have to beat the referees just so we can get our own numbers up on the board.

Obama's cabinet members, ie. Obama, our most inept Congress and Geithner is undermining Kirk's efforts by spending and giving the U.S. more reason to sell treasuries to China. China buys US Treasuries to prop up the dollar above the Yuan to stay competative on trade. So right now, Kirk is making the right plays by addressing the WTO on China's protectionist policies against the U.S. Unfortunately, team USA never gave Kirk pass protection and defensive linemen.

Here is the WTO issue that he's dealing with. I'm posting a vid and the text of the transcript at the bottom of this post.

Personally, if I were Obama, I would have picked a non-politician; preferably a proven expert at international business or anyone in the Microsoft department that implemented and successfully executed the anti-piracy black screen on their Microsoft Vista program.

Ron Kirk is a novice at international trade relations; his primary occupation before politics was law. He's an attorney. The press and "expert economist" SHILLS both muffle out the damage done to our economy due to the massive deficit in the private sector. Metaphorically, these "expert economists" are getting paid to be raped. Big business pimps for short term gains and the smart people have become their whores. The money must be that good to conciously undermine your professional credibility.

So thank god Ron Kirk understands the weight of his position. He is aggressively pursuing a diplomatic, pragmatical and more intellegent resolution in our trade relations with China. Fixing the trade deficit will repair the economy by putting non-interest compounding money supply back into circulation; which is going to work out much better than manipulating federal reserve interest rates and allowing fraudulent derivatives to be sold again in the market.

Even if he's being lobbied and encouraged by big business to address the WTO on grievances, Kirk is doing more for the American people than the 500+ overpaid idiots in our Congress. So for dealing with the WTO, he will deserve every penny if he can pull this off. I'm a fiscal republican who is extremely critical of the Obama Administration and their handling on domestic matters; and I'm giving Ron Kirk 110% of my support.

Maybe we should probably bribe the WTO like China does. Hmmmm--->how do I know that China bribes the WTO? The WTO is working against us and CHina is known to give out bribes. The probably of that happening is very high.

Here are a few issues that he's dealing with.

Ron Kirk is showing America that he wants to win the game.

Here are a few other links to other related trade issues Ron Kirk is addressing:
US Prepared To Take Fresh WTO Action Vs EU Over Airbus Aid

Secretary Gary Locke and USTR Ron Kirk Call on China To Revoke Mandatory Internet Filtering Software


I'm glad to see him addressing the World Trade Organization in this matter. This is exciting, encouraging news.


Transcripts of the press conference: Kirk and the China defense team.

TRANSCRIPT: Press Conference on WTO Case Against China Over Export Restraints on Raw MaterialsAmbassador Kirk: Good morning. Thank you all for joining us. Forgive me for being a few minutes late.

Before I begin my remarks about the subject of our press conference, the mayor in me has to take a moment and express our thoughts and prayers to the families of those who were killed in the horrible train accident yesterday and extend our support to Mayor Fenty and his team as they struggle to work through this tragedy and make some sense of it and learn from it. So our thoughts and prayers are with all those who lost their lives and those who may have been injured.

This morning I have an opportunity to talk to you about a matter that is critically important not just to our mission here at the United States Trade Representative's Office, but also, we believe, to all the businesses that are involved in helping keep America strong by being in the export business which allows them to create important and good jobs here at home.

Now more than ever, trade is essential to keeping America's economy afloat. We know that as a result of the decline in global trade over the last 18 months or so, to its lowest levels since World War II, and we've seen the effect that's had not only on our economy but on economies around the world.

More significantly, 97 percent of America's exporters are small and medium sized businesses that employ millions upon millions of citizens. Many of them are subcontractors to some of the larger companies with whom you may be more familiar.

And jobs dependent on trade in many cases are better-paying jobs that Americans want and desperately need - with salaries that can range from 13 to 18 percent higher than the national average.

Thus access to markets around the world that help us retain and create good-paying jobs are the kind of trade that Americans can support and that President Obama believes is a critical part of our economic recovery.

Thus barriers to trade can slow our ability to recover from this current economic crisis.

The Obama Administration has been clear with our trading partners that we wish to work together to keep global trade flowing and provide economic opportunities for all of our citizens. But we will always, and that's always, expect our trading partners to play by the rules.

Now, our preferred tools of engagement are direct dialogue and discussions to resolve differences as quickly as possible so that we can keep trade flowing efficiently. But there are instances when our talks don't work as well as we would like for them to, and we've always reserved the right to take action. We will enforce the rights of American manufacturers, farmers, ranchers, our services providers, and our workers through the rules-based global trading system at the World Trade Organization.

So today the Obama administration is insisting on the rights of American businesses and workers to a level playing field. Thus we are initiating formal consultations with China in the World Trade Organization, because we see a major problem in one particular area.

The United States believes that China is unfairly restricting exports of raw materials. These actions are hurting American steel, aluminum and chemical manufacturers, among other industries, that desperately need these materials to make their products. These actions also endanger thousands of jobs in America for those employed in these important sectors.

USTR is very concerned that China appears to be restricting these export materials at the expense of U.S. industries that need these materials for their production. And this appears to be occurring despite very strong and clear WTO rules designed to discipline export restraints.

And we are most troubled that this appears to be a conscious policy to create unfair preferences for Chinese industries by making raw materials cheaper for China's companies to get, and goods more economical for them to produce.

These export restrictions by China skew the playing field against American workers and businesses, but also other industries around the world dependent on these raw materials. And they unfairly advantage Chinese producers.

Under WTO rules, such distortion of the playing field on trade is simply not allowed. It is not okay in specific cases like the one that we raised today. It is certainly not okay as an underpinning of a country's overall industrial policy regime.

Now, more than ever, we must fight against this kind of domestic favoritism.

Earlier this month, I had an opportunity to speak to the US-China Business Council and I made it clear that the United States and our office seek a productive, cooperative relationship with China to advance our mutual economic relationship. This is particularly true in the field of trade.

But I also made it equally clear that the United States will not yield on enforcing the right of American businesses and exporters to compete on a level playing field with China.

And I made it plain that if we can do it by trade diplomacy, that we would do so where we had problems that arise. But if we have to file cases at the WTO, then we would do so.

So after more than two years of urging China to lift these unfair restrictions with no result, we are filing at the WTO today.

Now before many of you run off and write stories that we're escalating tension between the U.S. and China, I want to remind you of one thing. The WTO is a wonderful mechanism for resolving trade disputes that inevitably occur in mature relationships. It's been less than ten years, if you think about it, since China has been admitted to the World Trade Organization. During that time the United States has brought seven cases against China and China has brought four cases against us. And in many of those cases we have been able to resolve them by mutual understanding through Memorandum of Agreements before these cases go from the consultation stage to the appellate body.

So at this stage what we are simply doing is initiating this process by requesting formal consultations with China in a further attempt to find a negotiated solution to this problem. It is very much our hope that we will not have to proceed to the next stage which is requesting a WTO panel to examine this matter.

This is not a step that we have taken lightly, but we are taking it deliberately and it is a necessary step to enforce the rights of America's manufacturers.

It's also the fulfillment of a promise. One that I made during my confirmation hearings to Members of the House and Senate, and it's one that President Obama promised in his 2009 Trade Policy Agenda, that one of the highest priorities of our trade policy would be our standing up for the rights of American workers and businesses in the rules-based global trading system.

President Obama and I are of the firm belief that given a level playing field, American workers and businesses can compete with the best of those anywhere in the world, and we can win.

China's policies on these raw materials seem to put a giant thumb on the scale in favor of Chinese producers. It's our job to make sure we remove that thumb from the scale.

Today's action is proof of our commitment to level the playing field in this area. It is our hope that this dispute is resolved speedily and to the fair benefit of U.S. industries and workers and other industries around the world as well.

Our steelworkers, our aluminum producers, and workers in countless other industries deserve the chance to compete fairly with their Chinese counterparts. This case is simply designed to give them that chance.

I'll be happy to take your questions, and I would remind you after our questions and answers, that our China team and lawyers will be available for a more detailed briefing for you if you have specific questions.

Question: Jim Berger, Washington Trade Daily.

I assume you meet with the Chinese Minister later in the week in Paris. Did you find it to be of no purpose to bring this dispute up then for settlement? Or is it just off the table?

Ambassador Kirk: I do hope to have an opportunity to visit with my counterpart. I'm not sure of my final schedule, Jim, when I attend the OECD. But we believe that after two years of discussion and dialogue with no resolution it was well past the time to take this step at this particular time.

This also, frankly, may give me an opportunity to have a more fruitful conversation with my colleagues with us having taken this first step.

Question: Thank you, Mr. Ambassador, Zengxin Li from Caijing Magazine.

We all know that China is right now highly dependent on investments [inaudible]. [Inaudible] consider the risk of Chinese economy collapsing and endanger the world recovery and even U.S. jobs? Thank you.

Ambassador Kirk: Our first priority is making sure that the United States economy is restored and as part of that economic recovery we believe that trade can become a much more central part of that. But in order for that to happen, trade has to be fair.

One of the reasons the United States made I think the right decision and a wise decision to support China's admission to the WTO was so that we would have a forum to address these types of problems. And I'll be honest, I can't imagine that our resolving trade disputes in a manner that is consistent with commitments that China made when it was admitted to the WTO and it expressly made the commitment that it would not engage in this type of behavior. We think that asking our trading partners to play by the rules that we agreed to will in no way endanger their economy. And we think asking Chinese exporters, frankly, to compete with us on an even playing field will make them stronger and not weaker.

So it's not only good for American manufacturers, we think it will be good for China's economy in the long run.

Question: Dan Neumann, Inside U.S. Trade.

You talked about how these discussions have been going on for over two years. It was our understanding that the Bush administration considered filing a case on this problem at the end of its time in office but declined to.

What changed that calculation for the Obama administration? Was it simply a fact that the talks have gone on for two years? Or is this an example of the Obama administration being tougher on China?

Ambassador Kirk: Well Dan, in Texas we say that's not a question, that's an answer. I don't mean to be --

Question: What would you say in Washington?

Ambassador Kirk: I'd remind you that I'm not standing here as the third Trade Representative of the Bush administration, but as the first Trade Representative for President Obama. And we made a commitment that we would revisit our trade policy in every aspect. President Obama and I both believe that trade can play and should play a role in our overall economic recovery. But we were equally concerned that more and more Americans have become cynical about trade, and one of the reasons is that they believe that the United States has either lack of will or the resources to force our trading partners to play by the rules.

So we think that a critical step, first of all, is restoring America's confidence in our trade policy, and that we have to take the fairly pragmatic step of asking our partners to do what they committed to do. So it's not necessarily an indictment of the previous administration, but we believe if we're going to ask Americans to believe in our trade policy that we have to have our trading partners play by the rules.

Question: Jim Puzzanghera with the LA Times.

Given that this is the first filing by the Obama administration, and following up what you just said, what message do you hope this sends to other trading partners beyond China about the administration's intent to handle trade policy?

Ambassador Kirk: Hopefully all of our partners will realize that we're serious about this.

Secondly, for all of our economies, all of us have parroted the words that we don't want to engage in anti-protectionism, but we have to give real meaning to that. In order to keep global trade flowing and to keep trade liberalization an important part of all of our economic future, we have to engage in behavior that's consistent with the commitments that we made, whether it's through the WTO, or through any of our other Free Trade Agreements.

I want them to know, first of all, the United States is still open for business. We believe that trade can be a critical part of our economic and other countries' economic revival, but if you're going to do business with the United States you're going to have to play by the rules.

Question: Jose Lopez of the Mexican News Agency.

You said you support China's accession to the WTO to have a body to resolve these disputes. However, in March you tried to block the installation of a plant due to the complaint of Buy Mexico and the tuna dolphin safe label. Is there a double standard here?

Ambassador Kirk: No.

Question: Can you explain, please?

Ambassador Kirk: Yes. Listen, the whole purpose of entering, whether it's a Free Trade Agreement or the WTO is we make certain commitments about how we will conduct ourselves with respect to trade. We also set up a body and a framework for how we will resolve disputes. In the case of the tuna dolphin matter between the U.S. and Mexico, that is a matter that clearly should be resolved within the context of NAFTA and that dispute resolution mechanism.

In this case Mexico and the United States which have an extraordinarily close relationship culturally, trade, geographically. Mexico believes that the proper forum should have been the WTO. We have a firm belief that it should be within NAFTA. I don't see any inherent conflict in us insisting or at least pursuing the resolution of that through NAFTA which we think is the more appropriate forum.

Question: Sam Gilston with Washington Tariff and Trade Letter.

I'm trying to understand this. Despite all the complaints about the U.S. trade deficit with China and the antidumping and countervailing duty complaints against Chinese steel and chemicals, you're now saying that China's not exporting enough to the United States. I'm trying to get that in my mind to understand that. Can you clarify what specific products are not being exported that we want more exports from China now?

Ambassador Kirk: Sam, it does seem a bit counter-intuitive, but let me see if I can do it this way.

One, what we want is a non-distorted market between the United States and China. However that may occur, we will work to remove that distortion.

In the case of antidumping and those issues, that tends to be where we have a business that unfairly dumps an excessive amount of material or supplies of products into the United States over and above what we anticipated.

In this particular case we have China, we think, through the exercise of export restraints and other means unfairly restricting the flow of raw materials that are critical to the steel, aluminum and other chemical industries that causes two things. One, it limits our access to supplies that we have to have to make steel. SO it increases the cost of our supplies for American manufacturers. It increases the availability of those materials within China and reduces their costs which then can distort the market.

I'll give you one example. There is a product that's essential to making steel tubes that we call coke. In 2008 China produced 336 million metric tons of coke around the world. By putting export restraints on coke, the amount of exports dropped to 12 million metric tons. You can pretty quickly figure out the impact that had on manufacturers and producers outside of China and the competitive advantage that it gave to China's domestic producers.

So in this case the distortion of the market is caused by the export restraints, not the excess of products that are being shipped. But in every case our goal is clear. We want a market that is not distorted by either unfair tariffs, other non-tariff barriers, or export restraints.

Thank you all for coming.

Again, we have Claire Reade, Tim Stratford, members of our legal team that are happy to go through and give you a much more technical explanation of what we've done. We will give you the complete list of raw materials that are involved. We appreciate your time and attention this morning.

Thank you.

Oil prices are on the rise; China will soon be driving Hummers!

Here is why the Saudis love Obama. They know full well that alternative energy will not be on the markets tomorrow. Obama plays the environmentalist card to avoid drilling for oil offshore in Alaska. Which is a bad idea, America will now be the only 3rd world country without an oil export.

Here are two reasons why we should have drilled in Alaska. One, the U.S. uses more oil than any other country in the world. Because of the monopolization of autos, thanks to GM... (there's a "conspiracy theory" blaming GM for the lack of any cohesive intercity mass transit network, other than Amtrak.

Yes, both India and China have over a billion people each. America has only approximately 300 million people in it. They will both be increasing the demand for oil regardless of how little they consume.

Now here's the kicker. Government Motors, or GM just sold it's Hummer division to China. No they're not selling Hummers to China, they're selling that part of their business. Had we sold just the Hummers, we would've been in GREAT business. Asians are not known for their wonderful driving abilities. I'm part Asian so no it's not racist for me to say that. But there's a good possibility that out of a billion Chinese, people will be replacing their cars due to damages. Or at least parts.
This is a huge opportunity cost for Corporate America.

On top of that, Hummers consume A LOT of gas. It's not necessarily your 35 mpg gas efficient sudan. No siree. Now a billion Chinese are going to be exposed to and some will be driving gas guzzlers! A miracle would need to occur if China or even India starts driving solar powered vehicles before the cost of gas explodes. They could own the world if they came up with such an invention.

So now that the dollar has lost even more in value compared to the Dubai currency and it will raise prices in US Dollars on top of demand.

Great going Obama! Way to hurt Americans in a bad enough economy.