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.