Thursday, October 13, 2005

IT'S A BAD BAD BAD BAD BAD TRADE DEFICIT NEWS

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By Elaine Meinel Supkis

It gets worse and worse. We lose a major port, we lose a whole slew of oil/gas rigs, we lose our minds, we lose our wallets, the stupid bankruptcy laws that don't apply to Donald Trump or Delphi or Northwestern Airlines, world stock markets are wailing like lost children on an out of control roller coaster and the building boom is bumming out and what happens next?

Oh, it is October. The scary month. Few remember why, intimately. If you are over 80 years old, it is a dim memory, isn't it?

From Yahoo:
The nation's trade deficit rose 1.8 percent to $59.03 billion in August, the third highest in history, driven by higher oil prices.

Import prices climbed by 2.3 percent in September — the biggest one-month rise in 15 years — giving consumers new reasons to fear that inflation is rising and the Federal Reserve will continue to hike interest rates.

The rise in import prices was noticeably greater than the 0.9 percent increase that economists had predicted.

The cost for foreign oil rose by 12.2 percent to an all-time high of $17.16 billion in August, up from $15.3 billion in July. The average per barrel price of imported crude oil also set a record at $52.65 in August with further increases forecast given the surge in oil prices since August.

Analysts predicted further bad news on the trade deficit in the months ahead, reflecting the surge in energy costs that occurred after Katrina and Rita shut down refineries and oil and natural gas platforms along the Gulf Coast. Crude oil prices briefly spiked above $70 per barrel right after Katrina hit.
None of this is mysterious. What is mysterious is the refusal to mention that the Chinese will no longer bankroll our red ink in the quantities we desire, ie, a lot. This change which has been instituted just this week, is historic and will have a giant impact, humongous.
America's deficit with China increased to $18.47 billion in August, up 4.6 percent from the July level. The deficit with Japan narrowed slightly to $6.59 billion in August, compared to $6.63 billion in July.
The Japanese recirculate this surplus but the Chinese are now opting out of this system.
In other news, the government reported that the number of people who have lost their jobs because of Hurricanes Katrina and Rita jumped to 438,000 last week, helping push the number of first-time jobless claims nationwide for the week to 389,000. The Labor Department reported that an additional 75,000 hurricane-related claims were filed last week out of the nationwide total.
Well, duh. I said here, they couldn't process the tidalwave of jobless claims and now it is hitting hard like a tidal surge in a hurricane. Meanwhile, both Russia and America struggle to contain the fury of the Muslim believers who are all fired up and ready to fire on us. This religious force burns ever fiercer the more we fight them, duh.

Throwing oil literally on these fires and whooosh. We go up in flames. Ditto our money. We are spending $150 billion a year in other countries in order to keep the National Guard and other troops where they can't protect us! This is adding hugely to the trade deficit! Geeze. Duh again! Will anyone put the numbers together and realize the cost of this vast empire, one that is in nearly every country, even Haiti, is bankrupting us?

Naw. Too complicated.

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