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NEWS: U.S.A Trade Deficit Soars To $66 Billion

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posted on Nov, 10 2005 @ 02:49 PM
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The U.S.A trade deficit has soared to $66 billion dollars with a drop in exports and the record high oil prices in the wake of Katrina being blamed for the blowout. A mid point forecast set the trade gap at $61 billion but with the unexpected disaster the deficit widened by 11.4 percent from August. Exports fell overall with exports to the gulf region falling by over 16 percent and a strike at boeing took commercial aircraft exports down $2.4 billion. As imports from China rose to a record $23 billion the trade deficit with that country rose also in record numbers to $20.1 billion dollars.
 



www.abc.net.au
"We knew that there were going to be some hurricane-related distortions in the September data, but this really exceeded our worst fears. This was a turn for the worst," Michael Woolfolk said, senior currency strategist for Bank of New York.

A second government report showed overall US import prices unexpectedly fell 0.3 per cent last month, their first decline since May, as petroleum costs eased.

Petroleum import costs slipped 4.4 per cent in October but were still up 30.9 per cent over the past year, the Labor Department said in the report which may ease pressure on the Federal Reserve to keep hiking interest rates.

Despite the disruption to US exports and US Gulf Coast ports caused by Hurricane Katrina, and later Hurricane Rita, overall imports jumped 2.4 per cent in September to a record $US171.3 billion, led by the record value of petroleum imports.

Imports of food, animal feed and beverages and industrial supplies and materials also hit records and imports of services were near all-time highs, the Commerce Department said.

US exports tumbled 2.6 per cent to $US105.2 billion, the biggest setback since the September 2001 attacks on the United States.

However, exports of autos and auto parts, as well as consumer goods, hit records.




Please visit the link provided for the complete story.


Thats one third of the trade deficit owed to China. Thars scary. To many eggs in that basket.

China has been flooding the market with cheaper products for the last five or so years in areas previously monopolized by American and Japanese/Taiwanese manufacturers.

For example motorbikes usually dominated by major brands such as Yamaha and Honda are now being challenged by much cheaper (50 percent in some cases) Chinese alternatives.

Car parts are being offered cheaply as after market products once again with savings of hundreds and in some cases thousands of dollars on original manufacturers product of the same item.

Appliances such as household, kitchen, dvd players and entertainment are being flooded on the market at ridiculously low prices. DVD players normally sold over the hundred dollar mark are being sold by Chinese companies for as little as 35 to 40 dollars US. The products are cheap and break easily, terrible on support and serrvice but at the low prices can easily be thrown away and more bought. Consumers are spending more and buying products they normally wouldn't as the price is too good to pass up.

China is making a mint out of the western consumer and at the same time the wetern countries are putting themselves more deeply into China's debt. A situation that warrants close fast attention and watching for developments.




posted on Nov, 10 2005 @ 07:12 PM
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It's been higher. It was over $101 billion for the period of January - June 1999.

But, considering it was MUCH lower than that in 1998 (around $20 billion), and that it has been rising since 2000, it can't be a good thing.

And what's even scarier is the fact that 1/3 (33%) of that is imports from China.

EDIT: I just read the article again and realized that the $66 billion deficit is only for the month of September!


[edit on 10-11-2005 by elderban]



posted on Nov, 10 2005 @ 09:56 PM
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Now I may sound stupid, but please bear witat h me. The trade deficit means that we are 66 billion dollars in debt or that we just bought 66 billion dollars more than what we sold?

I mean all the products are paid for so how could we be in debt? Please I am an idiot and need clarifying.



posted on Nov, 10 2005 @ 10:07 PM
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Originally posted by DYepes
The trade deficit means that we are 66 billion dollars in debt or that we just bought 66 billion dollars more than what we sold?


It means that goods and services that were imported were $66 billion higher than the goods and services that were exported.

The US imported $171.3 billion worth of goods in September but only exported $105.2 billion, resulting in a goods deficit of $71.1 billion.

The services sector had a surplus, reducing the overall deficit a little.
The US imported $26.8 billion billion worth of services in September and exported $31.8 billion worth of services, resulting in a surplus of $5.0 billion.

www.census.gov...

[edit on 10-11-2005 by AceOfBase]



posted on Nov, 11 2005 @ 02:11 AM
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Originally posted by DYepes
Now I may sound stupid, but please bear witat h me. The trade deficit means that we are 66 billion dollars in debt or that we just bought 66 billion dollars more than what we sold?


It means nobody wants the stuff we make. It is a very bad thing. It means our money is ending up in the hands of other countries because "Made In America" and "dinosaurs" have something in common. Unless you can produce something the rest of the world wants you are basically no longer a viable economy.



posted on Nov, 11 2005 @ 03:02 AM
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Originally posted by DYepes
Now I may sound stupid, but please bear witat h me. The trade deficit means that we are 66 billion dollars in debt or that we just bought 66 billion dollars more than what we sold?

I mean all the products are paid for so how could we be in debt? Please I am an idiot and need clarifying.


Think of it like a bank account. If more goes out than comes in then eventually you run out or rather cannot afford to buy anymore. You can increase the number of dollars in your account by printing more but all this does is to decrease the value of the dollar so you have to spend more to buy the same. You could earn more in your account but to do this you have to sell more than you buy (oops).

Low prices from China are not a problem but an opportunity for western consumers to improve their cost of living i.e. cheap domestic white goods, computers, gizmos etc. Even though the item price is low those goods still have to be transported and traded within western borders which generates money for the tranporters and sellers. So instead of manufacturers being the anchor of the western economies as they were in the past its the service sectors, transport, retail, research and development that makes the west money. For example here in Britain, Dyson (vacuum cleaners) moved their manufacturing from Britain to the far east. People bitched and complained and some even decided to boycott Dyson goods. However, Dyson now employs more people in Britain than it did before, not in manufacturing but research and development. So Dyson jobs have improved in both quantity and quality.....a very good thing....and we can buy cheaper vacuum cleaners !

The very scary thing for the US is the pricing of oil in dollars or rather what would happen if oil was priced in euros which is slowly happening. It was euros that Iraq traded in which probably had more to do with war than anything else. Iraq oil was priced in dollars as soon as the invasion took place !NB the US didn't pinch Iraqi oil as some people may think. Iran also trades its oil in euros which is why the US is complaining about its nuclear program so it has leverage to persuade Iran to restore the dollar as the trading currency for it's oil . The problem with Iran is the amount of oil it trades with China and the US owes China billions of dollars. So basically the US economy is in a real mess with massive increasing pressure making it worse, you should be worried especially since your president is an idiot!

If oil is no longer traded in dollars then the US economy would collapse. Not shrink or go into recession since those are recoverable blips but a full scale meltdown. Shortages of food in shops, no fuel to drive your cars etc.



posted on Nov, 11 2005 @ 08:27 PM
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Like AoB said, we imported more than we exported.

The $66 billion was just for September. The trade deficit in the first nine months of the year totaled $529.8 billion, about 18 percent higher than at this time in 2004, and 142% higher than the $370 billion dollar trade deficit for the ENTIRE YEAR of 2000.

[edit on 11-11-2005 by elderban]


cjf

posted on Nov, 11 2005 @ 10:25 PM
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Originally posted by Mayet
China is making a mint out of the western consumer and at the same time the wetern countries are putting themselves more deeply into China's debt. A situation that warrants close fast attention and watching for developments.


The ‘trade deficit/surplus’ is not a ‘stand alone’ economic indicator in and of itself. General predictions and inferences can be made from the balance equation, but none in the negative direction some people are taking and not without discussing how trade functions in the GDP equation.

Trade ‘balance’ deficits are not statically economically ‘bad’.

From the quoted source:


"We knew that there were going to be some hurricane-related distortions in the September data, but this really exceeded our worst fears. This was a turn for the worst," Michael Woolfolk said, senior currency strategist for Bank of New York.


The ‘data’ a currency strategist reviews is the ‘current-account’ (a measure of trade, services, investments and tourism) and it is in a greater shortfall than predicted this period. A wider shortfall for currency traders means more dollars need to be converted to ‘other’ currencies to ‘pay’ for imports. Basically, not a bull market for dollars and not a negative reflection of the overall US economy.

.



posted on Nov, 12 2005 @ 01:03 AM
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It is absolutely a negative reflection on the U.S. economy. People don't want what we make. People in the U.S. look to other countries for the products they buy. That means dollars are leaving the country. They aren't coming back. There is only a set amount of money. If you keep shipping out more than you bring in eventually you will run out. And simply printing more money to dump into the circulation will destroy the economy even faster by taking a weak dollar and making it absolutely worthless.


cjf

posted on Nov, 12 2005 @ 02:15 AM
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Originally posted by Indy
It is absolutely a negative reflection on the U.S. economy.


No, it is not.

I will repeat what I have already stated:

Originally posted by cjf
The ‘trade deficit/surplus’ is not a ‘stand alone’ economic indicator in and of itself….

….Trade ‘balance’ deficits are not statically economically ‘bad’.




People don't want what we make.


Though in a portion of the general ‘trade balance’ this can be true, but not in the light you are casting.



People in the U.S. look to other countries for the products they buy. That means dollars are leaving the country. They aren't coming back. There is only a set amount of money. If you keep shipping out more than you bring in eventually you will run out.


For a start ..might I suggest ‘reading-up’ on non-politicized global macroeconomics, US economics and general economic indicators as functions of each before jumping to conclusions. The above quoted statements are in one of the largest areas of misconception which are commonly used and contorted by party politics to fit these common 'perceptions'.



And simply printing more money to dump into the circulation will destroy the economy even faster by taking a weak dollar and making it absolutely worthless.


No one has commented on 'printing money' in this thread to my knowledge, but wealth is being created; (off the top of my head, the recent US home net equity figures alone show US$8 trillion+ ) however not by printing money. And a weak dollar is not always an undesired goal especially if increasing imports is a goal.



.



posted on Nov, 12 2005 @ 03:06 AM
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Heres a side note that I thought was interesting.

On the news last night, I heard that its official ...... GWB and his Govt. have now borrowed more $$$$$$ than ALL previous Presidents put together since GWashington !!!

Ouch!!!!! Thats gotta hurt !!!!!



posted on Nov, 12 2005 @ 03:21 AM
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u.s is in 6-8 trillion in debt.just so ya know dyep.i wonder when world banks will come to collect it.i dont think it wise to keep borrowing at this rate.



posted on Nov, 12 2005 @ 03:32 AM
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Originally posted by Indy


It means nobody wants the stuff we make. It is a very bad thing


Thats alittle harsh makes it seem like we make inferior goods or something.

Nobody including our selves wants to pay for US goods that can be made in China for way cheaper since they pay their people crap. Whats the average manufacturing wage in China 0.60USD/hour


ady

posted on Nov, 13 2005 @ 05:45 AM
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Few points I would like to state;
1.)The government does not end up printing more dollars every time there is a deficit.It rather buys the dollars back by issueing bonds(read debt) against then.

Other countries also prefer to store US bonds rather than dollars as foreign exchange reserves because dollars do not multily lying in their vaults but bonds do carry some interest on them. Reserves held by China and India are more in US bonds rather than physical $s.

2)With a 4% growth in US GDP, a growth of uptill 4% in debt is not that bad as Debt to GDP ratio does not increase. With a current GDP of about $11750 billion this is about $470 billion.

3)It is the savings made by US companies by buying manufactured goods from China and services from India that contribute majorly to this 4% growth. So its a tough choise; Growth in GDP along with growth in debt versus no growth at all.



[edit on 13-11-2005 by ady]

[edit on 13-11-2005 by ady]



posted on Nov, 13 2005 @ 08:05 AM
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Originally posted by Mayet

China has been flooding the market with cheaper products for the last five or so years in areas previously monopolized by American and Japanese/Taiwanese manufacturers.


yes, exactly the number of years since mr. clinton recognized china as a full trading partner, lost your job? it isnt bushies fault(although he doesnt help)
it was the last scumbag who will fool the masses to electing in his wife. nice guy huh? he sold the USA to friggin china.



posted on Nov, 13 2005 @ 05:52 PM
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Originally posted by ShadowXIX
Thats alittle harsh makes it seem like we make inferior goods or something.

Nobody including our selves wants to pay for US goods that can be made in China for way cheaper since they pay their people crap. Whats the average manufacturing wage in China 0.60USD/hour


It may be harsh but it is reality. And if we continue to ship jobs to China who here will be able to afford the products that get shipped back in to the US? Nobody will be making money in the U.S. from the products they assemble/manufacture because there won't be any manufacturing or assembling going on. You either need to find a way to balance trade or you need to shut the borders and become isolationists otherwise the money will be bled dry and the economy will collapse. The Chinese are banking on our greed to lead to our demise.



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