Posted on 11/27/2004 10:24:13 AM PST by soccer_linux_mozilla
The United States’ trade deficit is soaring and the once high-flying dollar has sunk to record lows against Europe’s common currency.
The dollar’s record low against the euro coincided with the government’s report that the United States was running a trade deficit through September at annual rate of 592 billion dollars. That compares with last year’s record 496 dollars billion. As a result, the country is having to borrow almost 600 billion dollars from overseas this year to pay for the imported cars, televisions and other items Americans are buying.
The EU, possible. But Japan and Taiwan might be helping us out as Indonesian and Malaysia grow to dominate ASEAN.
I think the troubles in China will lead to troubles in Indonesia and Malaysia.
Basically, the one thing keeping folks in Indonesia and Malaysia from lynching the ethnic Chinese in those countries is fear of annoying Beijing.
Remove that fear...
Southack, you're really losing it on this thread. Of course economic growth is deflationary. Office rents will decline if our growth included lots of new rental properties. Home prices will decline if we build lots of new houses.
If inflation is too much money chasing too few goods (money becomes worth less,buys less) then of course too many goods chasing too little money is deflation (money becomes worth more, buys more).
These jackasses we elect and re-elect to spend and spend are as complicit as the "American" (in name only) corporations who spend big bucks overseas to bring the cheap doo-dads to our marketplace.
All this destruction of our economy seems almost contrived. The poorer our nation is, and the more debt is accumulated, the easier it is to fold into the world of nations as though it were another South Africa.
So prices for goods and rents are *lower* in the U.S. today, after 74 years of economic growth, than they were in 1930?
Do you even understand what "deflationary" means?!
South, come on. You really believe this? Do you have a source for this belief or did you come up with it on your own?
c#392
Didn't even come close to saying that. I said growth is deflationary. Didn't say growth causes deflation.
Do you even understand what "deflationary" means?!
Yes, do you? Do you know what inflation is?
I can see your reasoning through out this thread, but wonder about the resurgence of American manufacturing. I am involved in the furniture industry and it seems that imported parts (and entire pieces imported unfinished KD) are integral to many of the American manufacturers I deal with. The weak dollar is wreaking havoc on bids we have out on many jobs. Even with the rising costs of imports in the last couple of years; the manufacturers making parts here (union labor etc...) had such high pricing that companies who imported part if not all of the product could still be more competitive.
In the eighties I worked for a manufacturer who was forced to import to remain competitive. Many companies wanted to control their quality by controlling the manufacturing, but had to compromise to stay in business. In the nineties the tradeshows were swamped with Chinese attendees collecting any and all product literature they could get their hands on. They are great imitators and can copy just about any product/design on the market. Major problem was their quality, but they have addressed that as well. Any company I work with who imports from Europe, frankly isn't getting any business from me right now. On the otherhand I have a couple of companies that are 100% American made products and business started ticking up right after the election.
Does economic growth in your world cause *any* level of deflation?
Interesting idea. Now, what if there are no good investments in the exporting country? What if the growth rate of the importing country is higher? Maybe the rational currency holder prefers the currency to what they could receive in exchange for it?
Do you know what a surplus does to supply and demand and price?
What's a "surplus"?
Inflation is a monetary phenomenon. If the money supply grows at 10% a year and GDP grows at 6% a year, the inflation rate is 4%.
If money supply grows at 10% a year but GDP grows at 12%, then deflation is 2%.
What's your point? You disagree?
You are disagreeing with yourself.
Not at all. What causes inflation?
Yes, you are disagreeing with yourself. On the one hand you claim that economic growth is deflationary, but on the other hand you claim that deflation is strictly a monetary phenomenon.
Economic growth is different than "monetary phenomenon," thus, you are disagreeing with yourself.
Are you just trying to be argumentative?
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