I live in the USA and I am concerned about the future. I created this blog to share my thoughts on the economy and anything else that might catch my attention.
In dollar terms, given the commodity boom/bubble/whatever-it-is this should be expected.
I would be curious what the growth numbers are in tonnage.
I am even more curious how the growth numbers for manufactured goods compare.
If it is true that our wonderful growth in exports is merely "growth" from a shrinking dollar, yeah, that's pretty bad for all those machinery stocks some pundits have been trying to get me to buy.
Nor if true does it seem at all good for our economy. But I am not an economist, maybe that doesn't matter that much to the economy. They might say exported goods are fungible when it comes to trade balances. Sounds fishy to me, but again I don't know.
Export tonnage is up and does appear to be helping the trade deficit numbers. That being said, look what we're exporting. You'd think we were a banana republic and our natural resources were up for grabs. Well, that's what I tend to think anyway.
Once the world is fully rebalanced, our trade deficit should be gone.
We just need billions of people to earn the same wages we do so that there's no reason to outsource and build overseas factories.
Things will be fine once billions are driving cars and billions are enjoying a thriving global restaurant industry. That's all I'm really trying to say.
The sarcasm is so thick you could cut it with a butter knife (in lieu of actual butter should that be getting a bit pricey).
Container Shortage Frustrates U.S. Exporters http://online.wsj.com/article/SB121028483313278907.html?mod=googlenews_wsj
Exporters' frustration is building even as U.S. agricultural exports have jumped 20% by weight in the six months ended Feb. 29, compared with the same period last year, according to the Department of Agriculture.
Peter Friedman, executive director of the Agricultural Transportation Coalition, estimated agricultural exporters could have shipped 20% to 30% more products in the past six months if more containers were available.
...a banana republic also typically has large wealth and income inequities, poor infrastructure, poor schools, a backward economy, low capital spending, a reliance on foreign capital and money printing, budget deficits, and a weakening currency.
(BTW, I wrote this before seeing your last two posts...)
I'm sorry Mark, I don't get it. At least based on the links you sent, as an answer to the point I was trying to make.
I completely agree: in dollar terms imports ex-oil are down and exports are up.
I would also agree: in dollar terms bulk commodity exports are up by huge, hugest even, percentages. (Don't you remember "America is breadbasket to the world?")
But, that does not show whether the commodity tonnage is up by a substantially greater amount than manufactured-goods TEUs (for lack of a better analog to commodity tons).
Based on data MaxedOutMama has highlighted, manufactured good exports should be up. But I'm not sure by how much they really are up. Nor does it have to be either-or between manufactured goods and commodities.
I guess my point is, CR among others shows improving trade deficits. This is as-expected by all the economists given a falling currency. Stock speculators are driving up CAT, Boeing, et al because they think the low dollar is helping exports and they point to the trade numbers to prove it. So, if the industrials are not actually exporting more qty, rather they are importing more inflated dollars, and the trade numbers are primarily owing to bulk commodity exports, I think that is very meaningful analysis and worth knowing.
I guess I should just figure this out for myself. But then I'd have to start a blog. And I really prefer reading them to writing them. Day job and all. ;-)
I'm with you Allan. We've already gutted much of our manufacturing base. You can see that by looking for the Made in USA label at your local Wal-Mart.
If I thought all it took to correct the global imbalances was a declining currency then I would not have started an Illusion of Prosperity blog. There'd be an easy fix.
The problem as I see it is that there are BILLIONS of people who want our standard of living and are also willing to work for peanuts. What exactly is a declining dollar going to do to change that unless we too end up willing to work for peanuts in order to compete on equal terms?
When you add a cup of wine to a barrel of garbage you end up with a barrel of garbage.
When you add a cup of garbage to a barrel of wine you end up with a barrel of garbage.
We've got dilution problems even if America is a cup of wine (which I strongly suspect it isn't based on our massive debt and deficits).
I have never really bought the argument that fully combining 300 million decent standard of livings with several billion poor standard of livings would be a good idea for anyone other than the richest among us.
I know I'm not answering your questions. I'd really like to know the answers as well. I will say that we keep hearing talk of CAT and Boeing. That's all fine and dandy but that's just two companies and I do not consider them to be representative of our economy.
We've been told over and over that we're a service economy now. I believe that. So why would we now think that a service economy CAN export its way out of a mess? I just don't see it.
BTW, just took a really close look at all the categories. We export eggs??? To Canada? Over half a billion dollars worth!?! Natural gas liquids? I thought we were trying to *import* LNG, until the Asians bid it all away. And gem diamonds? Where from, to whom?
Much of the bizzare is probably, as you say, to Canada. We send a bit up over the border and they send a bit down back over the border. For example, we also import dairy products and eggs (just not as much).
And don't even get me started on how much Crude oil, petroleum products, and fuel oil we import. Perhaps I'll make a few more charts in the coming week. Pictures of this stuff seem to really help understand the vastness of the issue.
In dollar terms, given the commodity boom/bubble/whatever-it-is this should be expected.
ReplyDeleteI would be curious what the growth numbers are in tonnage.
I am even more curious how the growth numbers for manufactured goods compare.
If it is true that our wonderful growth in exports is merely "growth" from a shrinking dollar, yeah, that's pretty bad for all those machinery stocks some pundits have been trying to get me to buy.
Nor if true does it seem at all good for our economy. But I am not an economist, maybe that doesn't matter that much to the economy. They might say exported goods are fungible when it comes to trade balances. Sounds fishy to me, but again I don't know.
Stag,
ReplyDeleteThe data supports the thesis that global demand for commodities has increased. It also portends more CPI inflation imo.
Instead of dumping money into Blackstone, maybe China should buy our farms.
AllanF,
ReplyDeleteExport tonnage is up and does appear to be helping the trade deficit numbers. That being said, look what we're exporting. You'd think we were a banana republic and our natural resources were up for grabs. Well, that's what I tend to think anyway.
http://www.portoflosangeles.org/maritime/stats.asp
http://www.polb.com/economics/stats/latest_teus.asp
MAB,
ReplyDeleteOnce the world is fully rebalanced, our trade deficit should be gone.
We just need billions of people to earn the same wages we do so that there's no reason to outsource and build overseas factories.
Things will be fine once billions are driving cars and billions are enjoying a thriving global restaurant industry. That's all I'm really trying to say.
The sarcasm is so thick you could cut it with a butter knife (in lieu of actual butter should that be getting a bit pricey).
Stag,
ReplyDeleteEntropy. Eventually the universe will reach total randomness at which point things will no longer be totally random but totally uniform.
It's like stagflation, you can't win.
Container Shortage Frustrates U.S. Exporters
ReplyDeletehttp://online.wsj.com/article/SB121028483313278907.html?mod=googlenews_wsj
Exporters' frustration is building even as U.S. agricultural exports have jumped 20% by weight in the six months ended Feb. 29, compared with the same period last year, according to the Department of Agriculture.
Peter Friedman, executive director of the Agricultural Transportation Coalition, estimated agricultural exporters could have shipped 20% to 30% more products in the past six months if more containers were available.
We need to find a way to ship out more bananas.
Banana Republic
http://en.wikipedia.org/wiki/Banana_republic
...a banana republic also typically has large wealth and income inequities, poor infrastructure, poor schools, a backward economy, low capital spending, a reliance on foreign capital and money printing, budget deficits, and a weakening currency.
MAB,
ReplyDeleteEntropy. Eventually the universe will reach total randomness at which point things will no longer be totally random but totally uniform.
Nice analogy. It covers both lack of fuel AND employment.
Entropy
http://en.wikipedia.org/wiki/Entropy
...entropy is a measure of the unavailability of a system’s energy to do work.
Welcome to the entropy economy.
(BTW, I wrote this before seeing your last two posts...)
ReplyDeleteI'm sorry Mark, I don't get it. At least based on the links you sent, as an answer to the point I was trying to make.
I completely agree: in dollar terms imports ex-oil are down and exports are up.
I would also agree: in dollar terms bulk commodity exports are up by huge, hugest even, percentages. (Don't you remember "America is breadbasket to the world?")
But, that does not show whether the commodity tonnage is up by a substantially greater amount than manufactured-goods TEUs (for lack of a better analog to commodity tons).
Based on data MaxedOutMama has highlighted, manufactured good exports should be up. But I'm not sure by how much they really are up. Nor does it have to be either-or between manufactured goods and commodities.
I guess my point is, CR among others shows improving trade deficits. This is as-expected by all the economists given a falling currency. Stock speculators are driving up CAT, Boeing, et al because they think the low dollar is helping exports and they point to the trade numbers to prove it. So, if the industrials are not actually exporting more qty, rather they are importing more inflated dollars, and the trade numbers are primarily owing to bulk commodity exports, I think that is very meaningful analysis and worth knowing.
I guess I should just figure this out for myself. But then I'd have to start a blog. And I really prefer reading them to writing them. Day job and all. ;-)
AllanF,
ReplyDeleteI'm with you Allan. We've already gutted much of our manufacturing base. You can see that by looking for the Made in USA label at your local Wal-Mart.
If I thought all it took to correct the global imbalances was a declining currency then I would not have started an Illusion of Prosperity blog. There'd be an easy fix.
The problem as I see it is that there are BILLIONS of people who want our standard of living and are also willing to work for peanuts. What exactly is a declining dollar going to do to change that unless we too end up willing to work for peanuts in order to compete on equal terms?
AllanF,
ReplyDeleteI'm reminded of the following.
When you add a cup of wine to a barrel of garbage you end up with a barrel of garbage.
When you add a cup of garbage to a barrel of wine you end up with a barrel of garbage.
We've got dilution problems even if America is a cup of wine (which I strongly suspect it isn't based on our massive debt and deficits).
I have never really bought the argument that fully combining 300 million decent standard of livings with several billion poor standard of livings would be a good idea for anyone other than the richest among us.
One more thought.
ReplyDeleteI know I'm not answering your questions. I'd really like to know the answers as well. I will say that we keep hearing talk of CAT and Boeing. That's all fine and dandy but that's just two companies and I do not consider them to be representative of our economy.
We've been told over and over that we're a service economy now. I believe that. So why would we now think that a service economy CAN export its way out of a mess? I just don't see it.
BTW, just took a really close look at all the categories. We export eggs??? To Canada? Over half a billion dollars worth!?! Natural gas liquids? I thought we were trying to *import* LNG, until the Asians bid it all away. And gem diamonds? Where from, to whom?
ReplyDeleteThis stuff is just bizzare.
AllanF,
ReplyDeleteMuch of the bizzare is probably, as you say, to Canada. We send a bit up over the border and they send a bit down back over the border. For example, we also import dairy products and eggs (just not as much).
And don't even get me started on how much Crude oil, petroleum products, and fuel oil we import. Perhaps I'll make a few more charts in the coming week. Pictures of this stuff seem to really help understand the vastness of the issue.