I read this article in the NY Times just now on China’s $13B trade surplus… for the month of May. I’m frightened to even look up what the US trade deficit was for May 2006. I’m sure it was quite ugly.
After posting a record $100 billion trade surplus in 2005, much of it with the United States and Europe, China said today that its surplus had already reached nearly $47 billion in the first five months of this year, a period that is historically slower for exports than the second half of the year.
The government said exports in May rose 25 percent, to $73 billion, while imports rose 22 percent, to $60 billion.
The U.S. trade deficit for April was $63.4B. The full report is available here via the U.S. Census Bureau. The U.S. numbers for May won’t be released until July 12th.
Those are some frightening numbers straight up and more so when you think about it for a minute. I’m no economist by any means, but it don’t take a fucking economist to know that those numbers spell S-H-I-T for us. The war in Iraq has cost us some $300+ Billion to date, just think of the things we could be doing with that.
There’s been talk for the past few months of the insane growth in China and all this pointing to the initial signs of inflation for China down the road a year or two. There’s also been talk of pressures from outside of China calling for allowing the Yuan to appreciate against other countries’ currencies in order to help level the global trading field.
I know that there are plenty of economically minded folk in the BooMunity, please share with us not so economically minded [alright, I admit it, I just want a freebie lesson!] ones as to what all this means in a more in-depth manner than me just saying that it spells S-H-I-T for us.
No-one knows really, which is probably the most frightening thing I could have said.
What goes around, comes around.
After half a century of calling the shots, it ain’t so nice being on the other end, eh?
Perhaps the British cousins, who taught us so much about how to be imperialists, could instruct us on downsizing.
It means we will still have cheap “made in China” made crap to buy for the foreseeable future. Like Lenovo laptops.
The trade deficit in and of itself is nothing much to worry about. We used to run a huge one with japan but nobody is too worried about them these days.
The fact that the Chinese are taking our dollars and plowing them right back into US debt is what is more worrisome. Goddammed Chinese! they should be blowing those $ on cheap Chinese goods just like we are! And then when the $ are gone they should start borrowing more $ at exhorbitant interest rates just like we do!
Hey but wait! If they start consuming instead of investing then inflation will suddenly take off like a rocket here in the US….now that wouldnt be so good for any of us would it?
Or would it? because the dollar would start to sink lower, in turn making OUR goods cheaper and more attractive to the 11 billion Chinese consumers (who are now US-style consumers, remember, in my hypothetical from above)and we are on the comeback trail baby! Financially speaking anyway.
Global financial markets and hedge funds make all this equilibrium possible. Along with golf on TV every weekend.
You and us U B S
A sweet and vicious cycle
This is the Bush administration job creation plan. They’ve created plenty of jobs… unfortunately, most of us can’t handle the commute to China.
And India and Pakistan
This past Wednesday, I took my first Mandarin class. Boy is it hard to make my midwestern-born-and-raised mouth make those sounds, but it’s going to be important to communicate in what could very likely be the Chinese Century.
When people ask me why I chose to take classes in such a hard language, I tell them that it’s going to be important to speak the new bosses language.
😉
I think there is a real question how long the Chinese growth can be sustained. The unfettered building of new factories and lack of controls on pollution is already apparent. The Yellow River has large dead stretches (I seem to remember that the whole length is now so polluted that it cannot sustain an ecosystem) The smaller rivers have been killed off by sudden releases of toxic waster. Farmland has been swallowed up by the building boom. A couple of new coal-fired power stations are going up each week- the acid rain could soon be affecting vegetation in the western USA. Those US dollars are going straight to the farmers in places like Brazil to buy soya beans.
And speaking of soy, isn’t it crazy that the farming of the healthy and useful soybean is destrying the rainforests? via AlterNet
Here’s something else of which to be afraid. Wages are slowly rising in China as is the Yuan. This means the stuff the US buys from China is going to go up in price which means inflation.
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