America Looks More Like Greece Daily
The Washington/Wall Street economist morons want you to believe the dropping stock market is due solely to the Greece denial of its legal debt because "there is no other logical reason". The latest numbers from the District of Corruption show something much more sinister is at work.
For nearly six years we've been hearing how well the recovery is progressing, even if slower than projected. Now the economy is showing a new weakness with a virtually unreported one-two punch from the Commerce Department's trade deficit report--for May.
The trade deficit increased 2.9%, according to the report. Import activity actually fell slightly to $230.5 billion. Exports slid even faster, skidding .8% to 188.6 billion.
The conclusion of the report was, 'even with the slight increase in May, the deficit over the past two months is averaging less than what was seen in the first quarter. This should help boost growth in the second quarter.'
Have they looked at the calendar? The second quarter is history already. Maybe they meant the second half of the year but that is not what the numbers are showing at all.
The world economy is slowing. Our exports drooped--just like the imports. This definitely shows the U.S. economy is slowing but maybe not as much as the global economy.
Most of the weakness in exports is due to the strength of the dollar, but not all of it. The slowdown in imports is not explained in the positive reading of the report. It just confirms the suspicion the government bureaucrats are incapable of interpreting numbers correctly unless the news is positive. If the news is poor, as a realistic analysis of the report would produce, then the rosy outlook is pure conjecture aimed at keeping the peasants docile.
Normally the analysts would be correct, a narrowing of the trade deficit is good news as it would normally signal a revival in economic growth. But in this case, based on the continuing strength of the dollar in respect to other currencies, it needs to be balanced by a larger import growth that simply wasn't in the numbers.
This is the warning sign discovered hidden in the report.
The raw numbers continue to show a decline in per capita spending, not just in America but around the globe. This means the economic activity is slowing, not growing, around the globe.
Some analysts, like Paul Ashworth of Capital Economics, did say the dollar's value means trade deficits will remain a drag on the American economy for the rest of the year. What he failed to mention is the fact he was one of the foremost analysts who bemoaned the lack of American consumer spending during the first quarter. The slowing May import trade confirms his then-stated worry, only in much stronger terms.
The report's part about the trade with China being 11.1% higher, year-over-year, is a worry that seemed to be brushed under the rug. Instead the report focused on a trade surplus with Canada. The trade surplus with Canada ($644 million) was just barely 2% more than the trade deficit with China ($30.5 BILLION!) The reason the news about Canada was highlighted? It was our first monthly surplus with our northern neighbor in 25 years.
The reporting media also ingrained the trade victory given by Congressional Republicans to Barack Obama in the report. "President Barack Obama won a hard-fought trade victory last month when Congress finally passed the fast-track legislation he needed to wrap up negotiations with 11 Pacific nations" or things to that effect.
Congress should not have passed another one-way deal where those 11 Pacific nations stand more to gain than our own manufacturing sector. By the Republicans leadership pushing this through, it merely guarantees more Americans will lose their jobs and the stalling economic engine will have to face more people lining up for government sponsored aid in the near future.
The fast-track bill was sold to the public as "good for American workers and businesses by opening up export opportunities." True enough but only if we either require those nations to reduce their tariffs on American goods or raise the import duties on those incoming goods to the U.S.
That is the missing link needed to be possibly "good for American workers and businesses."
In either case, the gloomy trade deficit numbers continue to present a real, substantial, unaddressed 'headwind' for the American economy under the rosy headline.
Those headwinds, combined with other contrary stats, could combine to slow the American economy even further. That means more consuming people in government lines for some hand-out program or another.
That is what caused the Greek financial crisis. Imagine that, America--even with its vast resources--on an economic par with Greece! But that's what is coming.
"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson
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