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U.S. Trade Deficit Improves in February

Old 04-12-06, 08:24 AM
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U.S. Trade Deficit Improves in February

http://news.yahoo.com/s/ap/20060412/..._ec_fi/economy


WASHINGTON - America's trade deficit showed a bigger-than-expected improvement in February as the politically sensitive imbalance with China dropped to the lowest level in nearly a year.

The Commerce Department reported Wednesday that the deficit fell to $65.7 billion, a 4.2 percent decline from January's record imbalance of $68.7 billion.

Even with the improvement, the February trade gap was the third highest on record and the deficit for the first two months of this year is running 13.5 percent above the pace in early 2005, a year when the U.S. deficit hit an all-time high of $723.6 billion.

Critics of President Bush's trade policies contend that the administration has failed to aggressively pursue unfair trade practices in other countries which have contributed to the loss of nearly 3 million manufacturing jobs since Bush took office in January 2001.


...(article continues)...


I just got done reading Economics in One Lesson after it was recommended by many on this board. The deficit with China might matter because their currency is pegged against the dollar. But why does the deficit matter otherwise?

3 million manufacturing jobs have been lost? but unemployment is down. We're making up those jobs with other ones. If china can manufacture more efficiently than we can and we can do other stuff more effciently, isn't that what we should do?
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Old 04-12-06, 08:28 AM
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3 million manufacturing jobs have been lost? but unemployment is down. We're making up those jobs with other ones.
You don't believe quality (pay & benefits) of those jobs are of some importance?

Employment figures can be (and are) misleading as hell.
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Old 04-12-06, 08:44 AM
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Originally Posted by classicman2
You don't believe quality (pay & benefits) of those jobs are of some importance?

Employment figures can be (and are) misleading as hell.
they are important, but alot has to do with skills of the worker.
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Old 04-12-06, 10:22 AM
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Only because consumer spending went way down in February.
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Old 04-12-06, 11:28 AM
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Originally Posted by Venusian
http://news.yahoo.com/s/ap/20060412/..._ec_fi/economy


WASHINGTON - America's trade deficit showed a bigger-than-expected improvement in February as the politically sensitive imbalance with China dropped to the lowest level in nearly a year.

The Commerce Department reported Wednesday that the deficit fell to $65.7 billion, a 4.2 percent decline from January's record imbalance of $68.7 billion.

Even with the improvement, the February trade gap was the third highest on record and the deficit for the first two months of this year is running 13.5 percent above the pace in early 2005, a year when the U.S. deficit hit an all-time high of $723.6 billion.

Critics of President Bush's trade policies contend that the administration has failed to aggressively pursue unfair trade practices in other countries which have contributed to the loss of nearly 3 million manufacturing jobs since Bush took office in January 2001.


...(article continues)...


I just got done reading Economics in One Lesson after it was recommended by many on this board. The deficit with China might matter because their currency is pegged against the dollar. But why does the deficit matter otherwise?

3 million manufacturing jobs have been lost? but unemployment is down. We're making up those jobs with other ones. If china can manufacture more efficiently than we can and we can do other stuff more effciently, isn't that what we should do?

Even this does not really matter, not anymore.
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Old 04-12-06, 11:40 AM
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the deficit with China?

why not anymore?
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Old 04-12-06, 12:17 PM
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Originally Posted by Venusian
the deficit with China?

why not anymore?


Primarily because America doesn't make anything that we import from China anymore. There are some other reasons as well but that is the main one.
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Old 04-12-06, 12:26 PM
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Let me add, I get the geopolitical reasons for not wanting to run as large of a trade deficit with China as we do. I was making a simple economic statement.
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Old 04-14-06, 09:30 AM
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From today's WSJ:

China said it will let companies and individuals make significant financial investments overseas for the first time, a policy shift that could temporarily ease U.S. pressure on Beijing to revalue its currency, the yuan.

The news comes ahead of Chinese President Hu Jintao's planned April 20 visit to the White House. While the moves fall short of an outright increase in the value of the yuan -- which the U.S. has called for -- the technical changes could affect China's currency exchange-rate system and may affect the yuan's value

The new investment rules from the State Administration of Foreign Exchange allow professionals to buy overseas stocks and make investments outside of China. The rules also let Chinese individuals buy at least $20,000 in foreign currency each year, while companies will be able to hold more in foreign currencies than currently allowed. The changes take effect May 1.

The Treasury Department greeted the announcement as a small step in the right direction. "What we're seeing is constant, incremental reform," said Tim Adams, undersecretary of the Treasury for international affairs. But, he added, the Chinese "still have a long way to go, and we would urge them to speed up the pace."

China's move may be an effort to deflect U.S. criticism without a deliberate move to strengthen the yuan. The Chinese central bank bolsters the value of the dollar -- and keeps the yuan weak -- by buying up dollars and selling yuan, putting far more yuan in circulation
...
Positive news.
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Old 04-14-06, 10:42 AM
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That could be more talk than reality. "Letting" Chinese buy foreign stocks and encouraging them or even making it possible without jumping through hoops are quite different things.

The rich people who are more likely to be able to do this are only able to buy $20,000 per year. That's chump change.
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Old 04-14-06, 11:52 AM
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Originally Posted by X
That could be more talk than reality. "Letting" Chinese buy foreign stocks and encouraging them or even making it possible without jumping through hoops are quite different things.

The rich people who are more likely to be able to do this are only able to buy $20,000 per year. That's chump change.


I agree. It is why I only stated that it was positive news, nothing more.
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