Economy

The Trade Debacle With China

by Wolf Richter •  • Comments Off on The Trade Debacle With China

The US trade deficit with China will hit a record $300 billion for the year, a big hit to the economy. It’s politically convenient to blame China, particularly its yuan policy. But the driver is a broad strategy by US corporations to shift an increasing range of economic activities to China. And now a trade war has broken out. Politicians, have a word with your corporate sponsors!

When The Truth About The US Economy Comes From China

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In his “enough’s-enough” speech in Hawaii, Obama castigated China for its currency peg, a perennial complaint. Congress too regularly hyperventilates about the yuan being “artificially undervalued.” If China just allowed the yuan to trade freely, they say, it would solve the U.S. economic quagmire. Cheap political posturing—and full of bitter ironies.

The Price of Hope in the Mayhem of Manufacturing

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In what may be a precursor of a monumental shift, Toyota and Honda are planning to export U.S.-made vehicles to South Korea. Apparently, it’s now cheaper to produce cars here and ship them halfway across the world than it is to produce them in Japan. But to what banana-republic levels will the dollar and real wages have to sink before U.S. manufacturing is competitive with China?

Inflation High on the Hog For the Holidays

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The season’s ditty: companies announce big profits after they jack up prices. But even the inexplicable American consumer, the toughest creature out there, struggles with these prices as misery spreads into the middle class. Now add HoneyBaked to the list, just in time for the holidays. But there is hope.

Economic Devil Is In The Details

by Wolf Richter •  • Comments Off on Economic Devil Is In The Details

According to last week’s GDP number, the economy has been growing supposedly at a rate of 2.5% in the third quarter—thanks largely to the inexplicable American consumer, the toughest creature out there. But there are some pernicious trends and unpleasant zigzags that point the opposite way.

The Inexplicable American Consumer Strikes Again

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Consumer confidence indices have collapsed to levels not seen in years or even decades. Yet the toughest creature out there that no one has yet been able to beat down struck again. Consumer spending increased at an annual rate of 2.4% during the third quarter, though the mood has become outright morose since.

A Dysfunctional System That Bankrupts A Generation

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Tuition did it again: up 8.3% for universities and 8.7% for community colleges. For many students, the increases are even steeper. Here in California, they’re outright ridiculous. Student loans will cover much of it, though student loan debt already exceeds $1 trillion. Why? It’s the system.

Obama’s Refi: Special Tax For People Who Can’t Do Math

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President Obama’s expansion of a mortgage refinancing program is a way for underwater homeowners to reduce their monthly payments. That would save them some money, he said, “…and it gets those families spending again.” But there is an insidious hook buried inside….

Tough Day For Our Calamity Economy

by Wolf Richter •  • Comments Off on Tough Day For Our Calamity Economy

The ugly numbers speak volumes on how the Fed’s policies hurt the real economy. But those policies enable Congress and the White House to run up ruinous budget deficits that make those of the Eurozone look benign.

That’s inflation—not jobs, wages, or GDP.

The Brutal Trade Deficit

by Wolf Richter •  • Comments Off on The Brutal Trade Deficit

At $46 billion in August and a hair-raising $376 billion year to date, the trade deficit is a powerful descriptor of what’s wrong with the U.S. economy. By year end, it will amount to half a trillion. Economic activity gone overseas. The cause: an ancient and valid business principle that is now harming the overall economy.