September Trade Deficit Numbers -- Not Good

U.S. September Trade Deficit Widens to Record $66.1 Billion

The various analysts and company spokespersons quoted in this article don't seem to be especially worried; they attribute the "record" deficits to one-time events, such as the Boeing strike and the September hurricanes. Ok, the Boeing strike is settled, and planes are shipping again, but the impact of the hurricanes isn't going to just vanish overnight.

ALso, the administration is trying to put pressure on China to (1) limit clothing exports to the US and (2) allow the yuan to float (a floating yuan will make Chinese exports more expensive in the US, and should reduce our trade deficit with China). Maybe I'm a professional pessimist, but this doesn't exactly cheer me up.

Incidentally, what's driving that $20 billion + traded eficit with China??? According to the US Census Buraeu (who tracks this information), we're buying "primarily toys, games, and sporting goods; TV’s and VCR’s; stereo equipment; and computers."

Your thoughts ?

Economic growth vs. inflation in EU

Today's news is appropriate. The ECB (European Central Bank) is keeping interest rates steady, despite pressures to cut rates to stimulate the European economy (which is facing the same energy-related problems as the US). From Business Week:

European Central Bank leaves rate steady

The euro is not just maintaing its strength against the dollar, but continuing to gain. Venezuela is shifting its reserves from US gov't securities to dollar-denominated deposits and is looking to increase it's euro holdings; is this Chavez's paranoia or a Good Idea????

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