US Goods Trade Deficit Surges Near Record High (Don't Tell Trump)

[moweike]

https://www.zerohedge.com/news/2018...nges-near-record-high-deficit-dont-tell-trump


Do not show this to President Trump, he will not be happy...

In the few months since President Trump unleashed his trade war, predicated on managing back America's massive merchandise trade deficit, things have gone very wrong, judging by the numbers.

Against expectations of a $70.6 billion deficit, August's goods trade balance plunged to $75.8 billion - just shy of July 2008's record high deficit of $76.025 billion...

Notably, the trade deficit was worse than the forecast range $68b to $73.9b from 36 economists.

Whether this reflects pre-emptive actions ahead of actual tariffs is unclear:

• Exports fell 1.6% in Aug. to $137.912b from $140.199b in the prior month
  
  
• Imports rose 0.7% to $213.742b in Aug. from $212.246b in July

With exports of food and beverage and Industrial supplies plunging in August (and consumer goods surging).

Imports were dominated by a 3.2% increase in Automotives.

 

[Trango Towers]

I think that may have something to do with the USD strength

 

[Yaseen1]

fed has also increased interest rates which shows economy of u.s is in trouble and growth may slowdown

 

[cloud4000]

Exporters are shipping goods to US before tariffs take effect. This surge is not surprising.

 

[Hamartia Antidote]

fed has also increased interest rates which shows economy of u.s is in trouble and growth may slowdown

What?? They usually raise interest rates when the economy/stockMarket is doing good. They certainly didn’t suddenly lower interest rates drastically during the Bush/Obama transition because things were going great.

 

[Yaseen1]

What?? They usually raise interest rates when the economy/stockMarket is doing good. They certainly didn’t suddenly lower interest rates drastically during the Bush/Obama transition because things were going great.

when rates become high borrowing becomes expensive and businesses not able to borrow more for making new investment and people prefer to keep money in banks than to use it to spend for innovative business or consumption so overall economic growth may slow down .

 

[Hamartia Antidote]

when rates become high borrowing becomes expensive and businesses not able to borrow more for making new investment and people prefer to keep money in banks than to use it to spend for innovative business or consumption so overall economic growth may slow down .

yep, but read this as to why during good economic times when people have more money to spend the interest rate goes up:
https://money.howstuffworks.com/fed-change-interest-rate1.htm

"So why doesn't the Fed simply keep nominal rates low? The problem is that this also leads to inflation. If a society's demands for a certain good exceed the supply, then the product's price will go up. When inflation increases, economic growth begins to slow. The price of the good increases, and so demand for it wanes. Less demand leads to less production, and eventually, unemployment ensues."

 

[Yaseen1]

yep, but read this as to why during good economic times when people have more money to spend the interest rate goes up:
https://money.howstuffworks.com/fed-change-interest-rate1.htm

"So why doesn't the Fed simply keep nominal rates low? The problem is that this also leads to inflation. If a society's demands for a certain good exceed the supply, then the product's price will go up. When inflation increases, economic growth begins to slow. The price of the good increases, and so demand for it wanes. Less demand leads to less production, and eventually, unemployment ensues."

i think it will be much better to keep rate constant and very low like japan or to keep negative rate like japan.their economy is performing good.due to trade war the prices in u.s go much higher and to avoid inflation fed raised rates but it may damage domestic industrial growth and in long run benefit china as u.s will continue to depend on other countries for goods

 

[Hamartia Antidote]

i think it will be much better to keep rate constant and very low like japan or to keep negative rate like japan.their economy is performing good.due to trade war the prices in u.s go much higher and to avoid inflation fed raised rates but it may damage domestic industrial growth

They've been raising rates before the trade war:
https://www.forbes.com/sites/laurengensler/2017/12/13/federal-reserve-raises-interest-rates-for-third-time-in-2017/

They expected 4 this year:
https://www.bloomberg.com/view/articles/2018-08-27/fed-signals-4-rate-hikes-in-2018-but-december-isn-t-a-certainty

Here's a great example of how good economic times leads to inflation and hardship for the average person:

Time 3;31 They will talk about stuff other than housing

 

[Yaseen1]

They've been raising rates before the trade war:
https://www.forbes.com/sites/laurengensler/2017/12/13/federal-reserve-raises-interest-rates-for-third-time-in-2017/

They expected 4 this year:
https://www.bloomberg.com/view/articles/2018-08-27/fed-signals-4-rate-hikes-in-2018-but-december-isn-t-a-certainty

Here's a great example of how good economic times leads to inflation and hardship for the average person:

Time 3;31

interest rates should b zero if we want economic stability and we should promote profit sharing instead of interest rates.inflation can be lowered by reducing money supply for which paper currency should be ended as dollars are printed in large numbers which result in inflation.use gold or other currency which is in limited number and cannot be made artificially by the desire of those controlling federal reserve it will avoid inflation even if economic growth is higher

 

[Hamartia Antidote]

interest rates should b zero if we want economic stability and we should promote profit sharing instead of interest rates.inflation can be lowered by reducing money supply for which paper currency should be ended as dollars are printed in large numbers which result in inflation.use gold or other currency which is in limited number and cannot be made artificially by the desire of those controlling federal reserve it will avoid inflation even if economic growth is higher

Can't use gold because each ounce would need to be the value of probably a city block.
Just think of how tiny each piece would need to be to pay billions of people a day with it. Plus gold is only slightly less stupid than paper. It's good for electronics but not much else.

 

[Yaseen1]

Can't use gold because each ounce would need to be the value of probably a city block.
Just think of how tiny each piece would need to be to pay billions of people a day with it. Plus gold is only slightly less stupid than paper. It's good for electronics but not much else.

it is much better than paper currency.more tiny more easily portable.but we can mix gold with some other metal to make different denominations.for good economy and controlling inflation it is only option as it has intrinsic value.but paper has no value and can be duplicated by those who are controlling your central bank for their own benefits

 

[Hamartia Antidote]

it is much better than paper currency.more tiny more easily portable.but we can mix gold with some other metal to make different denominations.for good economy and controlling inflation it is only option as it has intrinsic value.but paper has no value and can be duplicated by those who are controlling your central bank for their own benefits

What intrinsic value does gold have compared to a steel nail?

 

[Yaseen1]

What intrinsic value does gold have compared to a steel nail?

it is a precious metal for centuries and it cannot be made artificially by man and it is in very limited amount in this world than steel so it is best to control money supply

 

[Hamartia Antidote]

it is a precious metal for centuries and it cannot be made artificially by man and it is in very limited amount in this world than steel so it is best to control money supply

I don't think we can make any metal artificially...so gold isn't special in that sense.
Platinum and palladium are much rarer than gold.

That "precious metal" term is only because of the whim of man