Actually, we will get so pissed off at a trade balance up 2,000 % that we will take the yen back down to 80 per dollar. IMHO.
Between times the deflationary spiral I have been predicting for the last several months on this forum is developing some real pearly white teeth...to it. C.V. Meyers where are you now that we need you. Does anyone here remember Meyers?
For private use only
(C)
Asian Export Boom a Bust
PAULINE JELINEK Associated Press Writer
SEOUL, South Korea (AP) - It was supposed to be the silver lining in Asia's financial crash.
Currencies weakened by the meltdown would make Asian goods cheaper in the United States and elsewhere. Exports would surge, and that would give a lift to the battered economies of Thailand, South Korea and others.
But that hasn't exactly happened, despite the predictions voiced widely in the United States and Asia.
Instead, the overseas sales of some Asian nations are falling, and in others aren't rising enough to make a difference.
So what happened to the hoped for export boom?
''It was unrealistic in the first place,'' said Dan Harwood, head of research at ABN Amro Asia Ltd. in Seoul.
In the past, Asian tigers like Thailand, Indonesia and South Korea may have exported their way to rapid growth. But that was when investment was plentiful, credit was cheap and customers were abundant.
Now, foreign investors have fled. Some of the nations' banking systems are failing and their interest rates are high. Many exporters are unable to get the credit they need to keep operating at a profit, to buy materials for manufacturing.
And that's even when banks have the money to spare.
A $575 million Bank of Thailand fund for exporters went undistributed by commercial banks last year. With their bad loans already estimated at 30 percent, Thai financial institutions were unwilling to risk making any more questionable loans.
In Indonesia and elsewhere, if banks are willing to lend at all, it's at crushing interest rates, ratcheted up as part of conditions attached to International Monetary Fund bailouts last year.
Then there's the problem of lower demand. Asian nations have traditionally been each other's trading partners - and many of those partners are drastically cutting imports.
''Trade between Asian countries was good, but general (world) demand is slowing and suddenly you've got a lot of Asian countries that are competing with themselves,'' said Harwood.
''They have no domestic markets and suddenly they're competing for a finite part of (the market in) Europe, the United States, Africa.''
Profitability of exports also has been hit by falling prices. South Korea is thinking about cutting production of computer chips because a glut in the market has so weakened prices.
Malaysia, with half of its market in the European Union and troubled Asia, was further hit by declining prices for key exports such as petroleum, palm oil and rubber.
''The economy is at risk of going nowhere,'' said Joanne Song, economist with PhileoAllied Securities in the capital, Kuala Lumpur.
Indeed, prospects for the rest of the year don't look good. For as poor as Asian export performances have been, the picture for imports has been worse.
Lackluster exports and severely reduced imports may have led to trade surpluses in South Korea and elsewhere. But import cutbacks have come from not only slumping consumer demand but also lowered demand for raw materials and capital goods such as machinery.
And, again, that's because Asian businesses can't get the credit to buy those goods.
''Fewer imports of raw materials now means fewer exports in the future,'' said Lee Pil-sang, economics professor at Korea University.
Further weighing on the future is the question of Japan.
Some economists had hoped Japan would take a stronger role in spurring the region's economies by boosting domestic consumption and opening up its markets to more Asian goods.
Instead, Japan bought 15 percent less from Asian exporters in April compared with a year ago - and its weakening yen is making for even stiffer competition among Asian exporters of cars, steel, electronics and other goods.
''They're all in a difficult position
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