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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (161345)	5/3/2005 10:17:28 AM
From: jttmab	Read Replies (1) \| Respond to of 281500

Something to think about with those numbers though.. Remember that prior to the 1970's US companies were owners of the oil production in the Mid-East, paying royalties to the various nations. Thus, energy exports to the US would, I believe, have counted in favor as a trade surplus, when sold to other countries. I also remember that the British were somewhat involved in the OPEC countries with oil. But I think royalties [if that's how they were counted] would be a rather small percentage of the overall trade deficit. For more significant would be US oil production, oil consumption, and the price of crude. Oil Production: hubbertpeak.com [see Fig 1.]US oil production peaked ~1971. Price of Crude. wtrg.com The price of oil peaked ~1980. Interestingly, the price of crude was substantially lower during WWII than it is today. [in 2000 dollars]. On the other hand, the price of oil dropped substantially after 1981 and you might think that would substantially improve the trade deficit thereafter. With the flight of US production capability overseas, most notably to China, one has to ask what it is that we have left to sell? Certainly we do export, but what we have to export is diminishing. Airbus now sells more commercial aircraft than Boeing. I might expect that position to flip back and forth over the years, but Boeing was the world dominant player and no longer is. Except revaluing the Yuan that they have conveniently permitted to devalue against all the other world currencies by maintaining the peg to the US$. The US$ has retreated some 25-30% against the Euro and the Yuan has followed suit due to that peg making their goods 30% cheaper than they were when the dollar was at its peak. Actually, the lower dollar was supposed to increase investment and exports. In fact, the opposite has been true. And not all investment money is flowing to China alone. Did you notice that France is getting more FDI in absolute dollars than the US? If the Yuan floats up that makes France [and the rest of the world] a more attractive target of investment. But China still is an attractive market to invest in. The potential for sales/profit in China is mind-boggling. The Yuan pegged at the $$$ is a double-edged sword. Let the Yuan float up 30% and what do you expect to happen to retail prices? And how are we going to make China float the Yuan? Are we also going to force China to raise labor rates? China has no long term barrier in arriving at equivalent productivity and quality. Maybe he was, but I have a feeling he's getting ready to, or is in the process of, unwinding those positions. ... I'm not sure what to say...how does this fit? <s>... webfitz.com jttmab