Friday, December 17, 2004

US, German Exports; Crude, Gasoil Prices

I expressed my scepticism earlier that the falling dollar will really cure US deficits by raising exports.

Now, if you check the latest figures, which are until October (the month the Euro climb since August accelerated), you'll see a record one-month seasonally adjusted deficit (-55,464,000,000; topping the previous record - June this year - by about a hundred million). Even more significantly, this difference came as the growth of total exports slowed down.

At the same time, check the corresponding figures for the main Eurozone exporting power, Germany (best look at the two tables at the bottom; key below after [*] mark). The growth of exports exceeds that of exports both in volume and percentage change, and both for the total and the non-Euro subtotal (the latter I calculated: 9.5% vs. 7.9%) - this after the losses in the summer when the Euro was weak[+]. Keep in mind that in October 2003, the exchange rate hovered at around 1.15-1.17, a year later it was rising from 1,23 to 1,28.

Now, one thing you don't see in the above is how much of that trade is with the USA - but if you check the available data for the third quarter, then you see exports to the USA rising much faster than imports even in this downturn period - and you'll see China was the main reason for the lesser trade surplus.

So even if we play short-sighted and forget that a credit-based US consumer - global producer economy is not sustainable infinitely, I don't think there is a reason for the ECB to start paying imperial tax on the scale the Japanese and Chinese central banks do.


Meanwhile, on an issue I promised to follow, but didn't blog on for long: the stange election-year relationship of US crude oil prices and US gasoil prices. (Short story: companies cashed in at gas stations during May, but kept prices down during the crude price hikes of August and September.)

During the four weeks after my original post, the pattern broke: if we delay crude oil prices a week and cut off its peaks, both rose by equal measure (you have to multiply gasoil price differences by 42 for comparison). On the other hand, the previously built up discrepancy wasn't 'eaten up'. Also, in the last few weeks, one could see a mirror image of September - crude oil price is falling faster than gasoil price.

[*] "Ausfuhr"=export, "Einfuhr"=import, "Drittländer"='third countries' outside the EU, "Kalender-und saison-bereinigter Wert"=saisonally corrected value, "Vorjahresmonat"=same month previous year, "Vormonat"=previous month; I'm certain you can deduce the rest.

[+] The abysmal intelligence level of discourse on economics can be deduced from the fact that much of the press connected these bad summer data with the Euro price rise - in autumn, at the time when these summer statistics were released...


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