June Trade Deficit Hi-Lites Futility of Obama Trade Policy

http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

I’ve been gone for a couple of days and am just catching up on Wednesday’s news about the trade deficit.  (A link to the report is provided above.)  I just about fell over when I heard the report on the news.  The trade deficit exploded in June to $49.9 billion from $42 billion in May, by far the worst montly trade deficit since the beginning of the global financial crisis in October, 2008. 

As bad as it sounds, the details are even worse.  Swings in the deficit have often been the result of a big change in oil imports.  But, in June, petroleum imports actually fell by almost a billion dollars.  The deficit in non-petroleum goods exploded by 24% from $32.2 billion in May to $40 billion in June. 

Exports fell by 2.2%, though exports remain pretty much on track for meeting the president’s goal of doubling exports in five years.  But any improvement in exports has been swamped by imports.  Here’s the charts:

Obamas Goal to Double Exports, 1st year          Obamas Goal to Double Exports

Those two charts don’t look all that alarming until the balance of trade is plotted:

Balance of Trade

When the president took office, the trade deficit was in free-fall, right along with the rest of the global economy.  Four months after he took office, it fell to less than $25 billion – little more than a third of its all-time high before the onset of the recession.  This alone probably had more to do with stabilizing the economy than anything associated with the stimulus plan.  But since then, in only 13 months, the trade deficit has more than doubled and the economy is on the brink of sinking back into recession. 

The president’s economic strategy is in shambles.  He naively counted on nations like China, Germany and Japan to honor their pledges to depend less on exports and more on growth in their domestic economies.  And he crossed his fingers and proclaimed that we’ll double exports in five years.  All in the hope of restoring some balance to the global economy.  Predictably, this strategy is proving to be an abysmal failure.  What little boost manufacturing has gotten from some growth in exports has been dwarfed by a tidal wave of imports.  Unemployment remains stubbornly high and a mountain of stimulus spending has barely kept GDP out of the red.  The economy stands once again at the brink.

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33 Responses to June Trade Deficit Hi-Lites Futility of Obama Trade Policy

  1. Ben Hoffman says:

    We need some protectionist policies, but there’s no way Republicans (and some Democrats) would allow something like that to pass. The Democrats couldn’t even get a “buy American” clause in the stimulus.

    You can blame Obama all you want, but the fault lies with Congress.

  2. Mark Hall says:

    When it comes to “trade”, the U.S. can’t even hold its own with the likes of Greece & Portugal.

    U.S. Trade Surplus with Greece:

    June 2009 YTD = $695.4 million
    June 2010 YTD = $243.5 million (-64.98%)

    U.S. Trade Deficit with Portugal:

    June 2009 YTD = – $ 53.9 million
    June 2010 YTD = – $547.0 million (+901.48%)

    Thank God we have trade surpluses with developing third world countries like Vietnam & Thailand.

    Oops! WRONG AGAIN….

  3. Mark Hall says:

    You can sure tell when China put the kibosh on domestic consumption and AGAIN ramped up its export machine.

    U.S. Per Capitia Consumption of Chinese Imports:

    Jan. 2010 = $ 81.18
    Feb. 2010 = $ 75.31
    Mar. 2010 = $ 78.33
    Apr. 2010 = $ 83.50
    May 2010 = $ 93.60
    Jun. 2010 = $105.94

    China Per Capita Consumption of U.S. Imports:

    Jan. 2010 = $ 5.18
    Feb. 2010 = $ 5.15
    Mar. 2010 = $ 5.57
    Apr. 2010 = $ 4.96
    May 2010 = $ 5.08
    Jun. 2010 = $ 5.05

    Ratio of U.S. Per Capita Consumption of Chinese Imports to China Per Capita Consumption of U.S. Imports:

    Jan. 2010 = 15.68 to 1.0
    Feb. 2010 = 14.61 to 1.0
    Mar. 2010 = 14.06 to 1.0
    Apr. 2010 = 16.85 to 1.0
    May 2010 = 18.44 to 1.0
    Jun. 2010 = 20.99 to 1.0

    With the 20.99 ratio for June, China is AGAIN closing in on its 2007 (pre-recession) ratio of 22.41.

    BACK TO NORMAL……..

  4. Mark Hall says:

    50-75 million American workers either unemployed, underemployed or underpaid (real wage growth) and our government is STILL more concerned about stimulating domestic consumer demand vs. re-creating domestic consumer supply.

    As of June 2010, China has amassed a nearly $120 billion trade surplus with the U.S.

    On August 11th, it was announced that the Obama Administration was handing out $2 billion to 17 states to help the unemployed pay their mortgages.

    WHAT IS WRONG WITH THIS PICTURE?

    • hungry4food says:

      because of their fear of what the supply-side fundamental function does when policies that drive the supply-side fundamental that enact job growth and keeping the environmentalists in their political camps , they would rather monetize debt and print money to give out to idle unemployed because that way less damage is being done to the earth , in the overall scheme of Climate change and what the left think , I know there is a desire to keep away from politics on left vs right here but watch what this left guy says and tell me he and the left that control the Congress and Administration are not causing the economic stall we have for this simple reason of over burdening the earths environment ; http://www.youtube.com/watch?v=DSlB1nW4S54&feature=player_embedded

      • Pete Murphy says:

        Global warming is off-topic here, but since you’ve suggested that concern for global warming is “the left’s” motivation for stifling the economy, I’ll respond. I don’t agree. If “the left” were trying to stifle economic growth out of concern for global warming, why would they be pursuing policies (namely trade policies) that fuel double-digit growth in China?

        I do believe in global warming and cutting carbon emissions to rein it in. But I also believe in having a vibrant economy with full employment and a high standard of living for all throughout the world. The two aren’t incompatible. What economists think of as “economic growth” consists mostly of population growth that contributes nothing to improving living standards. Rather, it actually retards it. If we were to reduce our population to a level that wasn’t economically overpopulated – that is, the level at which per capita consumption wouldn’t be constrained by over-crowding – my calculation is that the world’s population would be somewhere in the range of 1.5 to 2 billion people instead of today’s current level of 7 billion. Couple that with a shift from fossil fuel burning to more renewable sources of energy and global warming is no longer a problem. In fact, most problems associated with resource depletion would be alleviated as well.

        I don’t believe that Democrats are intentionally stifling the economy out of concern for global warming. They (along with Republicans) stifle it out of ignorance of fundamental economic relationships that are driving up global unemployment and that make the concept of free trade unworkable.

      • hungry4food says:

        OK Pete this is where it get sticky regarding Overpopulation and who decided how many , the debate that never happens in the USA is ” Do we Educate the Society and teach the realities of a Finite Resource such as earth that cannot continue to supply a doubling of the population over the next 60 years and through this understanding of reason people limit themselves to sustainable families , such as this Charts shows a reasoning of such understanding in developed nations , https://www.cia.gov/library/publications/the-world-factbook/rankorder/2127rank.html , or do we let government tell us how many children we can have when they fill in the blanks they left in the health care bill with a one child policy rule , and with that then comes a releasing of power over the people that then forces through rationing that a Cap and Trade bill will have due to increased costs of needs be a path that we choose to take to curb the fears of Green House Gas emissions and with this type of restrictions on resource consumption how does the Free Market supply-side capitalist system growth from expansion if we have a reduction and then neutralization of population growth as we see a lot of the cronies internationally want to see happen ?

      • Pete Murphy says:

        Your comment became a little difficult to decipher in the 2nd half, but I think I get the drift. I agree that education about the realities of resource limitations is necessary. It’s one of the approaches I advocated in my book. But that alone will never do the job as long as economists continue to preach that we can stretch resources indefinitely to accommodate never-ending population growth, and as long as growth is economists’ only remedy for any economic crisis. This is why, even in places as badly overpopulated as Japan, leaders raise alarm about an aging population and enact policies to encourage a higher birth rate. China stands virtually alone with their population management policies and, I suspect, even they will abandon them as they become more deeply immersed in capitalism.

        Regarding population management in the U.S., it can easily be accomplished without resorting to something so draconian as a one-child policy. All that’s needed is economic incentives provided by tax policy. Currently, the U.S. encourages a higher birth rate by offering tax deductions for each child. By reducing the base tax rate and then imposing a tax penalty for each child, or each one beyond a certain number, people will be motivated to choose smaller families. It’s critical to use such non-coercive methods. People must be free to choose the size of their families. Who care how many kids any one family has? What’s important is the overall birth rate, and we only need to reduce it a little.

        Reducing global population is a challenge beyond anyone’s capability. But perhaps if the U.S. blazed a path to show the rest of the world how it can be done ethically and non-coercively, then perhaps others will follow suit.

      • hungry4food says:

        Pete this statement , “I don’t believe that Democrats are intentionally stifling the economy out of concern for global warming. They (along with Republicans) stifle it out of ignorance of fundamental economic relationships that are driving up global unemployment and that make the concept of free trade unworkable”.

        it is hard for me to believe that the Ignorance claim is the problem when I Google terms like Overpopulation , Earths carrying Capacity, Bill Gates Population Control Youtube and he comes up telling people at a TED forum that Population needs to be stopped at 8.5 billion and not let grow beyond that , man you cannot convince me that the left and some of the RINO republicans have not been planning a total take over of population control for a time now , because their are so many websites out there talking about it that have direct ties to the Liberal side of the political spectrum along with some of the moderate RINOs like McCain , so I don’t agree with the Ignorant term , these guys are planning something and they have the Financial Industry in on the plan , they just don’t have the right moxie to lure the will of the people into peacefully excepting the type of control they are wanting to impose yet , and this is where we are today in terms of whats happening with economics and the reasons why Government Monetary Policies and wages are not taking a front and center stage in the political arena other than to keep extending the unemployed benefits because that in the minds of Environmentalists that control Washington DC from not just a USA position but worldwide position is why we do not see economic recovery policies coming out that can put growth back into the Financial markets that then turn around and finance expansion in the durable production markets . Its this fundamental not a level of Ignorance thats stalling worldwide economics , and the websites are out there to Prove my point , Google the term words Earth Carrying Capacity , Overpopulation , Population Control , all of these will bring up the Proof and the People behind them are in the White House advising Our President Today !

      • Pete Murphy says:

        No doubt there’s plenty of wealthy, influential people who see the problems associated with overpopulation. But they’ve had absolutely no influence in the political arena. If they have, why does the government continue to turn a blind eye to rampant illegal immigration? Why do European nations maintain themselves in a state of gross overpopulation with immigration from Africa and the Middle East? Why does every government on earth quake in fear at the prospect of an aging population?

        Frankly, I long for the day when I and others concerned about this issue do start to have more influence on policy. It’s nothing to be feared. The economy would be far better off.

      • hungry4food says:

        Pete I still have trouble with the idea that if we have a zero population growth in the world then how does a Consumer driven market grow in value if consumer goods do not increase in Volume sales ??

        And to your point on why Governments turn a blind eye to Illegal Immigration , thats easy , they ( Both Parties ) are after their vote , as far as Mexico is concerned they will increase the voting share by 75 Million votes in the USA and maintain a permanent majority , http://www.wnd.com/index.php?fa=PAGE.view&pageId=188173 , once they gain this control its easy to then Implement the draconian changes to limit rights of choice in ones ways of life and sugar coat it to look favorable to get the laws passed by kool-aid drinking give-me-something-for-nothing Big Government voters , they could care less about these people other than gaining their vote . As far as Europe goes they being the master appeasers of parliament , they probably wish they would have done things a bit different now given the anarchist generations they have seen evolve with open boarder policies , like the USA is trending towards .

        But the USA is not far behind the Euros with our own brand of Social Justice freaks , http://www.commondreams.org/view/2010/06/23-3

        And our Politicians will pander to these anarchists and bend the constitution as they try to keep a hold of these votes , sacrificing the other citizens along the way towards surfem …… so my point is supply-side economics is never going to see a time again where a developing nation can be the supplying investment to a financial investment sector that the Government through intervention will not clobber any hopes of prosperity because of the anarchist voters they will continue to appease , in this case younger Environmentalists that want Capitalism abolished and collective society in place of it . So how do you trust any of the data thats being used to determine ” FUTURE ” market growth and valuations with this type of Political Volatility thats rippling down through the market today with it changing so rapidly , like the bond markets are now becoming a landscape thats futile if tax revenues from business decline , and before a recovery in production can happen Government is going to rise the tax rates and further compound the problem ????
        This deflation / depression is going to feed on itself , and as supply falls from this deflation and production won’t increase because government has regulated the markets to the point that risk taking is too volatile and no one is willing to produce anything because the risk Government imposes is to great , so while everyone’s wages are lowering , supply is shrinking and all of a sudden Here comes Inflation , you heard that China instead of floating their yuan higher in value they are going to raise the Minimum wage so that will come to us in higher product costs , and then we have to pay more or do with less because it will still not be higher than what the USA would be able to manufacture at , so you see the way the simple Buy Low sell High economic Prosperity fundamental has led us to this point in time in a Global economic sense .
        I think we are in the beginning stages of a depression with no way to stop it , other than isolate and federalize the economy or find a way to use Inflation as a Growth model but everyone goes nuts over that and politically uses that against each other , or the decline in Overall Product supply/ expansion Government regulation will have restricting volume production and sale because of their lack of will to drive policies that promote people gaining higher wages from higher priced sale or a increase in volume products and sales , either way the Government is standing in the way of market expansions because of the Environmental Impact the Environmental Groups are screaming about all the time Producers try and grow a manufacturing concern , so Pete I think the collective proponents are going to win the political winds here because its the path of least resistance and that seems to be the path one generation chooses that the next then struggles with and eventually ends in World War , look at history ??

      • Pete Murphy says:

        Regarding your first question, you have to think in per capita terms. Since per capita consumption is being strangled by over-crowding, per capita consumption would actually increase if the population were reduced. Yes, total consumption would decline, but per capita consumption (along with per capita employment and standard of living) would rise.

        This is the whole crux of today’s economic crisis – attempting to “grow” our way back to economic health while ignoring the effect of overpopulation. Here’s an example that I’ve used many times. Consider housing in Japan, a nation ten times as densely populated as the U.S. Their per capita consumption of dwelling space is less than one third that of Americans. Consequently, their per capita employment in the building, furnishing and maintenance of housing is less than one third that of Americans. But because they are ten times as densely populated, their volume of housing is three times higher higher than it would be if their population had leveled off at America’s population density.

        Now if you’re in the business of building, furnishing and maintaining homes in Japan, this is very good news. Population growth has driven an increased demand for housing and you’d like to see that population growth continue forever. But, if you’re a Japanese citizen, it’s very bad news. You’re forced to live in cramped quarters and, with per capita employment in the housing sector only one third of what it should be, it makes it that much harder to find a job. All of the people in Japan who would otherwise be working in the housing industry are now forced to seek employment in some other sector of the economy. The problem is that per capita consumption of nearly everything in Japan (and in any densely populated society) is similarly affected. The result is an enormous imbalance in their supply of labor vs. the demand. This is why they’re utterly dependent on manufacturing for export in order to keep their unemployment rate down.

        Our single-minded focus on macroeconomic growth, as measured by GDP (and largely driven by population growth), is resulting in a steadily worsening over-crowding situation, driving down per capita consumption and driving up unemployment. This is precisely why, in spite of rising GDP, our unemployment situation is getting worse.

      • hungry4food says:

        Pete you agree that our current supply-side economic function is fatally flawed and that investors should stay out of the stock market because of the examples of unsustainable GDP because of the fact that you pointed out ” we Cannot Grow or expand our way out of this under the current accounting method of Durable product Production as the Only form being used on wall street to value the markets ??

      • Pete Murphy says:

        No. I don’t advise staying out of the stock market. Companies will find a way to make money regardless of the circumstances, even in an environment of a stagnant or declining population. There will still be companies that are winners and grow, cannibalizing the losers. The trick is to pick the winners, just like it is now.

  5. Peteopolis says:

    1. Demographic change – Uneducated, unskilled resource consumers being substituted for high value-added, taxpaying workforce.

    2.(Domestic) resource depletion – USA imports 2/3 of its daily oil consumption, with 1/2 of those imports coming from exchange with hostile countries. (Please note subtlety of last word – which countries are ‘hostile’ is not specified.)

    3. Off-shoring – Concomitant with demographic change, international conglomerates, which may or may not be domiciled in the US, play out global wage arbitrage while seeking lowest cost providers.

    4. Financial suicide – 65 years in the making (since the end of WWII), compounding principle+interest has caused incremental debt to drop below the magic 1:1 ROI on GDP as diminishing marginal utility has eroded future investment incentives to negative returns.
    I know this keeps getting repeated, but we’re screwed, blued & tattooed. Not sure why people feel compelled to continue producing these apparently sincere analyses of the failings of certain economic policy decisions. I mean, talk about falling for the diversion; yes, Keynesian theory is simply a cover story.

    To paraphrase Voltaire, if Keynes did not exist, it would have been necessary for the power-elite to invent him. The real game has always had one goal – whatever tools, techniques, and tricks periodically became available were simply co-opted & employed to
    further their agenda.

    I mean, look at that list above – anybody who was even half-awake could tell the roulette wheel was broken. Predicting these outcomes is child’s play to anyone paying attention. We were set up to be taken down by making damn sure those who never pay attention had full voting franchise.

    I find these reports intensely boring. Talk about barn doors & horses after the fact. My primary focus is to figure out a way to make sure these guys don’t get away with their crimes. Hopefully, sufficiently increased public awareness may potentially cut-off their various avenues of escape when the SHTF.

  6. MikeF says:

    Peteopolis,

    You were correct right down to your last statement, “My primary focus is to figure out a way to make sure these guys don’t get away with their crimes.” There is no way to accomplish that due to the makeup of the human mind.

    Four thousand years of written history demonstrate that power, greed, and vanity have been the makeup of the ruling class since time began. Nothing has changed. The masses are as ignorant, delusional, and irrational as ever. It is IMPOSSIBLE to change the course of human events from a macro standpoint.

    Our plan is to grow the population and economy until such time that our resource base is totally exhausted. There is no plan “B”.

    • Pete Murphy says:

      OK, Randy and Mike, now we’re having a reasonable discussion. And I don’t disagree with you one bit that the pursuit of endless growth makes zero sense.

      Why are all the policies you’ve itemized being pursued? Because the field of economics believes (or has until very recently*) that economic growth can continue forever. They believe that man is ingenious enough to overcome all obstacles like the finiteness of resources, through technological innovations that make possible conservation, recycling and substitution. Politicians, both the left and the right, follow their advice because they have nothing else to follow. My “primary focus” is to show that, regardless of whether or not resource limitations ever prove to be an insurmountable obstacle to more population growth, such growth doesn’t make sense from an economic perspective because over-crowding will erode per capita consumption, driving an economic decline. And that’s exactly what we see happening.

      I believe that the only way change will ever come is when the field of economics pulls its collective head out of its theoretical models of growth and takes note of the real-world relationships between population growth, per capita consumption and unemployment.

      * – In the last decade, economists have begun to redefine economic sustainability in terms of “happiness,” such that if we can increase our “happiness” by simplifying our lives and consuming less. They never explain how employment will be provided in this world of reduced consumption.

      • hungry4food says:

        Pete I agree with what you say , ” I believe that the only way change will ever come is when the field of economics pulls its collective head out of its theoretical models of growth and takes note of the real-world relationships between population growth, per capital consumption and unemployment ” .

        This is where I say the Wall Street Gang and our Government agencies that are still using the same Supply-Side data accounting matrix but are trying to install a Keynes style of economic stimulus , is why the economic market system is so volition now because the old standard measures of deficit spending that effects currency values under a supply-side rule has the investor class signaling Inflation , or deflation because of the nature of the supply-side fundamental , but the Government is over in the Keynes camp trying to use that way because they can maintain more control over economic activity with control over the capital , and all this is having a volition affect because Trust in the Government policies is faltering . This is forcing Investors to seek safe haven positions such as Gold , while they watch what the Government ends up doing with the economic policies , which is a direct opposite of what the free markets have been valued on all these years , and the Government does not want to come right out and tell the Private sector what its up to because they fear a total collapse as this would send everyone out of the markets and into the dark corners of the world , and then the Government would be left totally running as a Dictatorship . World markets Isolate and we would have come full circle back to where we were Post WW era . I think we go there anyway , but thats my Opinion .

  7. hungry4food says:

    Another thing to research that you might find interesting Pete is the Difference between Publican and Private wage levels , today the disparity between the 2 is roughly 55-60 % higher in the Government wages over the Private sector , so this is another confusing factor in accounting a sustainable market value under the supply-side fundamental , so again volatility sets into the market more as the investors and fund managers , analysts all try and understand how the state and federal liabilities are to be sustained , and gold keeps rising as the no faith in Government rule rolls on ………

  8. Peteopolis says:

    Alexis de Tocqueville: “Democracy in America” orginially published in french in 1840.

    Final paragraph bears repeating: “…it does not tyrannize, it hinders, it represses, it enervates, it extinguishes, it stupifies, and finally it reduces each nation to being nothing more than a flock of timid and industrious animals, of which the government is the shepherd”

    “It seems that, if despotism came to be established among the democratic nations of today, it would have other characteristics; it would be more extensive and milder, and it would degrade men without tormenting
    them. I do not doubt that, in centuries of enlightenment and equality such as ours, sovereigns might have succeeded more easily in uniting all public
    powers in their hands alone, and in penetrating more habitually and more deeply into the circle of private interests, than any of those of antiquity
    were ever able to do. But this same equality, which facilitates despotism, tempers it; we have seen how, as men are more similar and more equal, public mores become more humane and milder; when no citizen has a great power or great wealth, tyranny lacks, in a way, opportunity and theater. Since all fortunes are mediocre, passions are naturally contained, imagination limited, pleasures simple. This universal moderation moderates the sovereign himself and stops within certain limits the disordered impulse of
    his desires. Apart from these reasons drawn from the very nature of the social state, I could add many others that would take me beyond my subject; but I want to keep myself within the limits that I have set for myself. Democratic governments will be able to become violent and even cruel in certain moments of great agitation and great dangers; but these crises
    will be rare and passing. When I think about the petty passions of the men of our times, about
    the softness of their mores, about the extent of their enlightenment, about the purity of their religion, about the mildness of their morality, about their painstaking and steady habits, about the restraint that they nearly all maintain in vice as in virtue, I am not afraid that they will find in their leaders tyrants, but rather tutors.
    So I think that the type of oppression by which democratic peoples are threatened will resemble nothing of what preceded it in the world; our
    contemporaries cannot find the image of it in their memories. I want to imagine under what new features despotism could present itself to the world; I see an innumerable crowd of similar and equal men who
    spin around restlessly, in order to gain small and vulgar pleasures withwhich they fill their souls. Each one of them, withdrawn apart, is like a stranger
    to the destiny of all the others; his children and his particular friends form for him the entire human species;g as for the remainder of his fellow citizens,
    he is next to them, but he does not see them; he touches them without feeling them; he exists only in himself and for himself alone, and if he still has a family, you can say that at least he no longer has a country. Above those men arises an immense and tutelary power that alone takes charge of assuring their enjoyment and of looking after their fate. It is absolute, detailed, regular, far-sighted and mild. It would resemble paternal power if, like it, it had as a goal to prepare men for manhood; but on the
    contrary it seeks only to fix them irrevocably in childhood; it likes the citizens to enjoy themselves, provided that they think only about enjoying
    themselves. It works willingly for their happiness; but it wants to be the unique agent for it and the sole arbiter; it attends to their security, provides
    for their needs, facilitates their pleasures, conducts their principal affairs, directs their industry, settles their estates, divides their inheritances; how can it not remove entirely from them the trouble to think and the difficulty
    of living? This is how it makes the use of free will less useful and rarer every day; how it encloses the action of the will within a smaller space and little by little steals from each citizen even the use of himself. Equality has prepared men for all these things; it has disposed men to bear them and often even to regard them as a benefit. After having thus taken each individual one by one into its powerful
    hands, and having molded him as it pleases, the sovereign power extends its arms over the entire society; it covers the surface of society with a network of small, complicated, minute, and uniform rules, which the most original minds and the most vigorous souls cannot break through to go beyond the crowd; it does not break wills, but it softens them, bends them and directs them; [] it rarely forces action, but it constantly opposes your acting; it does not destroy, it prevents birth; it does not tyrannize, it hinders, it represses, it enervates, it extinguishes, it stupifies, and finally it reduces each nation to being nothing more than a flock of timid and industrious animals, of which the government is the shepherd.”

  9. hungry4food says:

    The chart here shows why I say we are at a time in history like no other and why its not wise to suggest staying in the equities markets because the volatility it is facing from a unwilling investor venture capitalist because of the water shortage issues is the problem , How do you underwrite a 30 year home loan to an industry thats facing a hard time supplying water , and expand this market to profitability ???? , this chart shows a time when technology was able to drive resource supply expansion to keep up with population expansion up until the last 10 years ,
    http://finance.yahoo.com/q/bc?s=DJI&t=my&l=on&z=m&q=l&c=

    But this chart shows you that our cereal grain yield increases have been flat lining for the same time that the Dow has flat lined , 10 years now ;

    And this study predicted that by the year 2000 we would see population struggling over resource shortages mainly energy , but all finite resources ; http://www.population-security.org/11-CH3.html
    http://economix.blogs.nytimes.com/2010/07/26/armageddon-wars-overpopulation-vs-global-warming/?src=busln
    http://www.metacafe.com/watch/621146/cia_predicts_the_future_2015_overpopulation/

    I think the Market is toast as far as any creditable stability coming from a stable growth policy coming from world Governments that will stay committed to a World market , as we just saw how that worked for Home Mortgage industry , and given the water shortages that are looming , consensus in keeping the international markets out of bubble territory again is a long shot , http://www.marketskeptics.com/2010/04/time-water-running-out-for-americas.html
    http://news.nationalgeographic.com/news/2010/05/100505-fossil-water-radioactive-science-environment/ , and if it gets to volatile with reactions from countries like what Russia did last week with their grain taking it off the export market , then if this drives food prices into unaffordable positions for the Middle class You can bet the Government Will Intervene if a vital need like water is capitalized on and the price drives it out of reach , the Government will set price caps on it , and if you were betting on that you might eat it as that bubble busts , and that makes the market a very risky place to be …. thats what I see going on here is a Technology field of enterprise thats struggling to keep up with demand and the markets are starting to sense it as they keep falling down after a climb up , as the last 10 years show us in the dow chart .

    • hungry4food says:

      heres another Dow chart link ,http://stockcharts.com/charts/historical/djia1900.html , but I think it shows the war of resource expansion , technology innovation that helped to increase the expansion of resources that kept up with a growing population that went from 1.9 billion up to 7 billion by some estimates , and this war of attrition I think is reaching its carrying capacity , on water , unless massive desalination efforts are fast tracked , but we have a Government under siege by the Environmentalists who say NO tapping the Ocean water , we would rather see nature take its course with mankind , see this link and understand these are the same people who are advising the Administration ; http://dieoff.org/page185.htm – note the date on this and then scroll down to the ,” What you Can Do ”
      …..so do you gamble on a investment in the stock market with that kind of thinking going on out there ???

    • Pete Murphy says:

      No further comment beyond my last one, since I’m not here to discuss investing.

  10. hungry4food says:

    Pete you can see the kinds of Policies that the Obama Administration is trying to transform to resembles this blueprint transformation here in this link at the top of the website page when it Opens up , its called

    AMERICA 2.0: Constitutional Politics

    http://www.warsocialism.com/America.htm

    • hungry4food says:

      Pete how do you think this will effect the way the Free markets function ??? AMERICA 2.0: Constitutional Politics

      http://www.warsocialism.com/America.htm

      • Pete Murphy says:

        There’s too much there for me to read in detail, but here’s a few comments:

        1. The statement is made that “capitalism can’t run backwards.” It’s not true. There are countries with declining populations (mostly in Europe) where capitalism is functioning quite well. Capitalism is all about making money and people will find ways to do it. Consider this: capitalism thrived very well in the past when our population was a fraction of its current level and at a time before oil was even discovered. There’s no reason to believe it can’t thrive in such an environment again.
        2. The approach advocated by the author is nothing more than communism – a takeover of the economy by the state. The author advocates the government eliminating businesses and supply the people with goods directly. But he never explains where those goods come from. Presumably, they must come from government-run enterprises. He says that capitalism is “horribly inefficient.” Can you imagine how inefficient things would be if the government ran everything? The collapse of communism has already proven that that approach is worse than capitalism.

        It’s true that capitalism and its drive for macroeconomic growth to stoke profit growth is part of the problem. But you don’t throw the baby out with the bath water. We still need capitalism, but with some additional constraints. In the first half of the 20th century, we found it necessary to establish boundaries regarding its abuse of labor. In the 2nd half of the century, we found it necessary to establish boundaries that prevent the exploitation and destruction of the environment. I believe that the next boundary that needs to be established should preclude capitalism’s reliance on and exploitation of population growth as a source of profit growth. That’s why I’ve proposed an amendment to the constitution that would establish such a boundary.

        Our economy is confronted with challenges that the framers of our constitution could never imagine in their wildest dreams, and our politicians don’t have the courage to confront them. The constitution needs updating to force Congress to deal with reality.

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