U.S. Trade Gap Widens on Oil Imports

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(email exchange)

>   On Tue, May 12, 2009 at 9:20 AM, wrote:
>   As you predicted….

You mean as I feared!

Higher oil = dollars easier to get overseas = weak dollar all else equal (which it never is, of course)

Higher crude = higher headline CPI = higher government and private CPI adjusted payments

And I suspect higher fuel prices will mean higher government transfers to ‘help Americans afford to heat their homes etc.’ which is not a ‘bad thing’ but does serve to drive up prices that much further.

Creating more spending power does not create more fuel (at least in the medium term) – only higher prices.

The world’s newly forming higher income individuals are back to outbidding our lower income individuals for fuel. With food following close behind as biofuels continue to link the two.

WSJ NEWS ALERT: U.S. Trade Gap Widens to $27.58 Billion on Oil Imports

by Jeff Bater

May 12 (WSJ) — The U.S. trade deficit widened for the first time in eight months during March, as the price and use of imported oil both climbed. The U.S. deficit in international trade of goods and services increased to $27.58 billion from February’s revised $26.13 billion, the Commerce Department said Tuesday. Originally, the February deficit was estimated at $25.97 billion.

U.S. exports in March slipped by 2.4% to $123.62 billion from $126.63 billion as trading partners bought fewer consumer goods and cars from the U.S. Imports fell at a lower rate, dropping 1% to $151.20 billion from February’s $152.76 billion.


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