Slow Growth

Let Us Praise Slow Growers
By DANIEL GROSS
Published: April 17, 2005
http://www.nytimes.com/2005/04/17/business/yourmoney/17view.html

The Article basically states that the slow growth of Japan and the EU suppress both Interest rates and Inflationary pressures on Commodity pricing. It reflects the current thought of most Economists, but may take a greater depth of perception to understand the situation. Some relevant excerpts:

Two-way trade between the United States and European Union members was $41.1 billion in February, second only to Canada. Trade with Japan was $15 billion, compared with $19 billion for China.
Exports of goods and services fell from 11.2 percent of gross domestic product in 2000 to 10.3 percent in 2004.

Numbers do count, even if they are this Author's Guess-estimates. We have a Trade Deficit in excess of $60bn per month. American Harbor facilities would have to be expanded by at least Thirty percent to accommodate such an amount of additional Product. There is not only a lack of Harbor infrastructure, but lack of physical space for such Plant. Economic supply also brings some disbelief in creditability of Economic thought and Presidential position.

World Oil Suppliers probably have about 5-8m barrels per day accessible capacity in the Short-run. The EU growth rate is projected as 1.6% for the current Year, with Japan projected current growth rate is 0.8% per year. The EU would require a minimum of an additional 6m barrels/Day of Oil to equal the growth rate of the United States(projected at 3.6%). Japan would need almost 4m more barrels per Day to match the U. S. growth rate. The extra Oil would be exceedingly expensive(much better than $100/pb), if it could be produced.

Japan imports almost all commodity elements for its Production. Their Supply of advanced Product relies almost exclusively of value-added marginal Profits. Japan business could not stay in operation paying extreme Prices for Production resources. Welfare Costs in the EU would triple under the onslaught of Finished Product price increases. They, or Us either, cannot be looking for sudden growth increase in their Economies. A Bush administration reliance on higher Exports to the World to correct the Current Accounts Deficit and the Trade Deficit seems irrational, if not outright foolhardy; these imbalances will not be self-correcting by Market forces. lgl