Growth Pace of Economy Slowed in 1st Quarter
By THE ASSOCIATED PRESS Published: April 28, 2005
Summation: The First Quarter had an estimated economic growth rate of 3.1% instead of 3.5% as predicted by Economists(this Author estimates this will be revised down to 2.7%, due to the heavy activity in Inventories and Oil stockpiling). The Inflation gauge tied to the Report said prices rose at a rate of 2.2% in the First Quarter--minus Food and Fuel(real Qualifier: Fuel cannot be excluded from the qauge if the higher Oil prices extend over two Quarters, and Food must be included if there is significant year on year advance overall). Consumer spending slowed at 0.7% Quarter on Quarter, suggesting actual decline in the face of the Inflation gauge--including Food and Fuel. Business investment was also down to only slightly better than one-third the pace of the previous Quarter.
Steep Weekly Rise in U.S. Oil Supply Cuts Price 4.8%
By JAD MOUAWAD Published: April 28, 2005
Crude oil imports reached 10.86 million barrels a day last week, the third-highest average on record, according to the Energy Department. And gasoline imports exceeded a million barrels a day for the third consecutive week.
The Second Quarter economic growth shows little likelihood of better numbers than has the First Quarter. Inventories are building, but so is Inflation. The Economy added only 110,000 New Jobs in March--very low, especially with new Unemployment Claims rising to 320,000. Fuel prices will adversely affect at least until well into the Third Quarter. The Trade deficit is eating up GDP at a 1.4% rate. It is time for 'Shock Therapy'. This Author will give his recommendation, then explain it.
Recommendation: Presidential Order limiting Gasoline importation to 800,000 barrels per day. All Gasoline importation requiring an Importation permit.
Such an Presidential Order would curb both Consumer use of Gasoline through higher Pump prices, and curb other Sector inflation better than a 1% rise in the Fed Interest rates. The Pump price should not exceed $3/gallon, and Consumption should decrease by greater amount than the current importation cut. There would be both pressure and funding to increase Refining capacity in this Country. It only sounds crazy! lgl