U.S. Economic Growth In The Third Quarter Attributed To Hurricane Irene Spending

More Artificial Growth

President Obama at the Hurricane Center

This week, U.S. stocks rallied on news the U.S. economy grew 2.5% based on American consumer spending. However, a sobering report has since been released, stating the unexpected growth in the third quarter does not mean the economy has recovered, as it was due to spending by consumers trying to repair their homes and businesses after the damaging hurricane, Irene, battered the East Coast of the United States.

Therefore, the government should not relax and deem the economy has turned the corner, as many indicators suggest it has not. Irene created tens of billions of dollars in damage, battered the insurance companies and reduced productivity in the nation. The 2.5% appears to be from people attempting to rebuild their lives, having to repurchase items and on a scale they normally would not, to replace what the hurricane destroyed.

American unemployment is still stubbornly high and that is a massive problem the government has not corrected for almost 3-years. For the nation to truly recover, unemployment must significantly decrease. U.S. exports are also another problem, as they are nowhere near their potential.

The government during the tenures of President Bush and President Obama, did not make manufacturing goods their focus, but spent an enormous amount of time on risky financial instruments, some of which were unmasked as ponzi schemes and other types of flat-out fraud. The problems have been compounded by corporations hoarding stimulus money.

STORY SOURCE

Savings rate falls as spending outpaces income gains

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Artificial Growth

Artificial Growth - Part 2

Obama To China: Change Value Of Your Currency

Chinese President Hu Jintao

China has balked at request from U.S. President Barack Obama, to change the value of their currency, due to the financial crisis in America and the worsening national economy.

It was not appropriate that he made such a request. If another nation's government made a similar request to the White House, it would be rebuffed and scoffed at, as it is asking another country to damage their economy, in favor of another one.

What Mr. Obama needs to do is raise his game and not ask others to take a step down. As the site has stated for many months, the U.S. government needs to focus on rebuilding the U.S. economy and return to the days when America was a key exporter in the world.

China digs in heels on yuan as U.S. raises pressure

Tue, Mar 16 2010 - (Reuters) - China said on Wednesday it "could not be any clearer" in its repeated commitment to a stable exchange rate after the U.S. Congress threatened to levy duties on some Chinese exports unless it revalues its currency.

The temperature in the long-running dispute over China's exchange rate regime is rising quickly, with a bipartisan bill introduced on Tuesday in the U.S. Senate that aims to get Beijing to let the yuan rise.

Focusing on the yuan will not help to solve problems in the Sino-U.S. bilateral trade relationship, a Chinese Commerce Ministry official told Reuters.

"We oppose the over-emphasis on the yuan's exchange rate," the official said, when asked about the bill. "The yuan's exchange rate is not a magic potion for solving global economic imbalances." ...

http://www.reuters.com