Doin' the BOP
In the period 2000-2006 we imported more goods and services into the US than we exported to the rest of the world. In fancy terms we had a negative BOP (balance of payments). Here it is by year:
It has grown worse every year since 2001.
Over the 2000-2006 period we sold other countries $6.9T (as in Trillion) in goods and services and bought $10.3T from them. That's to saw that we bought $3.4T more than we sold. With all the zeros in place, that number is
It's certainly a BIG number, but is it a BAD number? Well, in the 40 year period between 1960 and 1999, the total of of balance of payments comes to only -$2.0T. So, yes, it's both BIG and BAD.
In fact, the BOP over the 2000-2006 period comes to just over -$11,000 for every person in the United States.
What could possess us to buy $3.4T more than we sold between 2000 and 2006? Well, we can thank crude oil for $0.9T of the deficit. The China BOP was -$1.0T for you-name-it. The Japan BOP was -0.5T. Mexico -$0.3T. Canada -$0.4T. Yadda, yadda, yadda.
And, of course, there is that pesky problem of the weakness of the dollar. Things we buy over there (like crude oil) cost more and more.
But, wait, isn't a weak dollar suppose to help with exports? Well, yes, they did but by not enough to offset the imports ... by a difference of -$3.4T.
And just what are all those oil sheiks, Chinese manufacturers, Canadian lumbermen, etc. doing with all those $3.4T excess dollars. Buying gold. Buying US companies. Buying US real estate.
And, where is that $3.4T coming from? Remember that coffee can out there in your back yard? Yup.
It has grown worse every year since 2001.Over the 2000-2006 period we sold other countries $6.9T (as in Trillion) in goods and services and bought $10.3T from them. That's to saw that we bought $3.4T more than we sold. With all the zeros in place, that number is
$3,400,000,000,000
It's certainly a BIG number, but is it a BAD number? Well, in the 40 year period between 1960 and 1999, the total of of balance of payments comes to only -$2.0T. So, yes, it's both BIG and BAD.
In fact, the BOP over the 2000-2006 period comes to just over -$11,000 for every person in the United States.
What could possess us to buy $3.4T more than we sold between 2000 and 2006? Well, we can thank crude oil for $0.9T of the deficit. The China BOP was -$1.0T for you-name-it. The Japan BOP was -0.5T. Mexico -$0.3T. Canada -$0.4T. Yadda, yadda, yadda.
And, of course, there is that pesky problem of the weakness of the dollar. Things we buy over there (like crude oil) cost more and more.
But, wait, isn't a weak dollar suppose to help with exports? Well, yes, they did but by not enough to offset the imports ... by a difference of -$3.4T.
And just what are all those oil sheiks, Chinese manufacturers, Canadian lumbermen, etc. doing with all those $3.4T excess dollars. Buying gold. Buying US companies. Buying US real estate.
And, where is that $3.4T coming from? Remember that coffee can out there in your back yard? Yup.
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