Kabir's Econ Blog

November 14, 2009

Trade gap widens sharply in September

Filed under: Uncategorized — kabir1892 @ 10:06 am

deficit

The US trade deficit widened sharply in September due to the lack of global activity since the financial crisis hit in fall of 2008.

The US trade deficit expanded 18.2% in September. The one-month worsening in the deficit is the largest since February 1999. Since January, this is considered as the largest trade gap. Imports have risen up to 5.8%, which is the largest percent increased in imports since February 1993.

Exports rose as well  in September, up to 2.9%. This is the fifth consecutive monthly gain in exports.

Global trade activity sopped last fall since the financial crisis turned the global recession the worst its been since World War II. Companies selling their products found no buyers and were unable to obtain the credit that was necessary in keeping products flowing.

Due to this, the US trade deficit was cut in half as it reached $60 billion in the summer of 2008. In May, it reached $26.4 billion which is considered the lowest level since November 1999.

However, now that we are on the path to recovery, economists are watching the pace of the decline in the deficit carefully.

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November 11, 2009

Three Big Ideas About Exchange Rates

Filed under: Uncategorized — kabir1892 @ 2:35 am

Advantages-Of-Nominal-And-Real-Exchange-Rates

There are things that I found to be the main ideas of exchange rates.

1) Fixed exchange rates: this exchange rate occurs when one currency is fixed in value against another currency. Governments are involved to keep the parity via intervention on the market for currencies. There are positive aspects as well as negative ones. This is because they give certainty, but they can also cause large sums of foreign exchange from national reserves.

2) Floating exchange rates: In this exchange rate, market forces determine rates depending on  how they view a certain country’s performance in trade and the economic stability. The maintenance of these systems cost less, but they can result in changes in the value of the currency. Trade performance and confidence is affected.

3) Managed or dirty float exchange rate: This is similar to floating exchange rates, except that it is determined between upper and lower limits where the domestic governments decide to keep it. This causes stability, but the negative aspect is that there is less cost for national reserves.

November 2, 2009

Photo: Chinese queue up for iPhones

Filed under: Uncategorized — kabir1892 @ 5:46 am

iphone-china-unicom-11

The iPhone has set out to make a debut in China. Hundreds line-up in Beijing to buy the new Apple smart phone despite the fact that the prices are high and a lack of Wi-Fi. The first sale was at 6:30 pm.

Although China is the largest cellphone market in the world, over 700 million subscribers might have trouble attracting buyers due to the deal that it made with Apple. Because of the restrictions imposed by the Chinese government, the iPhones that are being sold soon will not have Wi-Fi.

Without a service plan, it costs between 5,000 yuan to 7,000 yuan. for a 32 GB iPhone 3GS. Street merchants that are changing for an unlocked gray-market 32 gig iPhone 3GS with Wi-Fi are paying 5,700 yuan. This means that they are paying 20% more. When purchased with a long-term service contract, the China Unicom’s iPhones are overall cheaper.

On Friday, the China Unicom officials announced that there are over a million iPhone 3G subscribers.

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