Saturday, August 16, 2008

Our horrible economy

You wouldn't know it by reading the USA press .... but you know all that "recession" talk? How terrible the USA economy is compared to, well, everything but herpes? Ahem.
The dollar surged to a two-year high against the pound and a six-month peak against the euro on Friday, as fears about spreading economic gloom triggered a sell-off in commodities.

Against sterling, the US currency notched up its 11th consecutive day of gains – its longest uninterrupted rise in more than 35 years – as markets became increasingly convinced that the US was best-placed to weather the global downturn.

The long-running surge in commodities and resulting inflationary pressures had been a main factor in slowing global economic activity – playing a bigger role than global financial turmoil, for instance, in the eurozone. The eurozone economy shrank in the second quarter for the first time since the launch of the euro in 1999, while Japan’s economy contracted 0.6 per cent, its worst performance for seven years. The US staged at least a modest recovery in the same period.
The USA has not had a contraction in GDP since the last recession. Not one - and it takes three quarters to call one. Considering the housing headwind - that is something to be proud of. ..... and about that trade deficit ....

We just can't have good economic news, can we? Well, you have it here.
UPDATE: If you need a very well written "Good vs. Bad" about the strengthening Dollar, Irwin Stelzer at The Weekly Standard does a fine job.

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