Econ Category #7: International Statistics

 

“Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers themselves”  

– Herbert Hoover

Howdy, gang!  Every now and then, I find a quote that makes a lot of sense said by someone other than Thomas Sowell.  I know…I know, it doesn’t happen very often (LOL), but when it does it certainly rings true just as much as if Sowell had said it himself!  By now, it’s pretty evident that I have a rather large amount of respect (aka, man-crush) for Thomas Sowell and by sharing some of his words of wisdom at the beginning of my blogs I’m hoping that the profound, yet simple truths he has said will strike a chord and resonate.  In my experience, true wisdom isn’t necessarily earth-shattering, nor is it something that hasn’t already existed as truth at some point in the past.  Wisdom…real, true wisdom…is cloaked in plainness and simplicity, which is the biggest reason I tend to gravitate towards the writings of Dr. Thomas Sowell.  If you are interested in reading any of Sowell’s books then let me be the first to say that your mind will be blown.  Figuratively, of course.  He has a knack for simplifying the rather convoluted nature of economics while still embracing a high level of intellect.  I know…I know…pleasure-reading a book about economics probably isn’t something that’s listed very high on your “to-d0 list”, but I do recommend it.  Just saying!

Well, we made it!  After six previous categories, we’re finally at the end.  This particular blog submission will officially be the last one in our series of economic categories.  Hopefully, you will have gleaned some value from the previous blogs in this series because I definitely feel like I have.  It’s always interesting to notice how much you learn when trying to help others learn!

This final category is the last one for a pretty obvious reason.  It’s not a category filled with information that you, as a trader, can’t live without!  The name of this final category is: INTERNATIONAL STATISTICS and the name kind of tells you all you need to know about the types of reports found therein.  Here’s a few that I can list:

• Industrial Production and Consumer Prices of Major Industrial Countries [quarterly]
• U.S. International Trade In Goods and Services [quarterly]
• U.S. International Transactions [quarterly]

I’ll be completely honest and admit that I can’t remember the last time I actively searched for data found in any of the above mentioned reports.  As a trader, I already have more than enough to keep my eyes on and the type of information found in the “US International Transactions” report doesn’t really help me increase any (noticeable) probability for success.  As an armchair economist, sure…I could see how the information of “trade” and “transactions” could keep me updated on the developments of our domestic/international economic policies, but I feel like I’m reaching a little bit.

I think I’ve said it before, but I’ll go ahead and say it again that I don’t believe the United States will ever get to an equal balance sheet with China (for example) in regards to net trade import/exports.  China has some significant economic problems that they will have to deal with at some point, but they still are the global leaders in producing cheap goods and we are still the global leaders in consuming cheap goods!  They need us; we need them.  I do think it’s extremely interesting to finally see our government tackle some of the nastier elements of foreign trade that we’ve been victim to for so many decades, but I can only see the results of such negotiations as being a win/win scenario for all countries involved.  I’m not referring to tariffs, by the way.  Personally speaking, I’m not a huge fan of tariffs and history has proven to be rather unkind in regards to the results of overreaching tariffs, but I also do not have ALL of the information at hand.  To be frank, none of us do.  It’s kind of easy to sit back and dish out opinions on economic trade policy, but the numbers elude us as private citizens.

It would be a folly for me to close this blog series without labeling the reports in this section as I have with the previous six.  All of the reports found in “International Statistics” are COINCIDENT and COUNTERCYCLICAL by nature.  When times are good people tend to spend more money on both domestic and imported goods.  The level of exports tends not to change much during the business cycle.  It’s during periods of economic unrest that we start seeing changes in consumer behavior, but I would contend that those changes are based on necessity and price rather than whether those goods are foreign or domestic.

I will likely attempt a quick review of the information I’ve provided in my next blog.  I know, there’s a ton of information to comb through, which is why I think a quick review is necessary.  Of the categories that I’ve listed, I will attempt to label the items that merit more attention than others and go from there.  In the meantime, it might be a decent idea to read through the previous blogs of Know Good Things and begin putting together your own macroeconomic analysis routine.

Be good.  Do good.  Know good.

Kleiny (@KnowGoodThings)

Columbus, Indiana