Oil price and dollar plunge as American growth stalls

[hedgetrimmer]

~snip~

· Wall Street urges Fed to hold off from rate rise
· Economy was boosted by spending after Katrina

Larry Elliott, economics editor
Saturday July 29, 2006
The Guardian


Oil prices plunged and the dollar fell sharply last night amid fears that the US economy is buckling under the weight of rising interest rates and the threefold increase in oil prices.

Wall Street was urging the Federal Reserve to hold back from an expected rise in interest rates next month after the commerce department in Washington reported that the growth rate in the world's biggest economy more than halved in the second quarter of 2006.

Evidence of a marked slowdown in the housing market - the mainstay of the economy in recent years - and an end to the government spending spree to rebuild the southern states devastated by Hurricane Katrina meant the economy was expanding at an annual rate of 2.5% in the three months to June. In the first quarter, growth was an annualised 5.6%.

Growth in the first three months of the year was inflated by the billions spent by Washington on repairing the damage caused by the hurricane that left New Orleans under water last August, but non- military federal spending fell at an annual rate of 8% in the second quarter, wiping out the first quarter's gain.


more... http://www.guardian.co.uk/usa/story/0,,1832923,00.html

[humbled_opinion]

1. So much for the booming economy n/t

[BootinUp]

2. Must be the liberals fault.

:sarcasm:

[jayfish]

3. Wow, Nice To Know They Can Manipulate Oil Prices At Will.

They must think they are done gouging us.

Jay

[no_hypocrisy]

4. Isn't that a vain request, like asking Katrina to wait a couple of days

before hitting New Orleans (gonna happen anyway)?

[raccoon]

5. "Economy was boosted by spending after Katrina "

Well, yall, let's just pray for another horrific hurricane to boost the economy again. :sarcasm:

[Barrett808]

6. The Bastiat Broken Window fallacy:

Parable of the broken window
http://en.wikipedia.org/wiki/Parable_of_the_broken_window

[raccoon]

12. I'd never heard of that. Thanks for posting. nt

[TheWatcher]

13. And after all that "spending" it does not appear that New Orleans

has a lot to show for it, unfortunately.

Whatever they spent it on, it sure as hell hasn't helped the Gulf Coast that much.

[cliss]

7. Ok.....here comes the accountant.

The definition of bankruptcy is your debts are greater than your assets. According to my calculations, the US is bankrupt.

Do we have some assets? Yes, we do.....we could start cutting down every damn tree we have, start leveling out mountaintops and yank out whatever assets are there like coal....uranium....silver etc etc.

You don't have a Fire Sale on a country every day....especially the World's Heavyweight Former Hegemon. Besides, it would take a while to cut down all the trees.

So I would say the rest of the world will have to wait a while.....but we're still broke.

[progressivebydesign]

8. That's what happens when Greed meets Stupidity in the White House. n/t

[NickB79]

9. Oil fell to the shockingly low price of $73.50

Wow, now that's cheap! :sarcasm:

I would hardly call that a plunge. It's still $3/gallon, and China will just gobble up whatever the US doesn't take.

[Javaman]

14. Wow, a regular free falll...

:sarcasm:

[daleo]

10. Blowing hundreds of billions per year on war and invasion doesn't help

Eisenhower understood this point.

[Robbien]

11. Plus giving Paris Hilton a $91M tax cut bonus doesn't help

Between the tax cuts and marmongering, all of our natural resources have been mortgaged to the hilt.