China Is Said to Resume Shipping Rare Earth Minerals

The Chinese will begin shipping the rare earth metals that have gained so much media attention.
A major problem is that China supplies 95% of the world's rare earth metals. These are crucial in making high tech products.
Another problem is that these minerals are now being affected by China's export quotas . The price and the demand are now much higher than the levels they were a few years ago.
The export quotas and extra price have also encouraged many companies to simply move production inside China - another goal of the Chinese government.
Considering the U.S. economy is barely floating on our production and service with high tech products, we cannot afford to cut off China.

Jobless Claims in U.S. Unexpectedly Drop To Three-Month Low

Claims for jobless benefits unexpectedly dropped last week to a three-month low, a sign the U.S. labor market may be starting to mend.

Initial jobless claims decreased by 21,000 to 434,000 in the week ended Oct. 23, the lowest since early July when fewer auto plants than normal closed for retooling, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance dropped to a two-year low, while those getting extended payments also fell.

Consumer spending, which accounts for about 70 percent of the economy, is beginning to stir and may give employers reason to add workers ahead of the holiday shopping season. Fewer firings are an initial step toward more hiring as companies such as Ford Motor Co. see sales improve.

More China Problems

Everyone knows that we import a lot of manufactured goods from China. However, a lesser known importing problems from China has been plaguing the defense industries of the developed nations.

"Rare earth metals are scarce minerals that have particular properties, such as being magnetic or shining in low light.

This makes them particularly useful in some new technologies, such as solar panels or electric cars or light-weight batteries.

German companies have lobbied the government to say that they are now finding it hard to get hold of these essential minerals, because China produces virtually all of them.

German economy minister Rainer Bruederle said his country was being severely affected.

The concerns about a monopoly are now being echoed in Washington, where the Department of Energy has said firms are worried about shortages. One talked of a "supply crunch"."

Resource wars on the horizon?

Orange Growers Fall Victim to Property Bust

Floridian orange growers have been hit doubly hard by this recession in recent months. Not only have farmers been forced to foreclose on their farms due to the economic effects on people's spending habits but additionally, those who have made it this far without losing their farms are now being hit hard by a tiny enemy. Abandoned lots have become a breeding ground for a plague that is killing thousands of the state's orange trees.

A type of tiny lice known as the Asian citrus psyllid has made its home in the orchards, spreading a disease known as citrus greening, or yellow dragon disease, which causes trees to produce shriveled, bitter oranges before killing them. Since being spotted in 2005, the disease has spread to all parts of the state. And with no known cure, citrus greening is threatening to cripple a $9 billion-a-year industry that supplies 90% of U.S. orange juice.

This is just a curious byproduct of the recession that I don't think many would immediately draw the connection with between the economy and diseased oranges in Florida....

Bond Investors Fight The Fed

There has been a recent increase in bond selling. Experts believe that we should wait before selling the bonds because the Fed will likely buy them to keep rates low. However, several reports indicate that the Fed may not purchase as many bonds as we expect them to. This, in turn, could lead to a fall in long term rates and a rise in the purchase of long-term Treasury bonds.

Capital Goods Orders Decrease

Orders for capital goods fell in September, meaning there is a slowdown in U.S. business investment which now gives the Federal Reserve more reason to ease policy next week. Non-military orders for equipment like computers and machinery meant to last at least three years and excluding airplanes dropped by .6 percent after a 4.8 percent gain in August. Another report showed sales of new houses hovered near a record low last month. An economist at Nomura Securities International Inc. says that areas in the economy that were quite hot, like capital spending, have begun to cool and areas that were cold, like housing, have been stabilizing, and the economy is not growing fast enough for the Fed’s liking.

How Higher Taxes Will Impact Your Small Business

Beginning in January, small businesses will be facing higher taxes. This along with government mandated healthcare will make the struggle to survive as a business harder. Also, the IRS is implementing new policies in order to better watch small businesses to ensure income does not go unreported. A small business owner commented that the government shouldn't be concerned with creating jobs but with creating an economic situation in which businesses can create more jobs.
I agree that the government should be more concerned with repairing the economic situation but I do not agree that nothing is being done correctly.

The lesson for China: Power means responsibility

China has always manipulated its currency for economic gain and has always had a strong focus on 'hard work' to eventually make itself a major powerful, prestigious economic state. And now that it has finally achieved its goal, the world is looking for a better behavior from Beijing. However, Chinese leadership does not seem to be playing by the rules because it is using its financial growth and economic muscle to further its political gains. Although the WTO (of which China is a member) does not allow its members to use economic power for political means, it did not stop China from threatening to stop flow of rare earth minerals to Japan unless they released the fishing boat captain.
In my opinion, the Chinese seem to be focusing on gaining political power through economic strength and have managed to do so. This has always been their focus but now that they are one of the pillars of the global economy, the world expects them to start playing by the rules.

India’s Currency Attracts Investors, but Damages Exports

India's exports are down as their economy boosts their local consumption and attracts more foreign investment. India is so hungry for foreign investment that they are OK with letting exports decline (although only the cheaper exports like textile, not the higher end ones like services, technology, and pharmaceuticals). This increase has helped the stock market and the government hopes that increase sales from stock prices will help lower their huge deficit.
Therefore, the rupee is rising rapidly - up 9% in the last 16 months. This could pose a problem in the long run as inflation could overheat the market. Many analysts worry that with other countries protecting their currency, maybe India should do the same.

Obama and the Recovery

When Obama ended up being the one in office, the top priority was to provide aid to states and have tax cuts; but that has not been a priority since the recovery has seemed to have stalled.

From November of last year — the month whose job report brought cheer to the White House — to May, the economy added almost one million jobs, thanks partly to census hiring. Since May, almost 400,000 jobs have disappeared. This will come into play when the democrats fall during next weeks elections. Since the health care bill passed, Obama has fallen and is now looking weak.

The problems began with the original stimulus, passed in February 2009. Centrist senators, whose votes were needed, opposed the kind of huge, $1 trillion-plus program that now seems as if it would have been best. But even within those confines, the ultimate $787 billion bill was flawed. Some $70 billion of it went to a tax cut that Congress would surely have passed anyway.

Recoveries from fiancial crises is slow and long, stimulus spending was also slow and many other factors has led to a weak recovery. Obama and many others have realized that recovery will take longer than expected.