The jist is the next time you hear about record US trade deficits, take it with some skepticism. The fact is we don’t know if the trade deficit even exists at all. The US central bankers (Alan Greenspan and his successor) are very unsatisfied with the quality of the official economic data and they they believe the statistics leave a great deal out and are actively misleading. A quote: “What if we told you that businesses are investing about $1 trillion a year more than the official numbers show? Or that the savings rate, far from being negative, is actually positive? Or, for that matter, that our deficit with the rest of the world is much smaller than advertised, and that gross domestic product may be growing faster than the latest gloomy numbers show? You’d be pretty surprised, wouldn’t you?”

A trillion is a helluva undercount, even in an $11 trillion economy. And we’re not just talking about missing GDP but missing investment. A trillion dollars in missing investment would push the US investment rate from 18% of GDP up to 25% of GDP.

An example BW gives is the Apple Ipod. Apple invested something like 800 million in product development last year – which went completely uncounted in GDP and investment statistics. The Ipod is physically manufactured in China, so the Ipod is counted once when it arrives from China and once when it is sold, and Apple is effectively no more than a reseller of imported goods.

Economic statistics ignored computer software until 1999 when the US companies were spending 150 billion a year on software at the time and yet that number is uncounted. Weird world we live in.

There are more mohammad cartoons, ex-muslims talk about leaving there religion. Some real interesting stories.

On the site there is a picture of a woman wrapped in a sheet and buried to her waist in sand. Than they stoned her to death. It was really sick.

Folks, we are severely out of balance, and there are going to be consequences. There is no simple solution to this problem; we can’t just pass a law to stop buying the foreign stuff. We’ve got to work with the system, lest the cure be worse than the disease. But the problem must be acknowledged.

http://www.spectator.co.uk/article.php?id=7316&issue=2006-02-11

The article stretches across 4 computer pages–be sure to read the whole thing. Dalrymple usually doesn’t mince words in his writings, which is refreshing these days, especially in very politically-correct Britain.