Kiplinger Connection
The Economy • New Tech • Autos

The Economy: Good news and bad on a stronger dollar.
New Tech: Good, sustainable products from NASA and DoD.
Autos: Lower dependence on foreign oil may mean more on foreign batteries.

The Economy
Exports will bolster U.S. GDP growth through 2009, but not by much. A nearly two percentage point boost in second quarter GDP from foreign sales won’t be repeated as a weak global economy diminishes demand for U.S. products. Key trading partners ... Japan, Canada, and the U.K...are on the verge of recession.
The greenback’s 9% rally vs. the euro since April will temper exports, too, though currency adjustments lag and the full impact won’t be felt before 2010.

The dollar’s strength will push energy prices down further. That’s because oil transactions are dollar denominated. Gasoline prices are down 7% in Aug., double the drop expected as a result of the usual late summer slowdown. However, cheaper gas won’t have much effect on the Consumer Price Index, which is seasonally adjusted. It’ll shave just a quarter-point off the next increase.
Some signs that the food price surge will slow: Retail prices will rise 4%-5% next year, after a 6%-7% jump this year. Price drivers ... supply scares and high prices for crops ... are easing. A record world wheat crop is being harvested, and the weather has been good in the U.S., bringing more feed grains and soybeans than expected. Prices of corn and soymeal, the leading feed sources, have fallen 20% since July 1.

A half-point increase in 30-year fixed mortgages is discouraging buyers, despite double-digit declines in housing prices in most major U.S. markets this year. Loan rates should be falling, but instead they’ve risen to 6.5% since June over fears about how much it will cost to get Fannie Mae and Freddie Mac back on solid footing. Until confidence is restored ... which may require Treasury to reluctantly funnel cash to the mortgage giants ... home sales will be sluggish, holding the economy back.

New Tech
NASA and Defense Dept. technology keeps fueling commercial innovations:
Three-dimensional radar that pinpoints lightning strikes. From an Ariz. firm now owned by Finland’s Vaisala, it could increase the safety of airlines and others.
A noncorrosive, biodegradable anti-icing fluid that stays where it’s put, so it’s more effective in rain or sleet. From Midwest Industrial Supply in Ohio.
A clean burning, low-emission engine with plasma-based interior coatings and a piston free design. It runs on gasoline, diesel or natural gas, and can be used for small boats and perhaps hybrid cars one day. From Moller International in Calif.
A long-lasting biodegradable spray-on lubricant originally developed for use on space shuttle platform winches. From X-1R Corp. in Daytona Beach, Fla.
Superlightweight foam originally designed to suppress fires in rocket engines. Makes a great thermal and acoustic insulation. From Inspec Foams in Plano, Tex.
A superdurable metal polish and protectant. The titanium-based solution from Ohio’s Moen makes plumbing fixtures highly resistant to salt and humidity.

Autos
U.S. businesses are losing the race to make rechargeable auto batteries, the kind that will be in great demand when plug-in hybrid cars take off. Chinese and Japanese firms are rapidly locking up the market for rechargeables, which will let most Americans commute to work without using an ounce of gasoline. The upshot: A switch from depending on foreign oil to depending on foreign batteries.