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Old 04-27-2020, 10:06 PM
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Originally Posted by Dd714 View Post
I know you are the OP which is why I am so surprised...there are some good comments on China here, why did you create this thread and then asking about the US? There is an economics forum if you so wish and you will probably get the same results below...
But OK, I'll take the bait, I think I know the unfortunate direction this is going to take, but let me summarize y/e 2019:
  • GDP growing 2-3% a year
  • Unemployment at 50 year low, at 3.5% (other employment metrics, i.e. involuntary part time workers, also at historic low rates.
  • Labor Force Participation, athough not at all time high, was strong (greatest increase incidentally was in health care workers, not exactly entry level workers). Job opening rates at almost 5%, with the hire rate a full percentage below...i.e. companies were struggling to find employees.
  • Average wage (household income) increased from $62,626 to $63,179 in the year.
  • Percentage earning under poverty level decreasing (12.3% to 11.8%) in the year.
  • The net worth of American households grew 58% from the recession low of $68 trillion ($577,000 per household) in the first quarter of 2009, to $107 trillion ($881,000 per household) in the second quarter of 2019, inflation-adjusted
  • Stock Market - obvious...historic highs
  • Corporate profits at near historic highs at 9.5%(I know to some, strangely, that's a bad thing).
The above represents one of the longest periods of prosperity in US history. Was a downturn likely regardless of COVID19? Probably, these things are cyclical. Did everyone benefit from the boom economy? Of course not, that would be impossible, there are winners and losers in each economy. What's important is there were more winners than losers, as the metrics show. Metrics can lie sure, but the difference is these metrics don't change...they are apples to apples comparisons to previous periods. None of this "but I just created this metric and it shows this....".

I asked about the US so I could do a comparison and get a picture of what might be headed our way, since China is 2 months ahead of where we are. you are the one that said the US was doing "great" before the virus.

-GDP was flatlining or declining.
-unemployment numbers are not accurately accounting for the underemployed and those who stopped looking. we have a larger gig and part time economy now so hours worked, which is what matters, were lower. trump called the job numbers fake when he was campaigning for president and they are just as fake now that he is in office.
-great, household income not even keeping up with inflation, which by the way is also intentionally manipulated to make things seem rosier.
-household net worth grew because housing and stocks were in a bubble. and hello? stock buybacks?
-corporate profits were declining, not rising. and tax cuts helped to get them where they were

explain why auto sales declined, PMI declined, commodity prices declined, consumer sentiment declined.
did you completely ignore huge liquidity issues and the repo markets?

if the economy is doing so well, why do we have record levels of debt in corporate, federal, local, personal, auto sectors?
why did our deficit increase in times of economic prosperity when it should be doing the opposite?
why did the markets take a nose dive when the fed tried to increase rates? why did they cut rate 3 times in 2019?
why are countries dumping US treasuries?
talk to me about the the yield curve inversion. why does the inversion predict 100% of the time?

Interest rates, not sure I understand your question and again I have to question if I have to explain economics 101 to you. Everyone should want low interest rates, it's not a "party" issue, except when the economy overheats, thus creating inflation. Interest rates are a fed tool, an independent quasi-government agency. Low rates are good in that they promote borrowing and further growth. Inflation has remained low, so low rates are good except for maybe those dealing in bonds. Hey, maybe the guys in the economics forum can help you out with any questions you have.
as I said before, inflation numbers (CPI) have been manipulated. and we have had inflation - it just all went to investment assets like real estate and stock markets.

low interest rates are good only to allow people to borrow money on the cheap. it inflates bubbles. it allows people to spend beyond their means. we have been borrowing from our future to fund our lavish lifestyles for decades, making it seem like we've had prosperity and growth. everything has been debt fueled.

but then again, what do I know. i'm just an IT guy.
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