Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
the entire thing can come to a
screaming halt this morning.
vote
stop spending
That would result in a serious recession.
But, we need it to purge the excess. To get off heroin, you need to go through the withdrawal symptoms. To pump more "liquidity" (heroin) into the system risks ODing the economy. But, Bernanke is an academian who's studied the GD and thinks he knows how to avoid deflation caused by the resulting credit implosion. Unfortunately, high deflation is unstable and eventually the extra printing to fund public programs to the masses results in high or hyperinflation, as in the early to late 30's.
But people live a relatively cushy lifestyle, or have until a few months ago with their fantasy home equity, and don't want a recession (i.e. the withdrawal symptoms are unbearable to them). Wall St talking heads also make up delusional stories stating that the end of borrowing to consume implies the end of capitalism.
The U.S. is not the only country having or facing problems.
Russia has a declining population; it is in fact being depopulated. The few expatriates moving there do not make up for the huge death rate--especially among men. Alcoholism is high and there's next to not infrastructure. Add to that the fact that Putin, while no longer "in charge" is a Communist and add to that the fact that Russia has ALWAYS been unstable with its history of murdering its own civilians and you can see that it is not on sound footing. Yes, it's getting billions in revenue from extractive industries, but that does not make for a sound economy, even with the volatility of oil.
China is facing problems in that it has hundreds of millions of people pouring into the cities and does not have enough jobs. Just yesterday an article spoke of jobs leaving China for Vietnam and Indonesia. This will continue to happen as the yuan increases in value making exports more expensive. You also have the problem with filthy cities full of polluted air and rancid water and unreliable power. Place onto that China's forced one child per familiy policy where baby girls are aborted thereby skewing the population metrics and you're looking at hundreds of millions of men who won't be able to marry or possibly have jobs. Can you say "disaster"?
I could go on and on. The fact is that every nation is facing severe problems from Britain to Italy to Australia to India. We're all in this together. Whatever happens to one of us affects all of us.
The U.S. is not the only country having or facing problems.
Russia has a declining population; it is in fact being depopulated. The few expatriates moving there do not make up for the huge death rate--especially among men. Alcoholism is high and there's next to not infrastructure. Add to that the fact that Putin, while no longer "in charge" is a Communist and add to that the fact that Russia has ALWAYS been unstable with its history of murdering its own civilians and you can see that it is not on sound footing. Yes, it's getting billions in revenue from extractive industries, but that does not make for a sound economy, even with the volatility of oil.
China is facing problems in that it has hundreds of millions of people pouring into the cities and does not have enough jobs. Just yesterday an article spoke of jobs leaving China for Vietnam and Indonesia. This will continue to happen as the yuan increases in value making exports more expensive. You also have the problem with filthy cities full of polluted air and rancid water and unreliable power. Place onto that China's forced one child per familiy policy where baby girls are aborted thereby skewing the population metrics and you're looking at hundreds of millions of men who won't be able to marry or possibly have jobs. Can you say "disaster"?
I could go on and on. The fact is that every nation is facing severe problems from Britain to Italy to Australia to India. We're all in this together. Whatever happens to one of us affects all of us.
China will consume the oil we can longer purchase, at a cheaper price relative to their purchasing power (after decoupling from dollar). This will help offset any increase in cost of exports. Their new ports of call: Sydney, Mumbai, Brisbane will be the new recipients of cheap consumer goods. They will require plenty of raw materials Australia will be happy to provide in trade, as well as copious quantity of New Zealand agricultural commodities available for export to feed their population.
By no means am I an apologist for China. I just find the "we sneeze they catch cold" catchphrase very funny, considering that the decoupling process takes time, and perhaps it's not in China's best interest to decouple for a few months or a year? After all, their inflation problems are very very recent so they have to absorb this and evaluate the pros/cons of no longer doing business with Americans.
Fed has been responsible for and instead demonize the market and greed
Thinking the Fed has been responsible for the bubbles...is well short sighted. Bubbles have happened ever since capitalist systems have. One could make an argument that the Fed created the necessary "shock" to start the housing bubble, but to say its responsible is a bit..hmm...silly.
Quote:
evaluate the pros/cons of no longer doing business with Americans.
This is funny. I think people forget that China largely adds very little value to the products they make. The vast majority of research and even complex manufacturing (compact memory, LCD, micro-chips) are made else where. For example, although iPods are made in China only a few dollars of value is added there. It seems China was hoping to use the same model that Japan used, do heavy low value manufacturing and then move on to work that adds more value.
But they seem to be having trouble moving on, I think it has a lot do with their lack of open government. Anyhow, without America China would not have computers (they do not make the components in a Computer and they won't be able to for many years) among other things.
On the other hand, America could fairly easily find another country willing to destroy its environment and disease its people for a cheap buck.
Thinking the Fed has been responsible for the bubbles...is well short sighted. Bubbles have happened ever since capitalist systems have. One could make an argument that the Fed created the necessary "shock" to start the housing bubble, but to say its responsible is a bit..hmm...silly.
Meh. We never had a serious depression until the Fed took charge. Inflation wasn't a word associated with money, except during the civil war, throughout our nation's history until a Fed took charge. Now it's perfectly acceptable and tolerated to believe that a dollar today is worth less tomorrow.
IMO, the Fed spiked the punch bowl, but Wall St. served it up. It all depends on your perspective.
"It was different then" is a common fallacy with no backing, but always sounds good when pundits use it to argue against a Fed on Fox Business and CNBC.
I believe that the FED has to go and the monetary system stabilized. If not gold then a share of real wealth, infrastructure, etc. There's still enough of the United States to regrow into the world's best economy. The problem is that all systems are like people. They start lean and mean and then grow. Eventually they get fat and lazy and live it up. At the end they fall apart and eventually die. I fear that only total collapse can provide hope, as long as the Communists/Socialists that currently control our Government become hated as the cause of all our problems. Government needs to either be a business partner of get out of the way. No nation has the record of innovation the United States does. We need more liberty to get ourselves back to the world's number one economy and stop borrowing from the achievements of our predecessors.
This is funny. I think people forget that China largely adds very little value to the products they make. The vast majority of research and even complex manufacturing (compact memory, LCD, micro-chips) are made else where. For example, although iPods are made in China only a few dollars of value is added there. It seems China was hoping to use the same model that Japan used, do heavy low value manufacturing and then move on to work that adds more value.
But they seem to be having trouble moving on, I think it has a lot do with their lack of open government. Anyhow, without America China would not have computers (they do not make the components in a Computer and they won't be able to for many years) among other things.
We'll have to see how this plays out. China has gotten a good intellectual boost from Xeroxing our intellectual property. They might do fine moving forward. They may not. But, Wal-Mart going bye byes because their most valued importer is no longer selling them stuff may be troublesome for Americans who need shoes and clothing, save for folks who are spared a newly constructed store near their subdivision.
Quote:
On the other hand, America could fairly easily find another country willing to destroy its environment and disease its people for a cheap buck.
Ah, but therein lies the challenge...to convince these countries that toilet paper is as appropriate form of payment versus Euros, NZ dollars, Aussie dollars, Swiss Francs, Yen, and post-decoupled Yuan. Third world nations might not be economically evolved, but they might see through that scam.
Ah, but therein lies the challenge...to convince these countries that toilet paper is as appropriate form of payment versus Euros, NZ dollars, Aussie dollars, Swiss Francs, Yen, and post-decoupled Yuan. Third world nations might not be economically evolved, but they might see through that scam.
Could Mexico be a candidate? It could be a win win situation. We get to keep an eye on them being so close and it helps our immigration problem.
Could Mexico be a candidate? It could be a win win situation. We get to keep an eye on them being so close and it helps our immigration problem.
Possibly. In an "Amero" situation, I believe that Canada would be hesitant to integrate their inevitably stronger currency into ours. However, Mexico being a weaker power is a possibility. There might be strong ties to Canada, similar to the UK with the EU, but the Canadian dollar value will far exceed the USD by that time and their massive energy export facility will create a huge cash cow industry for them. They'll be reluctant to have too many ties to a struggling America dragging them down. The consumer will die a slow death and the bulk of Americans' budgets will be used for food and energy.
I sincerely hope this doesn't happen. I desperately hope America pulls up its sleeves and builds factories again making tomorrow's products for others to consume, using our innovation and reclaiming our capitalist freedoms we'll likely surrender for a short while.
Ah, but therein lies the challenge...to convince these countries that toilet paper is as appropriate form of payment
All of what you're saying is rather Cliche. Toilet paper? Well its toilet paper that will pay you fiber optics for your country, computer systems and countless other products. Anyhow, this isn't the challenge, the challenge is getting the governments to open up more. Some like Vietnam are doing it, but others are also wising up. One thing China has done is force other countries to improve their business environment.
Quote:
I desperately hope America pulls up its sleeves and builds factories again making tomorrow's products for others to consume
Oh cool, who is going to work in them? The US hasn't manufactured the cheap plastic crap China is currently making for a long time (Before China other countries like Japan and Taiwan did it). Contrary to popular belief the biggest factor in the loss of manufacturing jobs in the US is computer systems not out-sourcing to places like China. The future of manufacturing is robotics not human labor.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
