Where is the US economy headed?

@Thomas,

I disagree; I think the world economy today is much different from the past, and the dynamics that play into unemployment has many variables that includes the long-term unemployment of many workers who could not find work and just quit looking.

Also in play are the decreasing value of the middle class income and benefits that will impact how that plays into consumer spending. For those with good jobs, I think that ratio of the populace are in pretty good shape, and they're the ones who will be buying homes, cars, and enjoying vacations.

Many people have been in fear of inflation for many years, and many purchased gold as a hedge, but at current rates - is below 2%. Printing more currency isn't circulating to the middle class consumers who impacts our economy's inflation.

Much wealth is being accumulated by the wealthy, but they're not spending enough to impact inflation. Their mansions, yachts, and airplanes do not have any impact on inflation; cost of fuel and energy does.

When do you anticipate this "runaway" inflation to take place?

BTW, from my vantage point, I've learned that economics is not science; it's an art. That's the reason why many economists disagree on the future impact of inflation, the stock market, and the world economies.

1 Reply

@cicerone imposter,

Quote:

Builder, Who ever said "Australia's failed economy?" Do you know how to read and comprehend what's written rather than making your own interpretation?

I read at A level, and comprehend much better than you could imagine. I also read between the lines, and pick up on direct inferences, whether they be targetting my intellect (ad hominen) or the content of my posts. The following are your words, from your previous quote.

Quote:

That Australia (is) still producing clothing products only explains the level of your economy. Advanced economies such as the US, Germany, and many parts of Asia now produce high tech products and services. That's where the economic future is

.

By inference, you are stating that Australia's economy is way behind the US of A, because Aussies still demand high quality clothing, and don't mind paying extra for original, well-made attire.

Now, by inference, you are also stating that while you consider the US of A's economy to be well in advance of Australia's, you consider that inferior clothing and boots are quite okay, as long as there's a market for them.

Florsheim, as I've stated, rather than inferred, missed out on a niche market, though I doubt that their acounts manager would have any influence on that kind of decision-making.

2 Replies

@Builder,

It's not by inference. It's not based on

Quote:

because Aussies still demand high quality clothing, and don't mind paying extra for original, well-made attire.

You wrote,

Quote:

By inference, you are stating that Australia's economy is way behind the US of A, because Aussies still demand high quality clothing, and don't mind paying extra for original, well-made attire.

It's based on fact. Here's a list of the world's largest economies. Australia is not listed in the top ten.

http://img.photobucket.com/albums/v97/imposter222/worldslargesteconomies.jpg

As for per capita income, Australia falls in the 12 to 14 group.

This by "inference" tells anybody who knows about economics will tell you that Australia's economy is still some decades behind the curve.

You wrote,

Quote:

Now, by inference, you are also stating that while you consider the US of A's economy to be well in advance of Australia's, you consider that inferior clothing and boots are quite okay, as long as there's a market for them

.

Show me where I said anything about "inferior clothing and boots?"

You wrote,

Quote:

Florsheim, as I've stated, rather than inferred, missed out on a niche market, though I doubt that their acounts manager would have any influence on that kind of decision-making.

What niche market are you talking about? Florsheim was the most successful shoe brand of International Shoe Company that included the Thayer McNeal women's shoes. Florsheims were sold in some of the most high-tone clothing and department stores. You're just showing your ignorance by talking about a subject you know very little.

1 Reply

@cicerone imposter,

GDP per capita USA is #6 and Australia is #14......out of 183!

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Care to try again CI to argue that the Aussies suck?

3 Replies

@hawkeye10,

The US has over 300 million people, right? Australia has 22 million. As if that graph that CI posted has anything at all to do with his inference that our economy, compared to the US's is a failure.

We don't have 11 percent unemployment. We have less than 6 %.
We do have a productivity slump, at present, which, several pundits have put down to the GFC, and the property slump.

Compared to the US of A, we are holding our own, and we do have social security, and free healthcare for all. Though the waiting list for elective surgery is quite ridiculously long.

I'd prefer that CI stays on track with one topic at a time, that being his hedging with his inference about Australia's "fake" "failed" economy.

1 Reply

@Builder,

No, that's the reason why I included per capita income.

It's easier to produce jobs for 22 million vs over 300 million people. That's simple logic. That's the reason why some "small" countries do well; examples include Japan, Germany, and many European countries, when the right kind of education and development has occurred.

China and India, the two most populace countries in the world have difficulty creating jobs for everybody. So bragging about unemployment rates doesn't say everything about one country's economy.

What I'm doing is challenging what you say. That's staying on topic.

But, you wouldn't know that!

1 Reply

@cicerone imposter,

Okay then; let's look at the liveablity ratings from wiki's economist intelligence unit's ratings people, shall we?

This graph from wiki mentions Australian cities four times, (Melbourne at number one) but the US doesn't get a look in. I wonder why that would be.

1 Reply

@Builder,

And this just in from OpEdNews;

What American Politicians Won't Admit

It was once thought that as a sovereign nation, no foreign government short of an invasion and military occupation could run the U.S. But, what has actually occurred is that foreign governments do run America, and they also make billions a year by allowing us to maintain our standard of living. We are now at the will of countries like China, Japan, Russia and Germany.

You Can Laugh Now And Cry Later

From the ritzy Essex House hotel in Manhattan, owned by the Dubai Investment Group, to the nationwide chains of Caribou Coffee and Church's Chicken, owned by another company serving Arab investors, foreigners are buying bigger and bigger chunks of the country.

Foreign countries, and their investors, have bought up everything available of value in the United States using our own money. Banks, Industrial and Manufacturing Companies, Malls, Colleges, Resorts, Convenient Store and Motel chains etc etc. Combine that with the fact these same countries are holding approx. THREE TRILLION, TWO HUNDRED SIXTY FIVE BILLION DOLLARS worth of US treasury securities!

Who are a just a few of those foreign countries? China ($767 billion), Japan ($686 billion), Russia ($138 billion), Brazil ($126 billion), Luxembourg ($106 billion), Taiwan ($74 billion), Germany ($55 billion), Thailand ($26 billion), India ($38 billion), Mexico ($36 billion) and even Columbia with ($11 billion).

Story here.

0 Replies

@cicerone imposter,

cicerone imposter wrote:

BTW, from my vantage point, I've learned that economics is not science; it's an art. That's the reason why many economists disagree on the future impact of inflation, the stock market, and the world economies.

Then, I'm sorry CI, you're ignorant of economics. It is very much a science. Maybe it's not as hard a science as physics is, but unlike an art, it does make refutable predictions that can be tested against empirical evidence. And the particular refutable predictions of the Keynesian macroeconomics-101 models have stood up to recent evidence spectacularly. The Fed quadrupled the money supply, yet inflation didn't soar. Government debt exploded, yet interest rates declined, long-term and short. Governments subjected their budgets to varying degrees of austerity programs, and their economies contracted in proportion to the programs' severity.

Sure, economists have disagreed about the best way to handle the crisis. But the reason they disagreed wasn't that economics is an art. It was that some of them were wrong and some of them were right (or, at least, not-yet-refuted).

cicerone imposter wrote:

When do you anticipate this "runaway" inflation to take place?

When the economy is at full employment, and if the Fed keeps printing tons of money anyway. I don't think the economy is anywhere near full employment, so I'm not anticipating runaway inflation anytime soon.

3 Replies

@Thomas,

CI is right on this one.....economics is all about human behavior, which can not be fully predicted by humans as being humans we are too close to the subject to perform the observation. Aliens from outer space could possibly make human economics a science, we can not.

It is much more like art, which is about humans (the artists) attempt to draw out of other humans a desired response.

1 Reply

@hawkeye10,

Economics is about number crunching, and percentages. Why would you assume it about people and their frailties?

Here's the list of the top fifty companies in the capitalist network globally. Not one of these companies actually produces anything tangible, except maybe for the last one. The top of the heap, Barclays, is currently involved in the LIBOR scandal.

The top 50 of the 147 superconnected companies

1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

* Lehman still existed in the 2007 dataset used

0 Replies

@hawkeye10,

Quote:

GDP per capita USA is #6 and Australia is #14......out of 183!

Qatar being No 1 at 2.5 times the US. Kuwait beats the US. And they had to be rescued at our expense.

Anybody for relocating to Qatar?

0 Replies

@Thomas,

There is nobody who can measure human behavior which is the primary driver of economics. No math formula can be developed, because the variable are too many and complex.

We will have to agree to disagree. That's the reason why even so-called expert economists cannot agree on specific issues about future performance.

Ever see economic forecasts revised and re-revised? It's a social science, but math doesn't make it science.

1 Reply

@cicerone imposter,

cicerone imposter wrote:

We will have to agree to disagree.

Deal.

1 Reply

@Thomas,

Thomas wrote:

cicerone imposter wrote:
BTW, from my vantage point, I've learned that economics is not science; it's an art. That's the reason why many economists disagree on the future impact of inflation, the stock market, and the world economies.

Then, I'm sorry CI, you're ignorant of economics. It is very much a science. Maybe it's not as hard a science as physics is, but unlike an art, it does make refutable predictions that can be tested against empirical evidence. And the particular refutable predictions of the Keynesian macroeconomics-101 models have stood up to recent evidence spectacularly. The Fed quadrupled the money supply, yet inflation didn't soar. Government debt exploded, yet interest rates declined, long-term and short. Governments subjected their budgets to varying degrees of austerity programs, and their economies contracted in proportion to the programs' severity.

Sure, economists have disagreed about the best way to handle the crisis. But the reason they disagreed wasn't that economics is an art. It was that some of them were wrong and some of them were right (or, at least, not-yet-refuted).

cicerone imposter wrote:
When do you anticipate this "runaway" inflation to take place?

When the economy is at full employment, and if the Fed keeps printing tons of money anyway. I don't think the economy is anywhere near full employment, so I'm not anticipating runaway inflation anytime soon.

Me either. I've grown so tired of the constant inflation hawks and their projections of doom, which never seem to come true.

Cycloptichorn

0 Replies

@Thomas,

the U.S. government has set interest rates at an artifically low rate in order to finance the national debt. A hidden tax on people like me that they convinced to save for my retirement. Screwed again.

1 Reply

@RABEL222,

RABEL222 wrote:

the U.S. government has set interest rates at an artifically low rate in order to finance the national debt.

What do you mean by "artificially low"? What's artificial and what's natural? In conventional economics usage, the natural interest rate is whatever rate it takes to balance supply and demand in the market for bonds. So if current interest rates were artificially low, we would see demand for bonds outrun supply. Overeager investors would be scrounging to borrow money from weary savers.

This is the opposite of what we're actually observing in the bond market. Even at interest rates near zero, we're seeing savers desperate to lend while investors are slow to borrow. That's how we know that interest rates are not artificially low. To the contrary: For supply and demand to clear, the bond market would need a negative nominal interest rate. But the zero-lower-bound acts like a price control, making that impossible. The consequence is that interest rates, far from being artificially low, are really artificially high.

1 Reply

@Thomas,

I believe some time ago, Japan had negative interest rates on bonds. My memory is vague, so don't expect any more than what's posted here.

Where is the US economy headed?

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