Where is the US economy headed?

Crisis Created!

It really is about Obama and his policies.

He chose to ignore decades of high risk taking by the government/corporate class and went on a spending spree like no other before him.

This is about Obama.

I have never invested in gold, although I recommended gold purchasing once in 2008. I bought a few gold pieces for my sons, but never as an "investment."

Having faith in gold is about the most ridiculous investment for those living today. If all economies tank, nothing will have value except food and shelter. Between gold vs food and shelter, I prefer food and shelter.

Beyond that, unless we have faith in our economic system and economy, might as well throw in the towel and call it quits for this lifetime.

That's the reason why stock markets will always have value to humans; we believe that the foundation of economies are the demand for products and services.

Gold is someplace way out in the stratosphere where one can put value on jewelry and some commercial use.

I'll always prefer food and shelter that I buy with cash.

No, having faith in Obama and his economic policies is about the most ridiculous investment for those living today.

The bet is that as the global financial system collapses gold will be the new dollar, it will be the universal global currency. Under this theory the more gold one can get before the collapse the better off you will be after. Food and shelter are great for the little guy who wants to secure something to sustain his family after the collapse, but it will not be of much use for buying up assets after the collapse, for getting in on the ground floor of the next economic system, for that you need gold.

BTW- have you noticed that COSTCO is now pushing 3 month individual and one year family of 4 armageddon food stores...some canned some freeze-dried?? What does that tell you?

Gold has easily broken through $1650.

That is all.

Ouch! Blood On Wall Street.
Just before the close, the Dow is down 260 points (2%) while the broader markets are down somewhat more. Every sector I watch (banks, retailers, oil etc) are all down.
Some of it is, perhaps, investors listening to economists who argue that cutting spending while we face a double-dip recession is bad policy. I agree with the logic, but note that the vast majority of the cuts don't kick in for a year or so.
Consumer spending fell a bit even as wages for those with work went up a tad. That did not go down too well.
More significantly, I think, is that investors (as us on A2K, perhaps) have fixated on the debt ceiling and have neglected things like how we are going to create jobs.
Gold soared, mostly on news that South Korea has accumulated 25 tons in the past few months.
Oil dropped to something like 93.56. Try to postpone buying gas until this weekend. Prices at the pump should drop by around 5-6%.

Not all of us; for the last several months, I've been asking why there is no focus on job creation at this time. The 'debt limit' is a useless distraction from our true economic problems...

Cycloptichorn

rjb, That's because there's always a lead in the market to the anticipated impact on the economy.

However, as a principle rule of investing, never try to time the market.

Something as far off as the cuts taking effect - which is a biggie in this economic environment, seems to me that people are still frequenting their favorite restaurants and shops regardless of the costs. Many travel companies are sold out on some tours, and the flooded cruising industry are cutting rates to the bones to attract customers.

Our future has many handicaps to overcome, but we are a varied and resilient economy unlike many with limited exports. We need to continue to look at the big picture; American products are still attractive, because most foreign buyers see it as bargains based on the US currency devaluation.

Economies run in cycles; this one is no different. We must continue to advocate for more government spending to prop up our economy.

Olympia Wa is better off than is most of the country, and that is not true even here. We have a few places that appeal and who are doing things right and this are making money, but everyone else is either treading water or losing money. Operators are hanging on by a thread hoping that at some point the economy turns around. People still go to restaurants, but not in the numbers that they did pre Great Recession, they dont spend like they used to, and they are much more choosy than they used to be (read shop for good deals on good food and good service ).

Gold has broken though $1660.

That is all.

We have a relatively new shopping area called Santana Row in San Jose; their restaurants are all "pricey" by any standard, but go there during lunch and dinner hours, and you'll see them busting at the seams. Most had to "create" outside seating to accommodate the crowds. The shops there are "above average" also. Yes, they have their Coach, Tommy Bahamas, Brooks Brothers, and a new Tesla show room. Most of the cars parked there are on the luxury side, and they have Cadillacs on display on the sidewalks.

I don't think the customers who frequent there are suffering from this recession.

Silicon Valley has never represented the economy of the rest of the country, you know that. All of the venture capital money that flows in skews everything. While too much money sloshing around helps a few folks like you, over all it is a bad thing because too much money chasing too few assets/good ideas leads to bubble making.

Unemployment rates in Silicon Valley is over 9%. Higher than the national level.

You had a per capita personal income of over $60K a year pre Great Recession, which while the latest we have in 09 which was down to $55K is almost certainly back above $60K in this "recovery" which is confined to the upper class (of which the best of the techies and the tech company owners are a part)...and you want to claim that the silicone valley experience that of the nation as a whole??!!

You need to get out more CI, as you clearly do not understand what is happening in America, as you fail at seeing outside of the bubble that you are in. Silicone Valley does not represent the nation, and your personal wealth is far above what most people have so you can't understand how the rest of us are living.

I keep looking at the new figures for first quarter growth. Not just because it's horrible, which it is, but because of the size of the downgrade from the original. That makes it look like some very smart people don't know what they are doing. There's really nothing out there in housing, autos, or manufactoring that shapes up as a real confidence builder.

Duly noted, Cyclo. I must admit that I - like others - got fixated on the debt ceiling debate. Obama and McConnell each talked about jobs today, but neither offered much that would really have a significant impact on have a significant impact on reducing unemployment. It would be interesting what you, I, or anyone else to suggest.
The challenge, of course, is that the sentiment now is to not to want to spend government money.

either that or they have been misreprenting on the upside trying to create confidence as a way to get consumers and the corporate class to spend....to help dig the economy out. This I think is more likely than is incompetence, as well as is a bigger problem.

If I am right the scam did not work, and now they need to come clean on what the old numbers really are.

I never said Silicon Valley represented the nation. Show me where I made such a claim? What I'm saying is there's a conflict between the current recession and how people are able to continue living as if the recession hasn't made any impact.

I also included the travel industry (which is national) where some travel companies have "sold out" on some tours.

Per capita income is probably the worst example one can use to determine how people's standard of living is.

I was in Cuba last May where the average monthly income is $20/month. However, there are many hotels in Havana that charges over $100/day for rooms, $25 for meals, and $7 for drinks. I was in Norway not too long ago. The per capita income there is $60k/year. Their taxes are relatively high; food tax is 17% and goods taxes are 25%. Go to any city in Norway (I visited many on the coast on a coastal cruise) where lunch can cost about $50, and dinner at $100. Beer is $10, and wine is $14. Those are "average" costs. Nobody will be able to determine how they manage to frequent restaurant and bars based on their per capita income vs what most things costs in that country. It's a contradiction no matter how one wishes to view their economy.

The demand for food from food banks have been increasing here in Silicon Valley; those who used to donate to food banks are now the recipients. Per capita income doesn't tell me anything.



And yet, you still see many restaurants and bars full of people. How do they do it? It's yet another contradiction that I'm not able to explain.

Do you understand the contradictions? I think not.

roger, You are 100% correct; those major items are on the decrease. Look what the tea party did during this crisis to demand government spending cuts at a time when more Americans citizens are in need - not only for food and shelter, but jobs.

They have taken this non-issue into a crisis without finding any solution for creating jobs; rather, their demands are to cut jobs.

There are many Americans who support what the tea party is doing, because they do not understand economics - and not even any understanding of politics.

They will get their wish to make our economy suffer more; more Americans will be losing jobs, homes, and their security, because the stock market will take away any wealth they thought they had. Jobs and the stock market are directly related.