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Post by nautonnier on Dec 5, 2014 16:57:01 GMT
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Post by nonentropic on Dec 5, 2014 17:28:15 GMT
So why all the worry. China is a very large number of people 4 times US or so and their economy has grow massively regardless of which data you use.
The Chinese has on a millennial basis been a big part of the world. Its not a sign of failure to see the US an equal of other regions.
Regarding failure or whatever you perceive the US or Europe is enduring and the concept of QE. The world has not grown much in the last 8 years is this a major failure or simply an overhang of a lobby group "bankers" who have bullied the various governing regulators to allow them to regulate themselves. They stole the money as simple as that, I know that if I could direct a few hundred million into my own account "legally" I also would have. In a further 5 years this will be behind us and the next crisis will be emerging lets hope its not as big as the current event. But every year less people live in poverty and new emerging economies stride out into the world, fantastic. My issue for the future is the misdirection of investment capital into dumb arse "green energy" projects. The poor economic performance of those investments will constrain output.
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Post by walnut on Dec 5, 2014 17:32:11 GMT
Also, look at this: The Euro economies have generally embraced austerity since the crash. (Sounded sensible and responsible, right?) However the euro currency has weakened as they pursued this path. The US has used a sort of borrowed money- monetary policy which to rebuild after the crash. Loose money, assumed to be inflationary. Result, very strong dollar. Meanwhile the European countries are now flirting with another recession.
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Post by walnut on Dec 5, 2014 21:50:15 GMT
I don't think it is that simple.
If while Germany is paying their bills down, the US meanwhile grows 14%, and is able *out of that growth* to pay the debt back down somewhat as we did during the nineties (under Clinton ugh), and Germany languishes from one recession to another averaging 1% growth per year, who did better? This is what has been happening since 2008 yes?
That growth built capital over that time that the US is able to employ over the next decade, that otherwise would not have been there?
Must be said though- so far we are not even close to paying our debt back down. Nor does anyone know what that threshold level of debt that will cause a huge cascading failure of our economy, which would probably cause a true dark ages all over the world.
At the moment we are at a crucial time, because the Fed bank is out of fiscal and monetary tools. Rates are near zero, and we have qe'd for several years. There are no tools left.
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Post by glennkoks on Dec 5, 2014 22:01:23 GMT
The problem is our growth is an anemic 2%-3%. If we are adding trillions to the debt and suffering from painfully slow growth are we not going backwards as well? Is Germany better off taking their lumps now and paying the debt down?
The debt is not a huge problem until you can't pay the cost of servicing it.
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Post by walnut on Dec 5, 2014 22:11:13 GMT
One huge advantage that we have that we better not lose- the dollar being the world's currency, we have been able to print dollars for free and sell them to other nations. That is about equivalent to one NFL team being allowed 4 downs each possession rather than 3 and punt.
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Post by walnut on Dec 5, 2014 22:13:42 GMT
The problem is our growth is an anemic 2%-3%. If we are adding trillions to the debt and suffering from painfully slow growth are we not going backwards as well? Is Germany better off taking their lumps now and paying the debt down? The debt is not a huge problem until you can't pay the cost of servicing it. I agree, we might not be getting quite enough bang for the buck. When you drive through the large urban areas, you see literal armies of unemployed zombies. Why are they not contributing? Not only are they not contributing, but they are being paid to stay at home and please don't riot. Our own population is not without blame for our anemic growth.
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Post by slh1234 on Dec 5, 2014 23:30:56 GMT
Sigurdur, Did the IMF take China's economic data at face value? Because nobody else in the world does. I certainly don't believe any of the data coming out of China concerning their economy. I think the problem here is in not recognizing that the US is also pretty good at producing propoganda, including in thier economic numbers. For example, what's the current unemployment rate in the US? and who is the source of that? When it comes down to it, we don't have any real reason to believe either group. That's pretty constant in life in general, and especially relevant when we get into politics. In this part of the world, there is always talk of recognizing "reality" as some define it, and moving away from a US-centric monetary system and aligning more closely with Chinese monetary systems. All the stomping, snorting, nationalism, and attempts at defending won't change the situation. To some people, it seems to be very important who is "winning" and they define that by many standards. It seems that size of economy is one of them. The reality is that the US and China are both economic powers, and it doesn't really matter if one or the other is one or two points ahead in one scoring system or another. The reality is, just by sheer numbers, it is not possible for the US to always stay ahead of China and India. For the most part, I think people outside of China or the US don't really care how it is scored. The reality is that the US and China are major economic players right now, and a smart country will deal with both of them. Their trajectories are probably different.
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Post by sigurdur on Dec 6, 2014 1:08:04 GMT
There is an old economic axiom that I think applies presently to the USA. You can't borrow your way to prosperity. The reason USA economic growth is slow is now because of excessive Fed/state and local debt levels. The Feds haven't serviced the debt in years, and that compounding interest is coming back to haunt all of us.
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Post by walnut on Dec 6, 2014 2:47:45 GMT
I would love to see them pay down the debt. Just playing devil's advocate/ looking on the bright side/ acknowledging that the markets are all up, the dollar is up, and the world didn't end like we have been hearing. Maybe there is more to this than meets the eye.
You would have done MUCH better betting on the US by purchasing SP500 index, than betting against the US by buying gold 2 years ago.
Bill Gross famously went short US bonds a few years ago, which I thought had an unpatriotic look to it at the time. He was spectacularly wrong, his giant fund almost collapsed, and he left Pimco in a huff 2 months ago.
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Post by sigurdur on Dec 6, 2014 2:56:08 GMT
Most of the world's economies are rotten. The only reason the US dollar is strong is because the US is less rotten than the compitition.
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Post by nautonnier on Dec 6, 2014 12:08:52 GMT
Most of the world's economies are rotten. The only reason the US dollar is strong is because the US is less rotten than the compitition. I think that at the moment all the economies are on a race to the bottom inventing more fiat currency by QE and multiple derivatives based on fractional banking backed up by other people's fiat derivatives. 2008 broke down a lot but the banker junkies are back getting their fix again. It has been suggested that a world wide 'debt forgiveness' approach could be taken as most of the 'money' is actually not real at all as it is just invented money, not wealth. This is where China wins as it has spent a lot of its 'invented money' on purchasing wealth such as huge areas of Africa and Australia. Why Africa and Australia? Well if the cold comes as forecast China will have croplands that it can access - not sure how Australia or Africa with hungry people would take to crops being shipped back to China; but then the other place that China is spending money at a huge rate is Defense. All the pieces fit in that strategic puzzle.
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Post by trbixler on Dec 6, 2014 15:29:23 GMT
So far fracking has made a huge change in the flow of money. From peak oil to oil glut. If only the oil glut would translate into cheap electric power. Oh wait the EPA and Obama have that covered.
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Post by glennkoks on Dec 6, 2014 15:51:21 GMT
Most of the world's economies are rotten. The only reason the US dollar is strong is because the US is less rotten than the compitition. I think that at the moment all the economies are on a race to the bottom inventing more fiat currency by QE and multiple derivatives based on fractional banking backed up by other people's fiat derivatives. 2008 broke down a lot but the banker junkies are back getting their fix again. It has been suggested that a world wide 'debt forgiveness' approach could be taken as most of the 'money' is actually not real at all as it is just invented money, not wealth. This is where China wins as it has spent a lot of its 'invented money' on purchasing wealth such as huge areas of Africa and Australia. Why Africa and Australia? Well if the cold comes as forecast China will have croplands that it can access - not sure how Australia or Africa with hungry people would take to crops being shipped back to China; but then the other place that China is spending money at a huge rate is Defense. All the pieces fit in that strategic puzzle. I love history and it certainly seems to be repeating itself. During "The Great Depression" we had Smoot-Hawley which was a tariff on imports. The protectionism around the world stifled trade and acted to further deepen the economic crisis. Flash forward 85 years and we have most of the developed world trying to devalue their currency in an effort to get an advantage in trade. The Ruble is worthless. The yen is on the way down to worthless. Who knows what the Yuan would trade at in a free market? Gold, Oil and most commodities are getting crushed. Gone are the days when the strength of ones currency was a "good thing".
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Post by walnut on Dec 6, 2014 20:00:53 GMT
Off topic, even further- look at this mountain lion spotted in Oklahoma this week. I wonder if this might be the one I saw in Oklahoma last spring. But it is about 70 miles apart, I think it is a different one. But another one had been spotted in Mayes County which is 60 or 70 miles east, which would make at least 3. And I have a friend who saw one on the Cimarron river early in the summer. That could be this one. There may be several I guess. www.newson6.com/story/27561392/elusive-mountain-lion-spotted-on-pawnee-county-land
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