Comments on: Is this just the beginning of a depression? http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: peterhindrup http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9986 Sun, 13 Dec 2009 03:24:35 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9986 It is difficult to fathom where the belief that the US is going to ‘regain its greater glory’ springs from. The last figures that I consider credible before the crash put the US at 22 percent of the world economy. Obviously that wasn’t sustainable.
What would have been sustainable? Ten or eleven percent? Who knows, and anyway it matters little as that was before the crash

What percentage of the world economy is the US now? I recently saw figures that indicated that 70 odd percent of the US economy was ‘retail’. That is selling crap that you import, but cannot pay for.

A fair picture of the US is that collectively the population has maxed out its credit, and the country’s credit is being held up by those who having invested heavily in US government ‘paper’ have to support the illusion long enough to unload as much of the worthless ‘paper’ as they can dispose of.

One example is China is out buying access to resources wherever it can find them, and whatever price they pay, as they are paying with their US ‘paper’, the price is cheap.

The US has been closing factories and sending the jobs offshore for what, thirty or forty years. Your factories closed because they were obsolete, with some notable exceptions, so were the products and the labour force had priced itself out of the market.

Today you have no modern factories, it is ‘others’ where have the ability to design super efficient plant, nor does the US have the skilled workforce the operate such factories, and even if you did, getting them to work at competitive wages would be all but impossible. Assuming that you can overcome all that, you would only be in a position to compete on an equal playing field against already established competition.

If you were looking to invest in a start up company with those prospects you would look elsewhere.

What has the US got to export? What raw materials do you have?

If the US was a company, would you invest your money in it, and if so, why?

That the $US will lose its status as the reserve currency is a certainty. For some considerable time there has been discussion on this issue, and the fact is that various countries have already begun moving to avoid utilising the $US. Notably China and Russia who recently agreed to conduct all trade between them in their own currencies.

Middle East oil producers have long been buying gold as opposed to US ‘paper’, and increasingly oil contracts are being written in other than the $US. Notably in Euros.

This leaves as the US as a ‘superpower’ in terms of its military, but ‘broke’. With the changing face of warfare what is regarded as the ‘awesome’ military technology, built to face another enemy in another time, will be seen as nothing but a pile of expensive junk.

Recently I threw out a Epsom colour printer, $800 odd worth. When I bought it, it produced a better image than the ‘Proof printer’ that a printer friend paid $30 odd for. Today I can buy a better printer, better in all respects for less than $100.

Similarly time and world has passed the US by.

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By: Whatzupwitdat http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9938 Sat, 12 Dec 2009 01:00:17 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9938 It’s over.

Everything has been tried for the bankers benefit and they will hold on to the largess of the dumbed-down American tax payers.

You should all straggle-around and check out the nearest dumpster for what is left of your so-called greatness.

I’m hopping you’ll meet your brethren, King Rat, on the way down into the stinking refuse that is your discarded ideas about yourselves: Who you are, who are you not and who you can never be as long as you persist in your delusion that you can put in two parts and get back four.

It’s all about “getting away with it”, isn’t it?

This whole culture has undermined itself with its inability to talk the truth because it doesn’t sell anything.

It’s boring, it’s what we knew as children but it just doesn’t sell, does it.

No way.

So, go fuck yourselves and die in your stupid dreams about yourselves while there has been over 80,000 chemicals created with no serious testing as to health concerns.

Then there’s the endless churning factory of birth:
children dropped on the dirt like it was some sort of
act of excretion.

Ha, what a fucked up place while Tiger Woods rushes to his lawyers to save his advertising image and the standing Government pukes it’s useless, stunned, deer-in-headlights crap about everyting.

You all know you suck as humans, as so-called profesionals, as so-called parent, as so-called people, your all just products.

Best thing about it all is you come in such bright and lucent wrapping.

It’s the most wonderful time of the year-yeah!

Ha, go fuck yourselves, my brothers and sisters, your such translucent shit, it’s unbelievable, ha!

Merry Christmas or Merry Purim or Merry Buddha or Merry “Fuck it”. woo hoo!

C’mon, let’s pray.

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By: eddieblack http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9931 Fri, 11 Dec 2009 23:13:36 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9931 !936 through 1950s the U.S. was 51 to 53 percent of world GDP. Both during the Great Depression and through post WW II years.

1970 Nixon cancels Breton Woods(gold standard). Inflation takes off globally. Most scales to adjust economic data for inflation to my mind are suspect. I don’t believe the economic growth numbers.

Prolonged large trade surpluses and deficits put economies equally at risk for contraction and other economic harm. Balance of trade should be what the term implies, balance. I take Adam Smith’s word for it…”The Wealth of Nations”.

The stock market gained steadily through the 1930s. The American people did not. This ultimately was a function of a credit collapse. This is what has happened now.
We also foreclose 275,000 homes a month. 1933 saw that many foreclosures for the year. In 1933 we were the worlds largest producer and exporter of crude oil. We are now probably still the worlds biggest importer of crude. The Great Depression didn’t hit bottom until 4 years after the crash of 1929. We are little more than a year out from the crash of 2008. Our governments debt load is substantial compared to 1933 to 1938. Does anyone really believe we are out of the woods yet on this one?

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By: DanHess http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9899 Fri, 11 Dec 2009 08:12:47 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9899 Felix – check this!
http://4.bp.blogspot.com/_otfwl2zc6Qc/Sw Wyuy39ikI/AAAAAAAAL8g/Cp4XVVbTmqY/s1600/ worldgdp.jpg

In 1975 the US was at 26.3% of world GDP. In 2009, the US was at 26.7% of world GDP.

What has happened? Asia has risen sharply but the EU has diminished sharply. America has held its own.

America’s demographics are not bad in the long term, I say.

Please have a look at the following chart:
http://en.wikipedia.org/wiki/File:Birthr atechart_stretch.PNG

There is a rut after the baby boom but after that the baby boom echo is just as big as the baby boom!

Not only that, but immigration (not included in that chart) has been large and growing. In short, the US labor force is larger than ever. Add to that the fact that folks are in knowledge jobs where they can work longer, and you have a strongly growing workforce, not a shrinking one.

Compare this to nations such as Japan, Germany, Italy and others. Those are the nations which must truly fear for their futures. Even China is facing an inverted population pyramid in only a generation.

Meanwhile, America has been *the* destination for people all over the world for two centuries running and that trend is only increasing.

A thought experiment: If everybody on the planet were given a chance to snap their fingers and be a citizen/resident of any country what would happen? I do not know how many people would appear be in the US, but I expect it is several billion at least. I say this not as nationalistic chest-thumping. We are a nation of immigrants. My mother is a first generation immigrant from Austria, my wife was born in Japan. You my friend enriched us from abroad too.

We are facing the perfect storm right now, but it is cyclical, not secular.

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By: n4rky http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9894 Fri, 11 Dec 2009 07:11:08 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9894 It isn’t necessary for any one country to take on the role of economic hegemon. It is that the deindustrialized United States, with its crippling debt, declining wages, and high unemployment can no longer fill the role.

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By: ScottP http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9867 Fri, 11 Dec 2009 02:38:46 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9867 Talkin’ ’bout my generation, eh? Yeah, the peak spending years of us Boomers are behind us. Gen X? Well, just ain’t enough of them. But guess who’s coming to dinner? Not to mention the auto showroom, the subdivision, and the mall. The Millenial Generation. Their leading edge is now in their late twenties and — I know this brings a tear to the eyes of many a Boomer because we like being the focus of attention — they outnumber us. So don’t get too depressed. There’s a lot of stuff they’re going to need to buy.

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By: fred5407 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9857 Fri, 11 Dec 2009 00:31:38 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9857 I think there is some right on thinking here, and some that is not too good. Our real problem is to get the engine of the country restarted again, since our industries and our government have lost touch with the people. It happened in 1930 with people talking about the pillars of industry and that prosperity is “just around the corner”. Losing the confidence of the people took it down then, and it can take us down now, if business and government don’t get there act together. The AIG mess ruined most peoples confidence in government and the actions of the current administrations in helping the unemployed is still drawining the well of confidence. It will be some time before things pick up.

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By: OnTheTimes http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9845 Thu, 10 Dec 2009 21:48:03 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9845 Looking at exports without imports is ridiculous. We’ve had massive trade deficits over the past, I don’t know, at least two decades. Those deficits are financed by either debt or selling assets. Either way, the wealth of the US declines.

If exports accounted for 10% of GDP in 2008, what do you think imports accounted for (don’t include cash flowing into the US to buy assets)?

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By: djackson http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9841 Thu, 10 Dec 2009 21:10:55 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9841 Oh, and we have not consistently run a surplus since the 1960s and have continuously run trade deficits since 1976. Now that we are hopefully done piling on.

Felix, this really does not make sense:

The point here is that while most recessions are cyclical phenomena, this one could mark a secular turning point — the beginning of the end of America’s hegemony in the global economy and the capital markets. And the turning point has come too early, before the rest of the world has generated enough internal momentum to take America’s place.

If they aren’t ready to take over, then the ‘hegemony’ definitionally is not over. In reality, this is a continuation of a process that has been ongoing since WWII. We have gone from roughly 50% of world GDP in the 50s to just under 25% recently. That rebalancing will continue in at gradual, perhaps faster, rate. And who is going to take over? If your argument is demographic, it certainly will not be Japan or Europe which are in worse shape. China? They have a long way to go. If you get past the public blather from talking heads, wall street happy time analysts, and the silly ‘official’ Chinese economic data and start looking at the facts, China has real problems.

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By: Bob_in_MA http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/comment-page-1/#comment-9840 Thu, 10 Dec 2009 21:05:39 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/is-this-just-the-beginning-of-a-depression/#comment-9840 Good catch, DonCoffin. People make similar mistakes about the 1930s.

Demographic projections are much worse for China, and everyone sees huge growth there.

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