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mindmetoo
Joined: 02 Feb 2004
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 Posted: Thu Nov 29, 2007 3:32 am Post subject: |
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| thepeel wrote: |
| Yes, you are right. But these things don't happen over night. The US economy is 70% consumption. The transition from consumptive to productive dominated economy is going to be very, very painful. |
All business cycles have pain.
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| Y[ou don't just turn factories on. They have to be built, there has to be investment, you have to have a ready workforce. You don't just switch overnight! |
I'm still not talking about factories right. I'm talking about more movies, more software sales, more services sold. I'm talking about more people visiting Vegas and Florida. I'm talking about more people with euros buying NYC property. There will be winners and there will be losers. Oh well. What's changed? |
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thepeel
Joined: 08 Aug 2004
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| Posted: Thu Nov 29, 2007 3:37 am Post subject: |
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What has changed is the extent of the change. Do you know what a 70% drop in the dollar would do to America? And 70% drop could actually be a fairly reasonable guess. I've read as high as 90%.
There will not be a major increase in manufacturing for a long, long time. This, because the world will fall into recession with the United States. There goes your more movies sold, more shopping tries and more software. Americans won't be wearing a burlap sack while working the dusty fields. But the next year is going to be really, really painful. |
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blade
Joined: 30 Jun 2007
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| Posted: Thu Nov 29, 2007 3:44 am Post subject: |
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| mindmetoo wrote: |
I'm still not talking about factories right. I'm talking about more movies, more software sales, more services sold. I'm talking about more people visiting Vegas and Florida. I'm talking about more people with euros buying NYC property. There will be winners and there will be losers. Oh well. What's changed? |
Hold on, if the countries that are currently exporting to the US can no longer do so then how are they meant to afford US imports? |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Thu Nov 29, 2007 4:44 am Post subject: |
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| blade wrote: |
Hold on, if the countries that are currently exporting to the US can no longer do so then how are they meant to afford US imports? |
Well if the US dollar declines, then the Euro becomes all that stronger as a reserve currency. The purchasing power of the Euro goes up. People in Europe start buying a lot more Chinese MP3 players, Korean cars, and Thai shrimp. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Thu Nov 29, 2007 4:56 am Post subject: |
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To offset the decline in the value of the dollar, the EU and others are going to lower the value of theirs. Lower the value = raise inflation. There are no easy answers to this one, mm2. Central banks have been very irresponsible.
M3 money supply growth for US is hitting 18%, China is at 20%, the EU region has just announced theirs is 13.5%, and Russia 50%. All these states are going to have serious inflation. The US currency will just fall faster than some others. We could be entering global hyper inflation. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Thu Nov 29, 2007 5:17 am Post subject: |
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| thepeel wrote: |
M3 money supply growth for US is hitting 18%, |
Do we have M3 data for the US anymore? I thought they stopped realeasing it last year. |
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Tiger Beer
Joined: 07 Feb 2003
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| Posted: Thu Nov 29, 2007 7:01 am Post subject: |
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Once my U.S. debts are paid off (it'll happen in the next few months), I am definetely looking for a new currency to send my savings (and although I'm an American, it won't be in US Dollar).
I'm thinking of Yen or Euro actually. I don't see the US Dollar recovering by any means. I think most of the world is hoping it'll continue to decline on just about all fronts. Less American power and influence in the world - at least economically. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Thu Nov 29, 2007 7:37 am Post subject: |
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| huffdaddy wrote: |
| thepeel wrote: |
M3 money supply growth for US is hitting 18%, |
Do we have M3 data for the US anymore? I thought they stopped realeasing it last year. |
That is right. Private research firms and individual economists construct the data using the previous criteria. Many countries don't report M3 anymore, but quite a large number of economists feel it among the most important indicators for accurate forecasting.
The Fed argues that the data is too difficult to construct and doesn't share enough information to be worth the effort. Also, the calculations are very complex and maybe less trustworthy than we would like. Others see an attempt to hide the massive expansion in money. |
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keane
Joined: 09 Jul 2007
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| Posted: Fri Nov 30, 2007 12:09 am Post subject: |
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| thepeel wrote: |
| The Fed argues that the data is too difficult to construct and doesn't share enough information to be worth the effort. |
Given the resources available to the US Gov't, does this strike anyone else as bull crap?
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| Also, the calculations are very complex and maybe less trustworthy than we would like. |
News flash: economics is about as much hocus pocus as anything. As the Nobel debate indicates, many don't consider it a science any more than psychiatry is considered one by some.
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| Others see an attempt to hide the massive expansion in money. |
Given the first point above, I have to say, "Bingo!" |
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