Economics? Yikes!

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Not entirely sure what to comment other than...yikes!
These numbers are mind-boggling and I think the motion closely
simulates real-time.
Brings the household budget down to earth for sure.

United States Debt Clock

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A sobering financial take......

Mother of all carry trades faces an inevitable bust


"This unraveling may not occur for a while, as easy money and excessive global liquidity can push asset prices higher for a while. But the longer and bigger the carry trades and the larger the asset bubble, the bigger will be the ensuing asset bubble crash. The Fed and other policymakers seem unaware of the monster bubble they are creating. The longer they remain blind, the harder the markets will fall."

[Silvertwinkie]

It's really the perfect storm and a self perpetuating issue. Greed took us to where we are and fear and lack of employment and liquid funds or fund loaned from institutions creates a lack of purchasing, which leads to lower tax revenue, which continues to be a vicious circle.

The problem here unlike the crash of '29, you didn't have the major banks doing what they are still doing, even after this mess. Infusing a trillion dollars into a corrupt system isn't going to help the overall economy, trade deficit, etc. Look at the cash for clunkers program. Put out there to boost the economy, help save the environment and assist in pulling us out of this quasi depression....and yes folks this is a mini-depression. Well, it put the pedal to the metal for auto sales, and showed up on the GDP radar, but from all indications, a majority of the money at it's final destination went abroad to foreign based companies and indications that GDP will fall significantly below where it was just recently. Only a slight portion of that money that went abroad came to the line workers....as you know there was a glut of inventory, so only a handful of plants increased headcount both for domestic owned line workers and foreign owned line workers.

Here is a prime example of an expanding trade deficit (recall this is just one example of millions):

I need new front tires for my tractor. There are many places selling the tires for $45/tire and $15/tube. The tires are Made in America. There are handfuls of folks who are selling made in China tires for $50 for 2 tires and 2 tubes. In these times, who do you think most would purchase from? Anyone take a peek at the things they buy to see where they are made? Ever try to not buy something made in China or abroad? Not the easiest of tasks nowadays, thus further digging us into a hole. Simultaneously, the made in China label, the lion's share of the $$ goes to the Chinese Government, who is dwarfing military spending that makes what the Regan Administration spent on the cold war look like pennies.

There is zero incentive for companies to manufacture here anymore. Companies can make 10x the amount they make on a product when you have state run labor camps in Asia assembling product for 1/3 of what it would cost to assemble here in America. As another example, we bought about 300 laptops for work. After ordered a few days later a Chinese messenger service delivers them just off the plane at O'Hare from China. All the units were assembled in China.

It's a tangled web we weave and in my case, I'm buying the $45/tire- $15/tube that is made in USA.

[mdyeargin]

Here's you a factoid from Business Week "The U.S. trade deficit narrowed in August to $31 billion, or about half the size of a year earlier, as the downturn continued to depress demand for imported goods." While we are still narrowing the deficit the US is still 5% greater import than export, which is according to the same report the highest in the world.

The more important question I have is: When will American companies do a full cost analysis of doing business over seas and start the small 20 to 30 people manufacturing facilites back in the U.S. that will help support economic reform? We have becom a consumer nation and lost the manufacturing edge. Is this due to regulation and tax, nice try, no it's been due to higher salary demands of mostly with management. Give me a resonabe amount of property to park my Airstream and $10k more than my true expenses each year and whatch how cheap I can manage and produce a product.

Just another point of view.

Penny-Pinching Americans Downsize the Trade Defecit: Shrinking U.S. Trade Deficit - BusinessWeek

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Barrick shuts hedge book as world gold supply runs out

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The Perfect Storm and The System Eats Its Own

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Spooky...

Dollar hits 14-year low against yen

Dubai in deep water as ripples from debt crisis spread - Times Online

[Sean Woodruff]

The more important question I have is: When will American companies do a full cost analysis of doing business over seas and start the small 20 to 30 people manufacturing facilities back in the U.S. that will help support economic reform? We have become a consumer nation and lost the manufacturing edge. Is this due to regulation and tax, nice try, no it's been due to higher salary demands of mostly with management. Give me a reasonable amount of property to park my Airstream and $10k more than my true expenses each year and whatch how cheap I can manage and produce a product.

Couldn't agree more. I used to work for a company that bought thousands of parts from China. By the time the parts get done sitting around and getting assembled into a finished product all the the PER PIECE savings has gone out the window. And, there hasn't been an American worker making the parts.

As for the higher demands for pay, it even trickles down to the small shops. I just had this discussion with a machine shop I do business with. He whines and whines that he "isn't making any money" doing some of my parts. I've paid him roughly $90,000 this year with only about $20,000 of it in pure steel costs. Whining about $70,000 to pay the overhead of a two man shop shouldn't be happening. He changed his mind when I told him I feel so bad that he isn't making any money that I needed to find another shop to do my work. After all, I don't want to put him out of business by making him do work that he isn't making any money on. He is an example of another issue the GREED has led to.

[wingfoot321]

There is a site called treasurydirect.gov that has fewer numbers but, give you the up to date amounts. It is at 12.274 Trillion. This is the number the dems have proposed raising 1.9 T for just this year.

A computer can't even count that high.

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Your post brought to my mind Dr Thomas Sowell, a giant of modern critical economic and political thought.
Widely regarded as one of, if not the foremost Economist of our time.

As someone who studies history, I found this video very interesting:



Probably some history we could put to use today.

As brilliant as this guy is, one of the things I like most is that he's a plain-speaking straight talker.