Excellent look at the problems with

[grimm]

http://www.atimes.com/atimes/Global_Economy/GA25Dj01.html

[Almighty Colin]

Whenever I read articles like this I wonder why the author didn't take the time to point out historical comparisons and contrasts. Take the US federal debt, for example. It is a record high. But so is the US GDP. On a percentage basis the federal debt is less than it was during World War II. As a percentage of GDP, it is about average for a G7 country. Historically, what has been the result in nations who hold debt around 60%-70% of GDP? How is today's economic situation different and which comparisons are most appropriate?

Low savings rate? Good or bad? What are the historical precedents? Low interest rates mean that money in the bank is not as good of a deal as it once was. Where is that money going? Home ownership, toys or food?

High consumer debt? Same as above. And how does one factor in low interest rates which make borrowing cheaper?

An imbalance in the trade deficit? So if both imports and exports continue to grow steadily but imports grow faster is that good or bad? What are the historical precedents? What is the right balance? What would we do about it anyway? Should we restrict imports with tariffs?

These articles never make the appropriate historical connections and it makes me wonder if the author even knows what they are.

[grimm]

Originally posted by Almighty Colin@Mar 5 2005, 01:18 AM
Whenever I read articles like this I wonder why the author didn't take the time to point out historical comparisons and contrasts. Take the US federal debt, for example. It is a record high. But so is the US GDP. On a percentage basis the federal debt is less than it was during World War II. As a percentage of GDP, it is about average for a G7 country. Historically, what has been the result in nations who hold debt around 60%-70% of GDP? How is today's economic situation different and which comparisons are most appropriate?

Low savings rate? Good or bad? What are the historical precedents? Low interest rates mean that money in the bank is not as good of a deal as it once was. Where is that money going? Home ownership, toys or food?

High consumer debt? Same as above. And how does one factor in low interest rates which make borrowing cheaper?

An imbalance in the trade deficit? So if both imports and exports continue to grow steadily but imports grow faster is that good or bad? What are the historical precedents? What is the right balance? What would we do about it anyway? Should we restrict imports with tariffs?

These articles never make the appropriate historical connections and it makes me wonder if the author even knows what they are.
what separated this article and the rest for me is that china becoming an emergant power, with that population is going to make them a huge consumer on the global market.

while the tendancy of reports from other countries is to think that nations as a unit will turn against the us economically, collecting debt, etc. the reality is that this will never happen. It is beyond comprehension of what that would do to the world economy. a global cutting off of ones nose to spite its face. but it is a possibility, and that has never been the case.

I believe there is a lot of fear of what 1 billion consumers brought into an already strapped 21st gentury global economy, just years on the tail end of Indias surge will do to upset the applecart. Russia will play a big part in this. The Indian Ocean pipeline possibilities could tilt sympathies in the direction of Iran.

There is much change to come in the next 5 years. The U.S. will accept the ultimate roile of not being a single superpower anymore. But then again, that remains the goal of globalization, doesn't it?

[grimm]

Originally posted by Almighty Colin@Mar 5 2005, 01:18 AM
Whenever I read articles like this I wonder why the author didn't take the time to point out historical comparisons and contrasts. Take the US federal debt, for example. It is a record high. But so is the US GDP. On a percentage basis the federal debt is less than it was during World War II. As a percentage of GDP, it is about average for a G7 country. Historically, what has been the result in nations who hold debt around 60%-70% of GDP? How is today's economic situation different and which comparisons are most appropriate?

Low savings rate? Good or bad? What are the historical precedents? Low interest rates mean that money in the bank is not as good of a deal as it once was. Where is that money going? Home ownership, toys or food?

High consumer debt? Same as above. And how does one factor in low interest rates which make borrowing cheaper?

An imbalance in the trade deficit? So if both imports and exports continue to grow steadily but imports grow faster is that good or bad? What are the historical precedents? What is the right balance? What would we do about it anyway? Should we restrict imports with tariffs?

These articles never make the appropriate historical connections and it makes me wonder if the author even knows what they are.
if i could have the rights to that argument, i could use it again and again. i can never answer a question with a question and feel good about it. so i am just going to copy that post and whenever i hear griping about how out of control the debt is, im just going to read it. :)

[grimm]

fwiw, i am actually up late reading about the Ouroboros. my life is boring.

[Winetalk.com]

ok, Grimm,
but how do we make money because of it?

[Almighty Colin]

Originally posted by grimm@Mar 5 2005, 05:16 AM
I believe there is a lot of fear of what 1 billion consumers brought into an already strapped 21st gentury global economy
Yeah, there should be. Especially regarding oil consumption and the potential negative environmental effects involved with converting one billion third worlders into first worlders.

[grimm]

Originally posted by Winetalk.com@Mar 5 2005, 02:21 AM
ok, Grimm,
but how do we make money because of it?
start a cult?:)

[grimm]

or do you mean china. already on it:)

[Winetalk.com]

Originally posted by grimm@Mar 5 2005, 05:36 AM
or do you mean china. already on it:)
FXI?

[grimm]

Originally posted by Winetalk.com+Mar 5 2005, 02:39 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Winetalk.com @ Mar 5 2005, 02:39 AM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-grimm@Mar 5 2005, 05:36 AM
or do you mean china. already on it:)
FXI? [/b][/quote]
nope.

[Almighty Colin]

Originally posted by grimm+Mar 5 2005, 05:43 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (grimm @ Mar 5 2005, 05:43 AM)</td></tr><tr><td id='QUOTE'> Originally posted by Winetalk.com@Mar 5 2005, 02:39 AM
<!--QuoteBegin-grimm@Mar 5 2005, 05:36 AM
or do you mean china. already on it:)
FXI?
nope. [/b][/quote]
Well ... ?

[Rolo]

The problem is not that the world is changing - this is called evolution, and will never stop. The problem is how good you are to adapt to the change.

So far the US have been better than the EU in the new wave of globalization - just the successful "indirect" devulation of the worlds most important currency without turning it into a new world recession have been impressive (and very expensive) to witness.

The energy price is one of the problems where the US goverment failed short term, but in the future I think corporation between the EU and US - ex. the recent market deregulation agreement, will jumpstart the investments in this sector - maybe in 25 years the world energy map have changed drastically, along with who controls it (no more hostage taking by OPEC etc.)

The consumer debt in the US is a problem, but without it most of the world´s economies would be in a standstill - I´m not sure how to improve it without making people "pay" :unsure:

[grimm]

Originally posted by Almighty Colin+Mar 5 2005, 03:02 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Almighty Colin @ Mar 5 2005, 03:02 AM)</td></tr><tr><td id='QUOTE'> Originally posted by grimm@Mar 5 2005, 05:43 AM
Originally posted by Winetalk.com@Mar 5 2005, 02:39 AM
<!--QuoteBegin-grimm@Mar 5 2005, 05:36 AM
or do you mean china. already on it:)
FXI?
nope.
Well ... ? [/b][/quote]
what?

[Almighty Colin]

I happened to come across this paragraph in an article I was reading this morning on one of my favorite sites.

"Capital gains on equities, 401(k) plans, and home values are excluded from measurements of personal saving; when they are added, total U.S. domestic saving is around 20 percent of GDP -- about the same rate as in other developed economies. The national account also excludes "intangible" investment: spending on knowledge-creating activities such as on-the-job training, new-product development and testing, design and blueprint experimentation, and managerial time spent on workplace organization. Economists at the National Bureau of Economic Research estimate that intangible investment grew rapidly during the 1990s and is now at least as large as physical investment in plant and equipment: more than $1 trillion per year, or 10 percent of GDP. Consequently, the size and growth rate of the U.S. economy have been seriously underestimated. In fact, when tangible and intangible investment are both counted, the apparent (and much decried) increase in consumer spending as a share of GDP turns out to be a statistical artifact."

SOURCE: http://www.foreignaffairs.org/20050301faco...retch-myth.html (http://www.foreignaffairs.org/20050301facomment84201/david-h-levey-stuart-s-brown/the-overstretch-myth.html)

[Almighty Colin]

Originally posted by grimm+Mar 5 2005, 05:34 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (grimm @ Mar 5 2005, 05:34 PM)</td></tr><tr><td id='QUOTE'> Originally posted by Almighty Colin@Mar 5 2005, 03:02 AM
Originally posted by grimm@Mar 5 2005, 05:43 AM
Originally posted by Winetalk.com@Mar 5 2005, 02:39 AM
<!--QuoteBegin-grimm@Mar 5 2005, 05:36 AM
or do you mean china. already on it:)
FXI?
nope.
Well ... ?
what? [/b][/quote]
"already on it"