January 4, 2011 SouthAmerica: My crystal ball still is very foggy these days, and I would be lying to you if I told you that I understand how it works the new economic system adopted by the United States in 2008. It is very hard to make any intelligent predictions when today we have a new economic system adopted here in the United States based on stock market manipulations, massive U.S. government intervention and nationalization of major sectors of the US economy. It does not matter how bad things turn out inside the US economy in 2011, including a collapsing muni bond market, widespread unemployment, exploding foreclosure market, declining property values, and in 2011 the new Republican governors are going to cut the budget of their states to the bone in a major effort to speed up the implosion of the US economy into a black hole. But in 2011 the US economy depends more than anything else on the new creative and innovative actions by Ben Bernanke and the Federal Reserve. There's no limit to their creativity regarding all kinds of US government intervention and manipulation of the markets. The mainstream media keeps hyping how the US economy is recovering, but in the real world that is pure BS and nothing else. The reality is the US economy has been down the toilet, and it will get even worse in 2011. In 2011 we also can look forward to a proliferation of tariffs, quotas, exchange control, and the next level of the current "Currency Wars". Anyway, there is only one thing to look forward in 2011 that will provide great entertainment to all of us, and we are going to have great time when we watch the new megahit on C-SPAN: âThe Ron Paul and Ben Bernanke Showâ Regarding my long term forecast: the years 2008 to 2015 it could be the equivalent to the US economy to the period late 1980's to early 1990's represented to the Soviet Union = the end of the road. The implosion of the US economy could take even a little longer, because of the status of the US dollar as the major foreign reserve currency. It's just a matter of time for the global financial markets to grasp the new realities regarding the future of the US economy â then we will have the final meltdown of the US dollar and the end of an international monetary system based on the US dollar. Anyway, today when I think about the state of the US economy the first thought that comes to mind is an imploding Soviet Union, and its economic system. .
excellent work Humpy ... with the exception that SA is correct and the only thing that I would add is that 2011 will make 2010 look relatively stable. "cheer up, things could get worse" and sure enough they did
Thx jjf I agree more or less with SA too. The US and Europe etc. need radical changes to compete. Without these changes to get more competitive the future looks bad. But I doubt the pain is strong enough yet on the politicians and bosses to effect significant changes yet though. More time wasting cosmetic changes and hot air They fiddle while the situation deteriorates Nothing new here then Time will tell
Well the curious thing is that most assets remain in place, it is only their values that are questionable. Over time these values will come into line .... a little inflation and little writedown .... should only take a few years. What does change though is who holds the money when the music stops and it won't be the middle class.
Yes, we are in new territory. I think the jury is out on whether the bernank's magic actually has worked. To have the US economy return with the throes of some type of new technology/killer app/ have to have product would paint most of us doom-mongers as ridiculous. The biggest surprise is how long this process is continuing. This might be the new normal for the next 20-30 years as far as I know. I have less of a clue than most, you know. While there might be a day of reckoning, everyone else might go through theirs first, so everything in this brave new world is relative. But for the near term, you can't fight the fed. But as opposed to the bond and currency markets, perhaps that maxim is best applied to the equity markets now.
The Industrial Revolution did not happen overnight in Europe. US escaped all this and so it's industrial growth began off a clean base in the north whilst the south remained largely agricultural. Starting 1870's US manufactured goods started arriving in Europe at an acceptable quality and a very very good price ... the outcome in some parts of England Europe on local manufacturing was not a pretty sight. In fact it resembled the manufacturing transfer of the last decade or two from US to Asia. The double whammy now is US rolls seamlessly from this transfer into the Information Age restructuring.
Nice to find someone with a good grasp of practical economic history. Many of the answers imho are to be found from studying similiar situations from the past. Most of the politicians are so busy self serving and stuffing money into their own accounts they are likely to fail the country in a crisis such as this. True the senile economies are rushing into an information age, but what if the internet was to become unstuck ? This could be from hostile hackers or just overload. The Googles, Facebook etc. could become near worthless overnight. I wouldn't want too many eggs in that basket. Also apparently the GPS system is very near the end of its working life and failures are becoming increasingly relevent. Can we rely on the Russian or Chinese systems ? Probably not. Will they charge ? I expect so.
If the USA can get its debt troubles figured out, the economy will be just fine. As long as Bernanke can avoid deflation and the subsequent USA default, the economy will be just fine. I'm not saying the USA economy will be booming any time soon, and I'm not saying that other countries won't catch up. But I strongly believe that the odds of a self-imploding total economic collapse are very low. The fear is way overdone by the mongers.
1) Mine ain't and it's actually quite easy. 2) ?.....it must be a good time to short-sell some EWZ. :eek: