The United States averted a financial catastrophe but sustainable recovery depends on redirecting the economy away from consumption, a top White House economic adviser said Friday. In excerpts of remarks prepared for delivery on Friday, Lawrence Summers also defended President Barack Obama's "ambitious" policy agenda, saying it would lay the foundation for future prosperity. Watch Live: White House's Summers on Economy "We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss," Summers said in excerpts of a speech released by the White House. "Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago." Summers said the rebuilt U.S. economy must be more export-oriented, with less of a focus on consumer spending and the sort of financial engineering that has been blamed for contributing to the current economic crisis. The economic recovery should be "more middle-class-oriented and less oriented to income growth that disproportionately favors a very small share of the population," he said. http://www.cnbc.com/id/31964152 Hello currency markets ! Summers gave just the start sign for some nasty currency volatility ! Every currency trader should be excited for the years to come !
"Export oriented?" Total BULLSHIT! Empty words to appease the masses. We'd love it to be so, but there's not a "snowball's chance in Hell" of EVER developing an overall net exporting economy so long as there is a cheap labor alternative in Asia. He deserves 20 lashes for blowing smoke up our skirts...
OK, and since the Obama administration undisputedly wants to increase the size of government, which of those increased government services are you going to export? * Cap and Trade regulation and oversight? * National health care regulation? * Acorn - getting out the vote? * A new government run GM is gonna be able to compete against Toyota, Honda, VW where the original could not? * banks, whose salary levels on the trading desks are capped at below industry standard? So please give one example of new government expansion that some other country or entity in some other country would want to pay for. Oh, I sorry, I forgot. All the geniuses in Washington have MBAs. My mistake. :eek:
? What do they have to do with the "labor cost differential" between the US and low labor cost countries?
First of all...this entire bubble has been propped up by those "low labor countries" purposefully keeping their currencies artificially weak. That ponzi scheme has been exposed. China is not going to be able to continue to do this indefinitely. At some point they will reach the breaking point. They already realize they are screwed on that front. The "expensive" labor countries like the US have a real advantage right now with a true floating currency. I think you're going to find the wide gap between costs greatly narrowing in the next decade and companies will realize that the increased risks of doing business in unpredictable governments is no longer worth the much narrower costs. Summers is spot on in his entire analysis.
TOTAL BALONEY! The labor cost differential is WAAAAAAAYYYYYYYY more than the currency differential. The US would have to devalue its currency to 5% from its current value to be cost-competitive.
Spot on ! Now that´s what I meant with my initial remarks. If China can play this game, why not the US, too ?
Why would the US want to "play this game" and have an artificially weak currency? Ultimately that would bankrupt nearly all US citizens. Short of genocide, the WORST thing a government can do is debase its currency.. The US disadvantages nearly ALL US citizens with any and all efforts to make our currency worth less...