My Economic Outlook

[ChristopherNJ]

If the banks can't get the newly allocated money into consumer hands (credit crisis), than the inflationists have a difficult argument.

Problem with it all is the length of time used to determine each action. Some say we had an inflated period in the last 4 years and this is the pullback before it gets inflated more (very possible). Some say we have been inflating away since the early 1940's and we hit the peak (bad news unless a new bunny is pulled out of the hat, remember Nixon removing us from the gold standard, that was a bunny).

Right now, the world is telling me we go sideways at best, but down is easiest. I believe the DOW will go lower. When, don't know. To me, it's all in the money supply and everything is just noise. Unfortunately, I still hear a distant alarm sounding. You do understand that every action and/or ploy (checks in the mail, mortgage plan, Fed liquidity injection, etc..) is to stimulate a debt based economy. Again, reason those actions fail because (the consumer) i.e. you, me, her, him (those holding up the banking system) refuse more credit and don't need the central banks to expand the supply. The banks need us (main sucker in the compound interest equation) or they go poof. Banks will do whatever possible to create a bunny. That's my cue to put capital to work.

[acmanko]

well, we could just save for what we want. An interesting thing has returned, the old lay-away plans have started to popback into vogue

[Andy Schoen]

Banks will do whatever possible to create a bunny.
And we follow the white rabbit? :p

[Tool-Slinger]

Obama raises taxes on my competitors:

They raise labor rates and I follow with less a tax increase, hence more profitable.

Obama slows world economy with socialist agenda:

Gasoline stays low and I throw less money down the fuel-tank, a major expense for me.

Value of the dollar continue to decline, the minor debt I have is becoming a pittance.

I win. I am not a supporter of obama, nor do I think he is good for USA or the rest of the world, but the short-term looks great for me.

[desto1]

2 trillion dollars, none of it to kick start the economy,the banks are too busy consolidating,and now the fed barron robbers refuse to disclose who is getting what.
http://www.prisonplanet.com/fed-hides-destination-of-2-trillion-in-bailout-money.html

[Tool-Slinger]

I think this guy says it best for me and so much more:

http://www.youtube.com/watch?v=fSo2GsxMSYs

I thought obamarang and the dumbocrats had the idea to rob from the rich and give to the poor. Now then they are wanting to give money to the auto-makers and banks. is that about the biggest flip-plop ever? I thought the evil corporations were gonna supply all this obamawelfare we were hearing about. Whatever happened? Now taxes from regular folks are being shoveled by the ton to the evil corporations.... Seems pretty crazy to me.

Are democrats communists or in the pocket of robber-barons? Or both somehow?

[JRINJAX]

I think this guy says it best for me and so much more:

http://www.youtube.com/watch?v=fSo2GsxMSYs

I thought obamarang and the dumbocrats had the idea to rob from the rich and give to the poor. Now then they are wanting to give money to the auto-makers and banks. is that about the biggest flip-plop ever? I thought the evil corporations were gonna supply all this obamawelfare we were hearing about. Whatever happened? Now taxes from regular folks are being shoveled by the ton to the evil corporations.... Seems pretty crazy to me.

Are democrats communists or in the pocket of robber-barons? Or both somehow? The Dems are made of so many diverse radical groups, they are like a cattle stampede. They might go in one direction for a while but eventually they will fan out and trample everyone....

[acmanko]

The Dems are made of so many diverse radical groups, they are like a cattle stampede. They might go in one direction for a while but eventually they will fan out and trample everyone....
not everyone, just republicans. Independents seem to like their chances

[cehs]

If I could just KEEP my share of the $850 Billion relief, I could pay off my house.... ? :eek: ;) :D

:)

[adrianf]

Posts: 6845



Re: Damn F@#n Sh*tty G*D Mot%$er Economy!!!!!!!!!!!!!!!!!
« Reply #109 on: Yesterday at 07:35:45 pm »

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The news keeps getting better and better

From the Motley Fool

http://www.fool.com/investing/international/2008/11/12/why-chinas-stimulus-plan-will-change-the-world.aspx

Why China's Stimulus Plan Will Change the World
By Bill Mann and Tim Hanson
November 12, 2008
Comment (28)

64 Recommendations

Brazil's President Lula told his country in September, "People ask me about the [financial] crisis, and I answer, go ask Bush. It is his crisis, not mine."

Fifty days later, British Treasury Secretary Stephen Timms told a conference of G-20 nations gathered in Sao Paulo, Brazil: "We are in extraordinary times, the global economy is facing shocks which are wholly without precedent and we need a new approach. … It is a global crisis. It therefore requires an international response."

In other words, what goes around, comes around. Global schadenfreude toward a stupid and greedy United States and its subprime mortgage meltdown has rapidly become global concern about how to rescue the world from an all-encompassing financial disaster. Here's just a smattering of companies large and small that recently announced lowered outlooks for the year: Under Armour (NYSE: UA), News Corp. (NYSE: NWS), Starbucks (Nasdaq: SBUX), Vodafone (NYSE: VOD), Electronic Arts (Nasdaq: ERTS), ADP (NYSE: ADP), and Hormel (NYSE: HRL). (Yes, in these tough times, even the outlook for Spam is grim.)

And if that were not enough, the International Monetary Fund (IMF) recently lowered its outlook for the entire global economy.

One country's plan to step up
Against that backdrop, China announced a 4-trillion-yuan ($586 billion) stimulus package for its domestic economy this past Sunday. It plans to fund extensive infrastructure construction, aid poor farmers, and cut export taxes.

While China's plan has clear beneficiaries, and should help keep more laborers in their jobs and prop up domestic consumer spending, the most important (and underreported) aspect of the plan is how it will fundamentally change the economic relationship between the U.S. and China.

Here's how it was
One of the big debates over the past half-decade was whether China had reached a point in its economic development at which its internal economic gravity would allow it to "decouple" from the global economy. If so, it could continue along its fantastic growth trajectory, even as growth in the U.S. or Europe ceased or reversed.

That may sound like gobbledygook, but it's important. The U.S. has a $20 billion monthly trade deficit with China. It's funded by China's willingness to hold U.S. treasuries in its Central Bank (essentially, we're borrowing the money). China manages the arrangement by pegging its currency (the yuan) to the dollar at an artificially low rate, and by not worrying so much about certain niceties like environmental regulation and labor protection.

It's a mutually beneficial arrangement -- a weak yuan supports Chinese exporters, helping the country industrialize and quickly integrate rural migrants into its urban workforce, with the salutary effect of keeping inflation and potential political unrest low. For its part, the U.S. has gotten dirt cheap financing, by virtue of China parking more than a trillion dollars in U.S. government securities. That has supported the dollar and allowed the Federal Reserve to fuel consumer spending by keeping interest rates low.

China's stimulus package heralds the unwinding of this relationship.

Here's how it will be
This is why the decoupling argument matters. Many analysts have pointed to the thousands of factories that have shut down in China in these past few months as evidence that a slowdown in American spending will cause a depression in China -- potentially even leading to regime change. But in fact, our trade imbalance with China is artificially preserved by the aforementioned currency peg, and by the decision of China's state-run banks to make uneconomic loans to businesses it deemed worth propping up.

China has paid heavily for this relationship. Rather than invest its surplus cash in its own country, the Chinese poured money back into the U.S. to further spur our debt-fueled consumption. (Put less artfully, some poor Chinese guy in Shaanxi province was essentially helping you pay your mortgage.)

The announced stimulus package reverses that. Hundreds of billions of dollars that would have gone to propping up the greenback are now being reinvested in China, helping it to transition from its reliance on exports to a self-sustaining economy. So while China isn't yet decoupled from its export markets, this new spending plan will help it along that path.

What you need to do to survive
China's huge currency reserves are about to be put to use, and while there will be some real and perhaps severe bumps along the way, the China that comes out on the other side will be a heck of a lot stronger, more independent, and more decoupled than the one we've seen up to now.

Chinese premier Wen Jiabao called his country's stimulus the "biggest contribution to the world." We don't know whether that's true, but we do know that China's ability to reach deep into its huge coffers to finance further growth gives it a significant advantage over the rest of the world's struggling economies. This is why we continue to believe in the Chinese miracle, and why we think more American investors should be taking advantage of this current temporary downturn to diversify their portfolios into previously expensive Chinese stocks.

[kim]

The China syndrome may be a good thing, but they still own a good portion of America.

Our national debt did not bother people who did not want to pay their fair share of taxes during good times. It might bite our butts during bad times. Look at your history books. England was aurguably the #1 power in the world before WW1. They declined markedly after WWII. Most economist say it was due to their high national debt. Ours is getting close to what theirs was.

My economic outlook is pretty good. My house will be paid for in less than 1 year, even after substatial cost to improve it. Every car in my driveway is paid for with an average of 50K on the odometer. My last kid gets out of college after 3 more tuition payments. My timeshare is paid for. I think I have as close as you can get to a recession proof job.
I am increasing my contribution to my IRA to the max amount. When the stock market rebounds, my retirement will be set.

I will never be rich in material possessions, but I do not have the robber barron mentality for that.

[JRINJAX]

"A recession-proof job" must be a codeword for a Government employee.