Originally posted by bymy141 I travel a lot and news always is different in the various parts of the world.
Today, driving from Brussels home to the Netherlands, there was an elaborate analysis of the US economy on the radio.
The economists were openly speculating on a fore coming bankruptcy of the USA.
They combine a number of recent developments to substantiate their argument:
• a further and ever faster devaluation of the dollar,
• the still growing sub prime financial crisis,
• the fast dropping of US real estate prices,
• the rising cost of trade insurance with the US and wrong answer by the FED (decrease of interest instead of increasing interest),
• the unbelievable high and ever growing USA trade deficit, without a policy to correct this problem in the foreseeable future,
• the lowering of taxes instead of lowering national budgets and increasing taxes,
• the complete lack of trust in the banking system,
• the rising cost of oil,
• the growing industrial and financial role of India and China becoming more important to world economy than the USA.
Are there any Americans out there that would like to comment on this?
Do you believe it could happen? Do people hear such analysis in the US media as well?
Will you guys be able to allow yourself a K30D in 2009?
- Bert
Bert,
Thanks for the doom and gloom
In answer to European speculation: Anything is possible, but in todays media coverage few look at cyclical history and few have any interest in ontent and context of their spew of information to the general public.
On your topics:
#1... Sure the dollar is falling. Sure does piss me off with respect to taking the long and extended Italian Holiday I was looking forward to. Nonetheless, the Euro currently is right where it was when it came in to being against the American Dollar. Roughly 1 Euro to 1.50 American. And yes there has been a massive dip in the Euros value during that time to about 1 Euro to .76 American. But this type of valuation has always been longitudinally in constant fluctuation. In time the pendulum will swing in the other direction.
#2... We had this same shit hit the economic scene under President Carter back in the early 80's where Amercans bailed out their overspending Savings and Loan (kinda like banks) to an inflation adjusted amount that exceeds todays blip on the radar screen of sub prime.
#3... Idiots who bought into interest only mortgages or who bought home that exceeded the standard 25% of their take home... sorry... got what they paid for. Realtor and bankers ultimately don't give a crap about anything but cash and for those not using day to day common sense on what they can afford... well, unfortunately they pay the price and hopefully will learn... next time.
#4... Tariffs? Its about time the US started putting tariffs on certain goods.
#5...Trade deficets? Well, as long as we continue to elect officials who live in Washington...FOREVER... the less likely the willl seem inclined to control expenditures. After all, the government doesn't work for profit... it can tax any amount that it wants to and the public does not appear to want to do much to stop them... mainly because we are a country that it turning into a handout country that wants everything for nothing.
#6... The government has plenty of money. They don't need to tax more. They DO need to learn to stop spending what they don't have and they also need to stop raiding SS funds and health care funds.
#7... Banking. Has anyone ever trusted the banking community? We are hostages. And what is the alternative... becasue people with power (and money) tend to stay in power (Sorry Elliot Spitzer... for you that isn't the case).
#8... The rising cost of oil... at least in the US is almost 100% a result of a 50% devaluation of the dollar over the pst two years. Since the $ is the currency of purchase then said devaluation would make the 110 dollar a barrel oil today only $55 if non deflated over the past tow years.
#9... China and India are a percieved threat. But that is truly of minor concern. These nations have a right to growth, better quality of life and standard of living. In an ideal world all countries will benefit from their emergence. No need to have a xenophobic world
In the end, the world (US any way... though I think Europe does it too) goes through these cycles every 6-8 years. The sky always falls for a year and revoers and does well for the next 7 or so. As FDR said , "We have nothing to fear but fear itself." So, don't worry be happy.
One other thing. Most people in crisis in the US today are people that have not learn to manage their income correctly or how to handle their finances and to live within their means. Their are times in life where, when you want something, you take stock of your assets and say no or sacrifice some other percieved need as a trade off. There are few common folk (9-5'ers) who can have it all and then be prepared for retirement.
Down from the soapbox now.
Stephen