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Post by unlawflcombatnt on Feb 25, 2007 19:07:12 GMT -6
This is a link to a very well written, and easy to understand blog/site called Financial Reality
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Post by blueneck on Feb 25, 2007 20:48:14 GMT -6
Great site
I have been saying this about Greenspan for years, too easy credit and artificially low interest led to the housing bubble, and deficit spending at the macro and micro level, and disincentives to save
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Post by unlawflcombatnt on Feb 26, 2007 3:59:28 GMT -6
I liked his article on The Perfect Storm. He states " Consumer spending is already beginning to weaken. As the housing bubble collapses, increased borrowing against property will no longer be an option, further reducing consumer spending. Retail employment is showing negative y-o-y growth, a condition that has, in the past, always been associated with recession...." He further states that consumption would have to drop over 10% to eliminate the negative savings rate, even if income stayed the same. This adjustment would lead to a 15-20% decline in GDP.
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Post by jeffolie on Feb 26, 2007 11:55:41 GMT -6
How do you register for the site?
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Post by unlawflcombatnt on Feb 26, 2007 17:08:34 GMT -6
How do you register for the site? Jeff, I don't know the answer to that question, but I posted that question at the site. Hopefully I'll get an answer in the near future.
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Post by blueneck on Feb 26, 2007 17:22:08 GMT -6
Indeed - the trade deficit and consumer debt spending are closely related, and directly attributable to Greenspans policies.
As we shift from an economy that actually produces to one that mostly consumes - look for debts and imbalances to continue to rise.
All the growing economies of the world produce, the stagnant and declining ones consume - sounds like stating the obvious, but so many do not see or understand this. The US is on this path.
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Post by unlawflcombatnt on Feb 27, 2007 5:17:20 GMT -6
All the growing economies of the world produce, the stagnant and declining ones consume - sounds like stating the obvious, but so many do not see or understand this. The US is on this path. It seems like this should be obvious. But current consumer & business behavior makes it appear less than obvious. This is a message that does need to be repeated as often as possible.
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