Is our economy fucked?

[Guardsman Bass]

I remember reading that a Japanese minister said they would not trade in their dollar bonds with the U.S., because of the obvious issue that if the US economy suddenly goes to shit, the Great American Market will disappear, fucking up many(including Japan) of the Export-Oriented Economies. Basically, if the dollar were to suffer the fate of the Ruble, you can say good bye to the Asian Economic Miracle.

[Pick]

My personal experience with the dollar in international terms over the last year or so basically boils down to my US dollar going from worth about 121 yen to about 100. I have no idea how much/to what degree this actually reflects the USA's economy, but it sure does tick me off.

[tharkûn]

The dollar has been historically overvalued consistently sense WWII. It was the unwillingness of other countries to revalue their currencies relative to the dollar that helped push for the demise of the gold standard. It isn't the Euro or the Pound that is ludicriously overvaluing the dollar; it is all the Asian currencies purposefully keeping their currencies low to keep the flow of manufacturing into their locale running at full tilt.

What will eventually happen is people will stop buying so many new widgets and the US will still see continued economic growth. Watch that 1.26 trillion in imports dry up as useless Made in China crap stops carrying Walmart's profit margin. Watch brand name sneakers finally die out. Watch instead as American manufacturing slows, halts, or reverses its decline as American wages stop being so market damning.

Yes bad times are ahead, particularly when medicare starts going bust, but Great Depression 2.0 doesn't appear to be in the cards.

[Col. Crackpot]

Back in the 1980's we expierenced a very similar situation, and an equally brilliant economist named Dr. Ravi Barta published the bestselling doom filled prophisy: The Great Depression of 1990. Does everyone remember the great depression we had in the 1990's?

Any crackpot can sell a theory. Hell ,sometimes respected intelectuals sell crackpot theories too!

[Admiral Valdemar]

Economists more than others. There is nothing easily predictable in economics and it can all go the total opposite to what you expect at the last minute, much like the classic phrase with business men mocking weathermen only to then listen to economists and their forecasts.

If it was every truly as easy to predict the economy as these scheisters say, then we'd all be able to become millionaires overnight.

[Elfdart]

Back in the 1980's we expierenced a very similar situation, and an equally brilliant economist named Dr. Ravi Barta published the bestselling doom filled prophisy: The Great Depression of 1990. Does everyone remember the great depression we had in the 1990's?

Any crackpot can sell a theory. Hell ,sometimes respected intelectuals sell crackpot theories too!

Thanks to FDR's reforms, another depression is unlikely. However, in 1990-1992 we did have a nasty period of stagflation followed by a recession where the economic growth rate was the worst it had been since 1937.

I don't think foreign investors will bail unless they want to screw their own economies out of spite. I just hope the American taxpayer enjoys watching more and more of his income taxes going to pay for debt service, because that's what we're going to get. Just like in GHW Bush's term when debt service was the second largest expense in the budget. The money is going down the toilet because someone can't balance a checkbook.

[Darth Wong]

Back in the 1980's we expierenced a very similar situation, and an equally brilliant economist named Dr. Ravi Barta published the bestselling doom filled prophisy: The Great Depression of 1990. Does everyone remember the great depression we had in the 1990's?

Yes. There were heavy job losses at the time and the economy was in bad shape, but then the economy was rescued by the Dot-Comb Boom, which no one could have predicted.

Any crackpot can sell a theory. Hell ,sometimes respected intelectuals sell crackpot theories too!

It's even easier to make generalizations based on what you subjectively view as a laughable error for no good reason, isn't it?

[Coyote]

Another factor that is frequently forgotten-- as more and more Chinese begin earning higher standards of living, their expectations will go up and they will demand better wages as well... soon, all that "cheap labor" will be earning on a par with their American counterparts.

No more cheapo stuff from China. In fact, most of Asia will be in a boat like that. India is slowly headed up the ladder as well. Eventually, they'll be outsourcing their jobs to poor rednecks in Appalacia because of the.... cheap labor pool.

[Guardsman Bass]

Another factor that is frequently forgotten-- as more and more Chinese begin earning higher standards of living, their expectations will go up and they will demand better wages as well... soon, all that "cheap labor" will be earning on a par with their American counterparts.

No more cheapo stuff from China. In fact, most of Asia will be in a boat like that. India is slowly headed up the ladder as well. Eventually, they'll be outsourcing their jobs to poor rednecks in Appalacia because of the.... cheap labor pool.

Don't count on it for a LONG time. While China has at least a decent sized urban class that will expect and demand better wages, the majority of both India and China still consist of hundreds of millions of impoverished peasantry. That means that they will take both the higher wage jobs AND the labor-intensive ones.

[Elfdart]

Another factor that is frequently forgotten-- as more and more Chinese begin earning higher standards of living, their expectations will go up and they will demand better wages as well... soon, all that "cheap labor" will be earning on a par with their American counterparts.

Yeah, they'll start earning as much as Mexicans.

No more cheapo stuff from China. In fact, most of Asia will be in a boat like that. India is slowly headed up the ladder as well. Eventually, they'll be outsourcing their jobs to poor rednecks in Appalacia because of the.... cheap labor pool.

Maybe when they earn close enough to US minimum wage that they no longer offset shipping costs for manufactured goods -i.e. not in our lifetimes.