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We're buying more stuff, the economy must be getting better.

Discussion in 'BBS Hangout: Debate & Discussion' started by Cohete Rojo, May 1, 2013.

  1. Cohete Rojo

    Cohete Rojo Contributing Member

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    Now that the millenials (echo boomers) have jobs, they will start to spend money in the coming years to lift the US out of depression. Do you buy it?

    From Barron's:

     
  2. SamFisher

    SamFisher Contributing Member

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    My spending is your income, and your spending is my income.
     
  3. Haymitch

    Haymitch Custom Title
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    Damn you, Foster and Catchings. Damn you.
     
  4. Cohete Rojo

    Cohete Rojo Contributing Member

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    Made in China.
     
  5. SamFisher

    SamFisher Contributing Member

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    Doesn't matter.
     
  6. Classic

    Classic Member

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    I'm buying it.
     
  7. Cohete Rojo

    Cohete Rojo Contributing Member

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    Capital flows no longer matter? So even if wealth flows to the wealthy while everyone else loses purchasing power that is ok?
     
  8. SamFisher

    SamFisher Contributing Member

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    Sure, income inequality matters - but in response to a different question.
     
  9. Cohete Rojo

    Cohete Rojo Contributing Member

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    Something similar has happened in Europe where it appears Germany has hoarded all the money and left its neighbors in debt. Trade with foreign nations is fine, but is our economy really based on buying stuff from abroad?
     
  10. SamFisher

    SamFisher Contributing Member

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    Yes, our economy, and pretty much everybody else's except for maybe North Korea's, is based on buying and selling globally - that's not going to change.
     
  11. Dairy Ashford

    Dairy Ashford Member

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    Yeah; boredom, advertising, volume, traffic and tips/markup, just like Kettle on a Sunday morning. The worst analysts are probably the ones who predict permanent shifts: bullish or bearish, to the economic cycle.
     
  12. Space Ghost

    Space Ghost Contributing Member

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    Apparently some believe that going further into debt is a sign of a healthy economy.
     
  13. mc mark

    mc mark Contributing Member

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    [​IMG]
     
    1 person likes this.
  14. SamFisher

    SamFisher Contributing Member

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    Many people believe that increased economic activity, including lending is a sign of a healthy economy, such as every single economist ever, or anybody with even a rudimentary understanding of economics be it formal or informal.
     
  15. Cohete Rojo

    Cohete Rojo Contributing Member

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    Credit is money but debt is a drag. US debt to GDP ratio is 3.5 and that does not include leverage. At the height of the credit bubble it was closer to 4 and much of it is private debt. So it is a double-edged sword: spend more now and save less for later. Rising household income would be a better sign of economic health than just personal consumption and debt.
     
  16. Classic

    Classic Member

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    I thought it was interesting that the article said that between Gen X & Y in the coming years, their net worth could grow from $2 tril to $28 tril due in part to death/inheritances.

    Couple that with the growth in domestic O&G and Im feelin good about the future. Still doesn't mean things can't be better.
     
  17. Dubious

    Dubious Contributing Member

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    The effect of the US printing mo' money should be inflation. I have an unscientific theory that since the money is being distributed world wide, over billions of people instead of 350 million people, we are only seeing negligible inflation in the US. We can print money to pay debts almost ad infinitum, as long as the the dollar remains the world's currency. China's economy will eventually become dominant but there is something to be said for the safety of the world's strongest military and most stable government system.

    Need a tanker of oil? swap some green paper for it. Need a container ship of refrigerators? here's some dollar's credited to your account. The people getting relatively richer though are the no income workers who now make sweatshop wages. They are doubling their incomes where American workers are only increasing by low single digits, So, the inflation stays overseas.

    It can and will change, but probably not in our children's lifetime.

    //no economist
     

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