I am surprised to say that I am somewhat interested how that will turn out
American Economics Thread
- Thread starter Bernard
- Start date
I know what you mean. It's a strange feeling. You know he's going to be so wrong on so many levels in defending the indefensible, yet we still wants to see how he's going to do it.
So here's looking forward to Sumo wrestler performing on the parallel beams. Lol
A short answer is it could. But a deeper look is the recession. With the US economy nose diving. Demands for anything is lower than what it was before the recession. This lower demand feeds into lower inflation as the pressure for goods and services have reduced.
In classical economic theory, a reduction in demands leads to lower prices and lower quantities consumed.
But if the lower prices translate to layoffs or wage reduction, then you'll get deflationary spiral.
Hi caudaceus,
Or stagflation with the value of dollar being lower resulting in higher import cost?
America is doomed i'm telling you the truth.
The fatal flaw in the US economy is that over the past 40 years or so that the center of gravity in the economy has shifted from production to speculation. Production and productivity are no longer the leading causes for economic growth or wealth and prosperity creation but instead it has become asset price inflation. The economy is now ever more dependent on asset prices to inflate and during this pandemic the whole thing has kicked in to overdrive.
While small businesses are closing, production is down and people are losing their jobs left and right the stock, bond and real estate markets are making all time record highs because of the easy money coming from the FED. Asset price inflation doesn't create real wealth but instead a "wealth effect". That 119 trillion dollar household wealth is largely paper wealth that consist of overvalued assets like stocks and real estates. Once the market correct that "wealth" will simply evaporate.
The US has one of two choices now they can either continue down this path of inflation which means more debt, zombie companies, moral hazards and market distortions. This will lead to either a forced collapse or hyperinflation down the road. In the short run this will lead to more inequality and inflation and thus more social unrest.
Or they can end the craziness now and allow the markets to correct its self by pulling the stimulus. In that case you will see the collapse of the major banks, corporations, hedge funds, pension funds and mutual funds. Leading to a collapse in the tax collection. Then they will have to reduce or even end a lot of the welfare programs and public services that the US government is now providing to its people.
The reason this will happen is that the corporations have been borrowing trillions to prop up their own stocks and the banks and other financial institutions have either lent them the money to do that or they themselves are sitting on those same overinflated assets. So when the whole thing corrects they too will be dragged in to the same vortex of doom.
All those people who have a mortgage loan, credit card debts, student loans, car loans or even a running credit line for a small business will be caught with their pants down. Because interest rates will rise and their incomes and net worth will shrink.
Things in the US have gone on for too long and the Americans will have to pay the price either one way or the other.
Things doesn’t look to good right now, I wonder though, what will it take to sink this house of cards, the election? Or maybe a civil war since I do know the western media tries to down play it but the riots haven’t yet stopped
manqiangrexue
Brigadier
Unofficial US unemployment rate may be over 25%, new data reveals
Graig Graziosi, •October 13, 2020
New labour data suggests the "real" in the US may actually be 26.1 per cent.
The data defines anyone who is looking for full-time work that pays a , but who cannot find it, as unemployed. Current unemployment numbers tend to disregard individuals who make far less than a living wage and those who have stopped looking for work.
If the definition is expanded further to include anyone over the age of 16 who is not earning a living wage, the number inflates to 54.6 per cent. For black Americans, that number is even larger, 59.2 per cent.
Since the recession, only 46.1 per cent of white Americans over the age of 16 have a full-time job that pays more than $20,000 annually. Only 40.8 per cent of black Americans under that criteria have a full-time job making more than $20,000 annually.
The official unemployment rate in September was 8 per cent, down from 14.7 per cent at the height of the coronavirus pandemic in the US.
That number does not account for the nearly 700,000 people who have stopped looking for work after losing their jobs during the pandemic, nor does it account for the decrease of the labour force to 160.1m people in September. In August, the labour force was 164.5m people; that missing 4.4 million is not counted in the unemployment numbers.
According to data from the US Bureau of Labour Statistics, there were 24.2 million people who reported that they were unable to find work as a result of their employer closing or due to business losses due to the pandemic.
The number of people receiving unemployment benefits should reflect the unemployment rate. However, the current unemployment numbers suggest there are 13.6m people unemployed, even though 26m people are still receiving unemployment benefits.
Temporary Unemployment Now Permanent for Nearly 4 Million
Gabrielle Olya, , October 13, 2020
When the initial wave of job losses hit the U.S. due to the coronavirus pandemic and related shutdowns, many of these losses were considered temporary — there was a belief that employment numbers would rebound . However, the latest employment data seems to indicate that these “temporary” job losses have turned permanent for millions of Americans, CNBC reported.
Currently, nearly 13 million Americans are unemployed — up roughly 7 million from pre-pandemic levels. Although many Americans have returned to work — the unemployment rate is about half of what it was in April — “permanent” job loss is increasing. At the height of unemployment in April, more than 18 million people were on temporary layoff and were expected to be called back to work. That number is now just 4.6 million, or about 37% of the unemployed. And as of September, the number of permanent job losses was 3.8 million. Taken together, the numbers seem to indicate that
Graig Graziosi, •October 13, 2020
New labour data suggests the "real" in the US may actually be 26.1 per cent.
The data defines anyone who is looking for full-time work that pays a , but who cannot find it, as unemployed. Current unemployment numbers tend to disregard individuals who make far less than a living wage and those who have stopped looking for work.
If the definition is expanded further to include anyone over the age of 16 who is not earning a living wage, the number inflates to 54.6 per cent. For black Americans, that number is even larger, 59.2 per cent.
Since the recession, only 46.1 per cent of white Americans over the age of 16 have a full-time job that pays more than $20,000 annually. Only 40.8 per cent of black Americans under that criteria have a full-time job making more than $20,000 annually.
The official unemployment rate in September was 8 per cent, down from 14.7 per cent at the height of the coronavirus pandemic in the US.
That number does not account for the nearly 700,000 people who have stopped looking for work after losing their jobs during the pandemic, nor does it account for the decrease of the labour force to 160.1m people in September. In August, the labour force was 164.5m people; that missing 4.4 million is not counted in the unemployment numbers.
According to data from the US Bureau of Labour Statistics, there were 24.2 million people who reported that they were unable to find work as a result of their employer closing or due to business losses due to the pandemic.
The number of people receiving unemployment benefits should reflect the unemployment rate. However, the current unemployment numbers suggest there are 13.6m people unemployed, even though 26m people are still receiving unemployment benefits.
Temporary Unemployment Now Permanent for Nearly 4 Million
Gabrielle Olya, , October 13, 2020
When the initial wave of job losses hit the U.S. due to the coronavirus pandemic and related shutdowns, many of these losses were considered temporary — there was a belief that employment numbers would rebound . However, the latest employment data seems to indicate that these “temporary” job losses have turned permanent for millions of Americans, CNBC reported.
Currently, nearly 13 million Americans are unemployed — up roughly 7 million from pre-pandemic levels. Although many Americans have returned to work — the unemployment rate is about half of what it was in April — “permanent” job loss is increasing. At the height of unemployment in April, more than 18 million people were on temporary layoff and were expected to be called back to work. That number is now just 4.6 million, or about 37% of the unemployed. And as of September, the number of permanent job losses was 3.8 million. Taken together, the numbers seem to indicate that
@ansy1968
Yep. As Keynes said, a vicious spiral. But fortunately Keynes also said and can be observed empirically that prices are sticky downwards. It is very hard to see price deflation (It is not impossible, but hard. Firms tends to cut production to keep prices at the same level). Which is why even in a recession, there's still inflation thought small.
And worse of all, it's the stagflation, the kind we, the older ones experienced in the 1970s. Where the economy is stagnating, and with this the price level should drop to adjust itself according to classical economists. But it never did, so we got a contraction in the economy couple with hyper inflation. Oh happy times! Lol
Oh yep. Trump is winning on the economy and trade war! Lol