American Economics Thread


adiru

Junior Member
Registered Member
I do!, do you?

I think they know the jig is up, hence Feds do QE Infinity and money printers goes BRRRRR
Its just matter of time and so its game of chicken now ... with American printing like there is no tomorrow before everything falls off a cliff
 

Tam

Major
Registered Member
I do!, do you?
IMO, if the US dollar crashes, the Yuan would shoot up and become the reserve currency. US and China would switch places in terms of nominal GDP.

The flip side of it for the US side, is that it would shift manufacturing back to the US because it has become a lot cheaper to make things in the US, almost like a third world country. For China, it would become expensive to manufacturer things because the Yuan would be overvalued and won't be subjected to free market forces that can lower it. China will become a net deficit importer instead of exporter.
 

plawolf

Brigadier
USD Petrol dollar and Reserve currency status is unlike to change in the foreseeable future short of some calamitous misstep by Trump, like the US trying to default on China.

Everyone is currently too invested in the current system to change without being forced to do so.

However, what is now clear is that the American economy is ridiculously ill balanced, with the economic benefits overwhelmingly being monopolised by the few in the good and bad times alike, while any pain is outsourced almost exclusively to the rest of society.

It is truly incredible that America can spend such eye watering amounts of money on stimulus and rescue packages and yet still leave the vast majority of American workers with little to no assistance to deal with this pandemic.

As such, I think now the true threat to the American economy and status in the world is now internal rather than external.

How long can the elite keep the masses cowed and distracted while they are being given such raw deals, that are only getting worse was time goes?

In the golden age of American capitalism, the excesses of the few are lauded and celebrated as exemplars of success. The so-called American dream is that you too might have all that ridiculous wealth if Lady Luck smile on your big idea. And that did work, with many garage start-ups leading the way of American technological dominance.

The problem is the elite started to use their power and influence to change the rules in their and their children’s favour.

That has always been the greatest challenge of any society - whether prosperity and advancement brought about by meritocracy can survive the passing of the torch between generations.

It is perfectly understandable for parents to want to give their offspring every advantage to succeed in life, so it’s only natural that the rich and powerful would seek to change the rules of the game to tip the odds as much in favour of their children as possible.

One of the primary responsibilities of government should be to act as gatekeepers and referees to stop them going too far. And that is where America has gone wrong.

Private ownership of the media has by the mega-rich have turned what was supposed to be an impartial protector of the collectively greater good into a political tool of the elite to influence government.

Private ownership of the media has also helped to spawn and nurture another evil of the corruption of academia and the erosion of the public trust in science. If you are mega rich and don’t like the facts, simply pay a no-morals academic to write a total farce of a piece to promote unproven theories and/or attack real scientific facts you don’t like, get your privately owned media to give these extreme fringe players a disproportionately high coverage and undisputed scientific fact suddenly becomes personal opinions and beliefs.

In addition, America’s ludicrously rich political system is the perfect breeding ground for corruption. Cash for favours is effectively legalised and normalised so long as the cash was being paid to election campaigns rather than personal bank accounts, and everyone say the right magical legal words. But for all intents and purposes, the distinction is largely academic.

And this is how we got to where we are today, with the trillions spent overwhelmingly swallowed up by corporations who don’t really need it, which will ultimately end up lining very few, already extremely rich pockets; while ordinary workers see only a token amount and are left to fend for themselves and take the lion share of the economic pain.

That in turn explains the eye watering economic loss figures.

It is pretty clear to any real economist that trickle down economics is a sham created by the rich to benefit themselves. It is literally the masses fighting for the crumbs that falls from the high tables of the elite.

What really boost economic growth is redistributed wealth to the most needy.

Just think about it, if you give a millionaire an extra £10k a month, that isn’t going to mean anything to him to cause him to meaningfully change his existing spending habits. He will most likely just put that money into stocks and shares, or property. That might make GDP figures look nicer, but doesn’t do jack for the real economy.

OTOH, if you give 10 people who are living on the poverty line £1k each a month instead, that will drastically change their spending habits, and they will likely spend the overwhelming majority of that on goods and services, which will carry a multiplier effect and boost the real economy by far more than the £10k you originally put in.

Aside from the humanitarian benefit, it makes economic sense. And it is what the entire World other than America has been doing to help their populations handle the pandemic and necessary lock downs.

Conversely, this utter lack of any real support for ordinary people is why we are seeing so much resistance in America to having a meaningful lock down. Unsurprisingly, this plays right into the hands of the mega rich, who already live in effectively different worlds to the general public, and who can easily protect themselves from even the worst full blown outbreak, but who are inconvenienced by lockdowns.

There seems to be a clear and accelerating escalation trend in the excesses of the elites, the more they get away with, the more they push the boundaries of what they can get away with.

Eventually they will reach the limit of how much ordinary people can suspend reality, and once a tipping point is reached where enough of the population wakes up to just how raw a deal they are getting, and realise that all the safeguards that were supposed to protect them have been perverted into means to deceive and control them, the people will demand a new deal. That is how all the apex powers in world history started their decline. Small and medium powers are conquered, the top empires start their fall when they rot from within first.

A key reason why western elites hates China so much is because China not only represents a potential future threat as the only likely power to surpass the west in overall raw power; it is also a clear and present threat to the careful crafted illusion of the western elite that the western model is the best one possible. China is living proof of the viability of an alternative where ordinary people actually get the lion share of the fruits of economic prosperity. That is an existential threat to the way of life of the western elite, and it is a key reason why the privately owned western MSM is so overwhelmingly and uniformly anti-China.
 

Gatekeeper

Captain
Registered Member
I thought it was 42%?

Please, Log in or Register to view URLs content!
What's a few % points between friends?! Lol
The main point is it's going to be big! Over A third of your economy vanish in the quarter. So in real numbers:

Let's say USA economy is $20T a quarter is $5T. A third of this is $1.7T so the economic size this year, all thing being equal. Will be $18.3T down nearly 10%. That's a big number in anyone's book. And we hope it'll bounce straight back like a V-shaped curve otherwise expect more pain, particularly Trump continues the "trade war fight"!

IMO, if the US dollar crashes, the Yuan would shoot up and become the reserve currency. US and China would switch places in terms of nominal GDP.

The flip side of it for the US side, is that it would shift manufacturing back to the US because it has become a lot cheaper to make things in the US, almost like a third world country. For China, it would become expensive to manufacturer things because the Yuan would be overvalued and won't be subjected to free market forces that can lower it. China will become a net deficit importer instead of exporter.
Lol. Yuan wouldn't be overpriced if market working in a perfect free market way. Any in any case, the Yuan will be the "sun" while other currencies will be the planets that obit around.

China will loose some competitiveness for sure. But it does not necessary mean it will be a net importer overnight. And if and when it does, it'll just print money to pay for it.
 

Gatekeeper

Captain
Registered Member
It is pretty clear to any real economist that trickle down economics is a sham created by the rich to benefit themselves. It is literally the masses fighting for the crumbs that falls from the high tables of the elite.
Wow! Wolfie, what you been on?! Lol. There's so much on your post, I really don't know where to start. So I'll start with my fav when I was a student of economics. The "trickle down economics theory" that was ram down our throats by Reagan and Thatcher. Unfortunately the masses bought it lock stock and barrel in the 1980s. And we know what happened then.

And what you proposing is similar to Keynesian economics. Well, actually more socialistic policy. I'm not saying I'm disagreeing with you. But I just can't see that ever taking root in the USA.
 

Tam

Major
Registered Member
Wow! Wolfie, what you been on?! Lol. There's so much on your post, I really don't know where to start. So I'll start with my fav when I was a student of economics. The "trickle down economics theory" that was ram down our throats by Reagan and Thatcher. Unfortunately the masses bought it lock stock and barrel in the 1980s. And we know what happened then.

And what you proposing is similar to Keynesian economics. Well, actually more socialistic policy. I'm not saying I'm disagreeing with you. But I just can't see that ever taking root in the USA.
Long ago it did, under President Franklin Delano Roosevelt. Long ago, the US did things that today you would think only China and Japan would do such a thing, like throwing lots of money to build infrastructure to get people off unemployment. Guess what? That's why the US got to have such superb infrastructure in the first place.

Long ago, back at the beginnings of the Cold War, the US also gave free college education to anyone so they can become future scientists and engineers. The result is the best generation of scientists and engineers the US ever had, which is why the US became number one.

But that was long ago.
 

Hexon

Just Hatched
Registered Member
Long ago, back at the beginnings of the Cold War, the US also gave free college education to anyone so they can become future scientists and engineers. The result is the best generation of scientists and engineers the US ever had, which is why the US became number one.
The US also realised they would also be giving free education to coloured people and were deathly afraid of a potential Malcolm X inspired black insurgency or growing power bloc- hence why they switched to mass dumbing down of the collective nation and only providing quality education to the rich and the elite, most of whom tend to be of the white persuasion.

@topic
The US is going to have to use its military muscle to maintain dollar hegemony the way it forces japan et al to subsidise US spending by buying treasuries, the only way QE-infinity works is if the rest of the world subsidises US spending its way out of the pandemic.
 

hullopilllw

Junior Member
Registered Member
The US also realised they would also be giving free education to coloured people and were deathly afraid of a potential Malcolm X inspired black insurgency or growing power bloc- hence why they switched to mass dumbing down of the collective nation and only providing quality education to the rich and the elite, most of whom tend to be of the white persuasion.

@topic
The US is going to have to use its military muscle to maintain dollar hegemony the way it forces japan et al to subsidise US spending by buying treasuries, the only way QE-infinity works is if the rest of the world subsidises US spending its way out of the pandemic.
Do you read that US recently does temp treasury swap with 13 foreign central banks ?
To prevent further mass dumping of T bond, the Treasury swap USD directly for foreign central banks' holding of T bonds. Thus the central banks get the liquidity they need, while NAV of t bonds escape the free falling trend of market logic with accompanies dumping.

What escape most people is this, that US treasury is silently attempting to change the nature of T Bond from that of a debt instrument directly into an asset holding. If that happens, US T Bonds debt can be rised to the same level of the world's gdp of about 80+b without any serious consequences.
 

Hexon

Just Hatched
Registered Member
Do you read that US recently does temp treasury swap with 13 foreign central banks ?
To prevent further mass dumping of T bond, the Treasury swap USD directly for foreign central banks' holding of T bonds. Thus the central banks get the liquidity they need, while NAV of t bonds escape the free falling trend of market logic with accompanies dumping.

What escape most people is this, that US treasury is silently attempting to change the nature of T Bond from that of a debt instrument directly into an asset holding. If that happens, US T Bonds debt can be rised to the same level of the world's gdp of about 80+b without any serious consequences.
Intriguing; can i get a source i can read further into this? Seems like a very dishonest tactic that would have most sovereign natures in an uproar.
 

Top