  Accraghana Member Username: Accraghana Post Number: 51 Registered: 07-2007 |
So is Michigan still in a “one state’ recession? I hear Florida’s economy is now in a recession as well. Soon there will be many others joining Michigan as the nation goes into recession. The thing that people need to understand is that the economy is a behavioral science to a large degree. Hence, influencing the behavior of consumers is key to steering the direction of the economy. Consequently, one must realize that optimism, from leaders and economist, is often a strategy to promote economic consumption, just as lowering interest rates or cutting taxes (monetary and fiscal policy) is designed to do. So one should take, or should have taken, the rhetoric of the Federal Reserve Chairmen, talking head economist on news programs and incumbent politicians with a grain of salt. Contrary to what talking heads are saying, the FUNDEMENTALS are NOT solid. Unfortunately the fundamentals are like the structural integrity of interstate 35W over the Mississippi river in Minneapolis. Our economy could collapse at any time, sending people and businesses crashing below. Structurally America is weakening economically and it has been every since we went on the “fiat” system of currency and off the gold standard which regulated the money supply. Now we are just printing money to attempt to keep the bridge from falling. Now everyone is debt, households, national, state and local governments and the like from all this borrowed money that we keep spending due to “leaders” and Pharisees telling us that everything is great….so keep borrowing and spending despite your income not keeping pace with the growth of the debt. There are so many other ominous signs that I don’t feel like going through the effort of listing. Suffice it to say, however, the calamity will hit when the FED raises interest rates which it will eventually have to do or the dollar will crash from the over worked printing presses flooding the financial markets with liquidity and devaluing the currency. Inflation is the natural consequence of liquidity and that is why that is the FEDS current fear. As soon as the raise interest rates……the parties over. | ||
Jazzstage Member Username: Jazzstage Post Number: 33 Registered: 08-2007 |
It is certainly interesting to hear about foreclosures now becoming a national phenomenon. Remember when "Canadian money at par" was a way US bars could encourage Canadian's to drink here? Well, it now appears Canadian money is nearly at par with US currency everywhere. http://www.x-rates.com/d/CAD/U SD/graph120.html | ||
Charlottepaul Member Username: Charlottepaul Post Number: 1386 Registered: 10-2006 |
"since we went on the “fiat” system of currency and off the gold standard which regulated the money supply." If this is the case (which it is), why isn't there really any inflation? | ||
Sturge Member Username: Sturge Post Number: 64 Registered: 05-2007 |
Troubles a brewin' http://www.cnn.com/2007/BUSINE SS/08/10/global.markets.reut/i ndex.html | ||
Johnnny5 Member Username: Johnnny5 Post Number: 567 Registered: 06-2005 |
I don't believe Florida's economy is in a recession. Their housing market is a disaster, but the majority of those losing their homes are the ones who bought at the peak of the bubble (Many whom were speculators showing up late for the party). In Michigan we never really had a bubble, yet many are seeing their homes go into foreclosure. Same problem, but definitely a different situation. | ||
Accraghana Member Username: Accraghana Post Number: 52 Registered: 07-2007 |
Charlottepaul,I think inflation is maintained because the printing of money, which is inflationary by nature when it exceeds rates of production, is offset by imports from nations with low levels of pay that helps keep prices down. Also, the calculation of the official rate of inflation is spurious and debatable. The government tends to use “core” inflation rates which supposedly excludes commodities that fluctuate based upon seasonal changes, for example, food and energy. I think for the typical American, with the rapid rise of health care cost, college education (more of a necessity), home prices (not anymore), gas, food and other necessities, it would be hard to convince many that REAL inflation is running at around 3 to 3.5 percent annually. | ||
Accraghana Member Username: Accraghana Post Number: 53 Registered: 07-2007 |
Johnny, it might be helpful to note that CONSTRUCTION, particularly housing, has driven economic growth disproportionately in the nation since 2000. Certainly Michigan has not enjoyed a residential/condo construction boom to drive our economy…..that would not make sense in a state that is barely maintaining, if not loosing, population. On the other hand, Florida had become a speculative market for residential construction which created a construction boom with the easy financing.. Now, the lending market has changed and construction projects and jobs are drying up…..along with the jobs that go with them. Florida’s economy is tourism, retirement and construction. The GDP of Florida was artificially stimulated through speculation and easy financing of projects. Now their GDP is contracting as the speculative activity and construction….and jobs are diminishing. That does not mean that Florida is in a depression or really bad condition….however. |
