|
Discussion Topic: America's Cultural Downfall (pg. 2)
|
View this Thread in Original format
| occrider |
| quote: | Originally posted by zarathustra
Could this recent downturn simply be caused by cyclical economic phenomena, worsened somewhat by recent world events? I'm no economist but I am an optimist. |
The business cycle? I think so. Capital flight has simply not occured nor do I think the conditions warrant it happening in the near future.
Is Better Economy Ahead? Key Gauge Up
Thu June 19, 2003 10:43 AM ET
WASHINGTON (Reuters) - A key U.S. economic forecasting gauge posted its largest increase in a year and a half in May, pointing to a possible recovery after months of timid growth in the world's largest economy, a private research firm said on Thursday.
The Conference Board said the index of leading economic indicators rose 1.0 percent in May, above expectations of Wall Street economists who had forecast it to rise 0.6 percent.
In April, the index rose only 0.1 percent as the U.S. economy continued to battle a slowdown brought about by the Sept. 11, 2001 air attacks on the U.S., corporate scandals and fears surrounding the U.S.-led war in Iraq.
"The Leading Economic Index finally points to a recovery almost a year and a half after the end of the recession," the board's chief economist Ken Goldstein said in a statement.
"But dangers present in the first five months of the year have not disappeared completely. Chief among them is a lack of business confidence."
While timing for a recovery in business investment, on which hinges much of the economy's recovery, is still undetermined, the conditions for a pick-up are in place, according to Salomon Smith Barney analyst Christopher Wiegand.
"We are starting to see a pickup in demand, a drop in the cost of capital and the new tax incentives will also definitely help," he said. "But the timing remains somewhat uncertain."
Businesses have not been investing as much as before the economic slump. Economists believe that if companies invested more, the economy would greatly benefit from higher rates of productivity growth and a more solid labor sector as firms would create more jobs.
The coincident index rose 0.1 percent in May after being flat the previous month.
The lagging index, a measure of past trends in the economy, fell 0.1 percent in May after a 0.4 percent drop in April. |
|
|
| Shakka |
Hey Occrider--
unemployment #'s came in today better than expected! Still over 400K in initial unemployment claims though:(. That makes 15 straight weeks over 400K. Perhaps the economy is just normalizing at a higher level of unemployment after the greed and bubble environment of the late 90's. I maintain that we're in a cyclical bull market within a secular bear market. Rupert makes some good points though they're rather dire, while you make some excellent points, though potentially a bit optimistic. Who knows though, you may both be right for all I know. :gsmile: |
|
|
| occrider |
| quote: | Originally posted by Shakka
Hey Occrider--
unemployment #'s came in today better than expected! Still over 400K in initial unemployment claims though:(. That makes 15 straight weeks over 400K. Perhaps the economy is just normalizing at a higher level of unemployment after the greed and bubble environment of the late 90's. I maintain that we're in a cyclical bull market within a secular bear market. Rupert makes some good points though they're rather dire, while you make some excellent points, though potentially a bit optimistic. Who knows though, you may both be right for all I know. :gsmile: |
Well I agree with rupert in the long term ... if the debt level isn't addressed I think there could potentially be a severe economic repurcussions. However, I think if it were to occur, capital flight would flock to China or the Asian markets rather than Europe. Europe isn't doing too well right now. At any rate, it's true that the labor force is still contracting, however, like the article said, I think that conditions are right for a rebound as long as Business confidence returns and companies begin to reinvest in capital. Interest rates are so low, they have to begin reinvesting! |
|
|
| Shakka |
| quote: | Originally posted by occrider
Well I agree with rupert in the long term ... if the debt level isn't addressed I think there could potentially be a severe economic repurcussions. However, I think if it were to occur, capital flight would flock to China or the Asian markets rather than Europe. Europe isn't doing too well right now. At any rate, it's true that the labor force is still contracting, however, like the article said, I think that conditions are right for a rebound as long as Business confidence returns and companies begin to reinvest in capital. Interest rates are so low, they have to begin reinvesting! |
You're right about interest rates--but so far 12 interest rate cuts have been pretty ineffective in stimulating investment, they've only served to stave off a more severe recession. What's worse, when they cut rates next week, which is all but a certainty, the money market industry will be roiled. I agree though, at some point businesses have to invest, but if there is no end demand for stupid gadgets like camera phones and the replacement cycle for PC's continues to be sluggish, you end up with the growth companies still sitting on inventories with little reason to invest in anything new. There have been a few encouraging sins, however, which is at least a bit comforting. I'd love the economy to pick up and the market to run (god knows my 401K needs it!), but I only want it to happen if it's based on strong underlying fundamentals and not some head fake that ends up collapsing on itself, which is what I believe the current rally will probably end up doing if the Fed decides to quit pumping liquidity into the market or simply runs out of ammo. |
|
|
| rupert |
If anyone is interested these provide useful context material.
http://www.financialsense.com/trans...draWithCRB4.pdf
Is a glossy chart outlining the historical effect of the Kondratieff wave. Kondratieff was a Russian economist who assessed that economies go up and down in long term cycles. We are now in the bottom of the Kondratieff cycle. The last bottom of a Kondratieff cycle was in the 1930's. Kondratieff also believed that major outbreaks of hostility are tied to these cycles, ie wars start or are more likely to start during the troughs and not the peaks of the cycle.
The theory of long term economic cycles doesnt hold much favour nowadays but I think it has a great deal of validity.
http://www.imf.org/external/pubs/ft...df/chapter2.pdf
A study of what happens when asset bubbles burst (ie the stock market crash)
I also have a reference to another study done in 2001 tracking in detail long term changes of US stock prices which if its assessment is true would indicate that the S and P 500 has a long way yet to fall. The document is on my work computer and I cant remember its title but I can get it next week. |
|
|
| dEsidEL |
putting all the economics aside for a moment, I'm just wondering how everyone here thinks the US decline will come to be? Since every nation, empire, etc. will eventually have their time.. would this one come suddenly or gradually .. ? and how/why ? :D
(ps. i'll have to read all the economic data some other time since i just finished a course on it last semester and it's the last thing i wanna see right now!) :p |
|
|
| Galapidate |
| I think it'll come to a decline when more money is spent on reality TV and pop music than the military :D |
|
|
| DrummeRaver86 |
| quote: | Originally posted by dEsidEL
putting all the economics aside for a moment, I'm just wondering how everyone here thinks the US decline will come to be? Since every nation, empire, etc. will eventually have their time.. would this one come suddenly or gradually .. ? and how/why ? |
Well, I think that in this day and age, a fall like Rome or Greece will not occur. There are many economic safegaurds in aplce, and the fact that we elect a new president every four years ensures that politic will no completely fail. For a superpower like the US to fall is kinda inconcievable. Maybe it's because we ARE so powerful that it seems like it could never happen.
As for a cultural downfall, I can see that happening. But that would require another post by itself.
:toothless |
|
|
| Galapidate |
| lemme guess, you'll start that post :) |
|
|
| DrummeRaver86 |
| quote: | Originally posted by Galapidate
lemme guess, you'll start that post :) |
I will...soon!:) |
|
|
| dEsidEL |
| quote: | Originally posted by DrummeRaver86
Well, I think that in this day and age, a fall like Rome or Greece will not occur. There are many economic safegaurds in aplce, and the fact that we elect a new president every four years ensures that politic will no completely fail. For a superpower like the US to fall is kinda inconcievable. Maybe it's because we ARE so powerful that it seems like it could never happen.
As for a cultural downfall, I can see that happening. But that would require another post by itself.
:toothless |
wells i know what you mean .. but nonetheless, would you agree that the US has only been the sole superpower for maybe the last 15 years or so .. ? I don't think its decline would come so suddenly like the fall of Rome or Greece, which actually wasn't that sudden if you think of it. But yea I'd say it's pretty inconceivable at this point, however they've only been on top for so long. I'm sure at the height of Rome's power, one would have probably said the same at that time.. ? |
|
|
| DrUg_Tit0 |
Hmm, if it were to fall, I'd say it would happen this way:
First the EU should gain superpower status which is near that of the US.
Now, if that happens the world economy will no longer be dependent on the dollar, but other currencies, mainly euro, would become equally acceptable. That would hurt the US economy, and in turn make it a less appealing place to live in. Since a large majority of US scientists are foreigners, and mainly of european descent, that development of situation would cause major scientists to want to live in the EU instead of the US. That would make the US lose its technological advance over the rest of the world. The only thing that would remain would be a large army, which would gradually be reduced, due to its expenses. As time goes by, a new generation of uneducated and largely uncapable americans would take the lead of the country, which would ensure its further decline. America would then become dependant upon agricultural exports, as it would loose its supremacy in all other areas. Now, since midwest is the primary source of wheat for america, it would gain much importance. The american capital would eventually move to the bible belt, and more and more radical christian leaders would get in power. Tensions would grow high, and eventually radical christians would incite a revolution, which would result in a newly established theocracy. Those major corporations that still were in the US would immediately retreat to other countries, mainly the new superpowers like the EU, Russia, or China. The arab world would in the meanwhile enter a new reign of prosperity, as american support of radical regimes would disappear, and people would overthrow islamists and dictators. Arab countries would unite to form a new country, the Union of Arabic States (UAS). Some of the US companies would retreat to that area as well, since the opressive religious regime in the US would not allow them to function normally. That would result in a radical decline of funds, and soon wheat exports would not be enough for the american economy to sustain itself. Farmers would largely resort to the opium plantations instead, as wheat farms would not generate enough money to sustain their large christian families. Also, a growing anger would spur in people, an anger which the radical clerics would direct against the EU and the UAS as the main source of evil. A new wave of anti-muslim sentiment would arise, and the masses would want to get rid of arabic influence over the american christian lands. A new radical terrorist organisation, called PNAC (Project for the New American Century) would rise out of the anonimity, and would start attacking european and arabic targets worldwide. In the meanwhile, the rest of the world would be astounded by the barbarian behaviour of the PNAC, like destroying centuries old statues of 4 american presidents in South Dakota, largest presidential statues in the world. Anyway, after some major terrorist attacks, the EU, the UAS, Russia, and China would enter a coallition and attack the US. The US army would no longer present a problem, as their nuclear weapons became unusable due to lack of maintainance. Soon, after a quick war, the US would be split into 4 sectors, the Alascan sector (Russia), the Western sector (China), the Southeastern sector (UAS) and the Northwestern sector (EU). Soon, those sectors would officially become territories of the new superpowers, and the name USA would no longer exist in history books. |
|
|
|
|
