tag:blogger.com,1999:blog-3950127.post7548576169355138320..comments2009-12-10T22:56:20.130+01:00Comments on Euro Watch: The Dollar As A Funding CurrencyUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-3950127.post-35147576461421138012009-11-07T19:21:07.181+01:002009-11-07T19:21:07.181+01:00Sorry, are you saying that it is your opinion that...Sorry, are you saying that it is your opinion that US GDP is now in long term permanent decline, with capacity being systematically destroyed, and money and people (which is ultimately what capacity is) being redeployed in other parts of the globe where growth will occur?<br />'''''''''''''<br /><br />Hello Edward,<br /><br />Not a permanent decline, but long term as the captured US govt., Treasury dept. and Fed. reserve attempt to put the toothpaste back into the tube, extend and pretend,prop up failed entities etc.<br /><br />The problem as I see it is that capacity is NOT being systemically destroyed. Cheap dollars provided by the Fed, home buyers credit being extended and provided to those making up to $225k and other programs to delay price discovery are not destroying capacity but propping it up, waiting for a full recovery to heal all wounds.<br /><br />Outflows of dollars are being deployed around the globe or in US Treasury debt. See record bank reserves and unprecedented declines in US consumer credit. As to the people in the US being redeployed, your guess is as good as mine. The amount of applicants per job opening, those unemployed for 6 months or longer are at record levels. Job losses have of course slowed but, hiring as contracted faster. The US military though is having no problem meeting their recruitment goals as exports from US defense contractors outperform. Hint?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3950127.post-44549125733029858602009-11-07T09:18:19.153+01:002009-11-07T09:18:19.153+01:00Hi,
"This is a false assumption made by many...Hi,<br /><br />"This is a false assumption made by many."<br /><br />Sorry, are you saying that it is your opinion that US GDP is now in long term permanent decline, with capacity being systematically destroyed, and money and people (which is ultimately what capacity is) being redeployed in other parts of the globe where growth will occur?Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-3950127.post-46946570438696054492009-11-06T18:48:12.101+01:002009-11-06T18:48:12.101+01:00" has left capacity utilization rates at a ve..." has left capacity utilization rates at a very low level"<br /><br /><br />This is a false assumption made by many. What has the US produced more than anything else over the last 20-30 years? Consumer debt. The pulling forward of demand is taking it's last gasping breaths in the form of Cash for Clunkers, home buyer credits, etc. <br /><br />A structural change in the US economy is clearly underway. Pre-crisis levels of capacity are moot. The so called output gap no longer applies in the new paradigm. <br /><br />With this in mind, inflation, or better said stagflation, with high UE, falling wages and even higher commodity prices will occur sooner than most think.Anonymousnoreply@blogger.com