This page has been archived and commenting is disabled.

Guest Post: GDP - The Warning Signs From Exports

Tyler Durden's picture




 

Via Lance Roberts of Street Talk Live,

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 10/27/2012 - 21:24 | 2924695 Deathrips
Deathrips's picture

What the hell do you mean? We are exporting all kinds of physical gold and inflation. Thats the Checkmate.

Sat, 10/27/2012 - 21:42 | 2924717 The Next Millen...
The Next Millennium is Now's picture

There is one other thing we have been exporting. We've been sending our currency overseas for years, too bad no one wants it anymore. Better put your water wings on, a US dollar Tsunami is headed this way.

Sun, 10/28/2012 - 00:02 | 2924826 CPL
Sun, 10/28/2012 - 00:30 | 2924841 LetThemEatRand
LetThemEatRand's picture

Let's hope it's a fizzle.  Any update on this?  Are you local?

Sun, 10/28/2012 - 09:14 | 2925038 CPL
CPL's picture

No, I'm in the path of Sandy is all, deep in the Ottawa Valley.  All the Druids in this neck of the woods are gathering to chant at it right now.  I opted for the non chanting route and put things away and get some firewood inside the mud room.  This type of weather, this time of year = massive ice storm.  Not cold enough for snow, too cold for rain.  We're going to lose power as usual.  Country living in rural Canada, predictable.

 

Otherwise something weird happening in Mexico City.  An anon pointed out that a massive Class 1 just "materialized" over mexico city.  Trying to find someone down there on a terminal to talk to.  Might just end up spamming all the cell phones with a "look up and take a picture please" text.

 

http://www.weather.com/weather/map/interactive

 

What ever it is.  It's huge or a software glitch.

Sun, 10/28/2012 - 09:22 | 2925047 CPL
Sun, 10/28/2012 - 09:49 | 2925072 tip e. canoe
tip e. canoe's picture

what's up with that missile dropping into volcano?   after effects or something else?   hard not to be skeptical without another view.

Sun, 10/28/2012 - 10:08 | 2925078 tip e. canoe
Sun, 10/28/2012 - 10:42 | 2925129 CPL
CPL's picture

Was that the sink hole/nuclear depot thing?  That whole area is riddled with old undocumented coal/silver/copper mines.  People been crawling around under the dirt there for 200 years looking for rocks.  

 

The missle or laser beam thing is pretty fantastic though in the MX volcano.  There are other angles of attack on it.  The Volcano is a major tourist attraction next to the ruins in that neck of the woods.  Very pretty country...well until Mexico city then people crawling over one another for a piece of room.  Redskin and Narco Anons are reporting the military is all over the place right now and you can't hear anything.  No bugs, no birds.  

 

It looks like a graphical representation of the Fibonacci numbers on radar.  http://en.wikipedia.org/wiki/Fibonacci_number

 

Physics/Math anons are seeing if there's anything in that.  :-\

 

Well smoke'em if you've got them.

Sun, 10/28/2012 - 10:55 | 2925152 tip e. canoe
tip e. canoe's picture

re: KY, nope something different, an amateur astronomer just caught this thing in the sky.   just happens to have the same exact shape as what dropped into the volcano.   find it especially interesting that CNN chose to report on it.

that spiral is still on the intellicast as of 10:50 a.m.  bizarre.  it's like a radar version of a crop circle.

please keep us updated if you hear anything from on the ground down there.   could be nothing, then again, given the times, anything's possible.   no bird or bug sounds is kinda creepy.

gracias amigo.

Sun, 10/28/2012 - 12:53 | 2925394 economics9698
economics9698's picture

If you businessmen and women want to cut to the chase look at the fiat economy since 1971.

Basically when we import more the economy is strong. We are selling paper, foreigners want to export to us, our consumers have credit, they want to spend, the trade deficit increases as US consumers buy more imports.

The opposite has been happening in 2012 a reversal from 2011.

http://research.stlouisfed.org/fred2/series/NETFI?cid=108

We have a “traditional post 1971” weaker economy in 2012 than in 2011. The 2% is inflation bull shit number printed for the election. The Feds usually get the inflation by not adjusting the manufacturing numbers correctly.

That was some good work by Lance Roberts and it always is a help when the business community smokes out the bull shit coming from Washington.

Sun, 10/28/2012 - 14:27 | 2925549 Curt W
Curt W's picture

That is a big mountain, what ever that was I would say over a hundred feet long.

Sun, 10/28/2012 - 09:28 | 2925052 CPL
CPL's picture

http://www.intellicast.com/Local/WxMap.aspx?location=USCA0982&weather=hd...

 

It's not a glitch....wonder what the hell it is.

Sun, 10/28/2012 - 09:28 | 2925053 tip e. canoe
tip e. canoe's picture

looks like the norway spiral ;~)  the wunder satellite has a cyclone over pacific coast but nothin over MexCity.   maybe the elves playin a funny?

 

Sun, 10/28/2012 - 09:38 | 2925060 CPL
CPL's picture

http://smn.cna.gob.mx/radares/catedral/catedral_anima.php

 

...Nope.  

Three seperate weather services confirming what the Mexicans are calling Temoaya.  If wearing a tin foil hat, Temoaya is Mexican (not spanish) for Landing Place.  Anons are reporting a weird assed humming noise that is coming from everywhere.

 

Weird.  Interesting though.  All the sat services are showing this thing "pulsing".

 

Street cams indicate business as usual.  http://www.telmex.com/mx/corporativo/vialidad_inicio.html

 

Weird....the cam is a radar station on the catheral and merely reports whats in the air.

Sun, 10/28/2012 - 09:13 | 2925039 GetZeeGold
GetZeeGold's picture

 

 

Ben Shalom exports subsidized gold and the wirld still hates us.....well screw me!

Sun, 10/28/2012 - 05:30 | 2924959 MachoMan
MachoMan's picture

Sitting in Kauai...  will update from the ground tomorrow, but as best I can tell they got out early on the tsunami warnings and there will be minimal damage...  hopefully no lives lost and everything is insured.  Listened for the long waves, but didn't hear and it was raining, so I didn't go out on the lanai to watch.

No telling what kind of shit from japan is going to pop up now...

Sun, 10/28/2012 - 15:58 | 2925741 MachoMan
MachoMan's picture

Kudos to the early warning systems and their associated persons...  gave folks at least 2 hours warning...  looks like a big nothing burger, but better to be safe than sorry. 

Sun, 10/28/2012 - 09:10 | 2925036 DaveyJones
DaveyJones's picture

we over everything - look, spend, weight...

Sat, 10/27/2012 - 21:43 | 2924720 Atomizer
Atomizer's picture

I was supposed to log off.. :(

 

 

[That’s the Checkmate] Or when your international creditors ask you to pay up your debt loan in full. 

Do you think the District of Criminals will start destroying their taxpayer funded property? Nope, but let’s pretend.. LOL

 

Man Destroys Home to Avoid Foreclosure

Sat, 10/27/2012 - 22:08 | 2924743 Pure Evil
Pure Evil's picture

Ok, here comes the obvious:

 

You didn't bulldoze that.

Sun, 10/28/2012 - 09:16 | 2925043 GetZeeGold
GetZeeGold's picture

 

 

Don't do it yet...we don't have the shovels ready!

Sat, 10/27/2012 - 23:44 | 2924816 Stuck on Zero
Stuck on Zero's picture

Our major exports are coal, raw materials, recycled materials, food, and just about anything else that makes up the exports of a third world country.

 

Sun, 10/28/2012 - 09:16 | 2925044 GetZeeGold
GetZeeGold's picture

 

 

Screw jobs......that coal crap has got to go!

Sat, 10/27/2012 - 21:34 | 2924708 RiverRoad
RiverRoad's picture

The US sheeple never had a rat's chance in hell once Nixon opened up China.  From that point on we had to devalue our currency and move towards becoming a third world country ourselves in order to compete.  This was fine for the banksters, the FED, and the 1%, but for the rest of us....not so fine.

Sat, 10/27/2012 - 23:49 | 2924817 LetThemEatRand
LetThemEatRand's picture

Very true.  The conservative/Randian talking point (repeated in part in this article) that the US thrived in a higher tax/union environment in the '60s because of WWII damage to Europe is beyond sophomoric.  How long does it take to build an industrial plant?  How many years does it take to rebuild a railroad? A few at most.   If the US economy thrived because of the destruction of European/Japanese infrastructure, it would have lasted only a few years.  WWII ended decades before the US had its peak and then began to slide.  The eventual slide had everything to do with the erosion of the U.S middle class due to free trade with low wage/no environmental regulation countries, and nothing to do with the factories we bombed to shit decades earlier.  

Sun, 10/28/2012 - 08:44 | 2925026 yt75
Sun, 10/28/2012 - 08:54 | 2925029 Poor Grogman
Poor Grogman's picture

Totally clueless comment as usual.
The only way that a developed country with an economy based on FIRE and service industries with a rapidly expanding money supply can keep it's domestic inflation under control is to lower the cost of it's consumer items, and the best way to do that is to offshore it to a low wage country.

This is THE curse of Central banking and FIAT currency and has nothing to do whatsoever with "Randian" anything....

Working on a sunday must be tough mate, I hope your overtime is worth it...

Sun, 10/28/2012 - 03:08 | 2924907 Cast Iron Skillet
Cast Iron Skillet's picture

It wasn't just Nixon opening up China. The corporations were willing accomplices in moving manufacturing to China and other countries with lower labor costs.

Sun, 10/28/2012 - 07:28 | 2924994 Ghordius
Ghordius's picture

can you really fault them? it's the way they are designed. or, better, the way our polities allow them to be. to maximize profits for their shareholders (even though they often maximize the power of their directors more) and not that of their common employees.

never heard of a cooperative shipping jobs to overseas. Of course the typical co-op has to pay full taxes while a globe-spanning multinational...

Sun, 10/28/2012 - 08:04 | 2925003 Cloud9.5
Cloud9.5's picture

Don't forget our transition from oil exporter to importer.

Sat, 10/27/2012 - 21:35 | 2924709 The Next Millen...
The Next Millennium is Now's picture

Fasten your seatbelt,

It's going to be a long, rough ride to the bottom

Sat, 10/27/2012 - 22:55 | 2924727 philipat
philipat's picture

Yes, Globalisation has been great for the Corporatocracy but NOT so great for Main Street. Even Soveriegn States have not done so well because the Corporatocracy does not pay taxes anywhere, using Transfer pricing and IP fees to transfer profits into Tax Havens. Where they stay.

Actually, logically, and this will never happen because the Corporatocracy (Including Wall Street) OWNS Congress, The US is a large enough market to be able to close its borders to all but essential imports (Energy etc.) and demand that all consumer goods be manufactured in The US. Yes, prices would rise BUT incomes would also rise commensurately such that purchasing power would be restored and unemployment would fall. This approach would NOT be in the best short-term interests of the Corporatocracy (Lower profits from higher manufacturing costs), however, so will never happen. But, and I never thought I would be putting this protectionist arguement forward, it WOULD be very much in the best interests of the average American citizen and help restore the balance back in favor of "We the people".

Actually, ultimately, it would also be in the best interests of the Corporatocracy also because people with money and security consume more, but they can't see this because it would involve thinking further than the present quarter's results.

 

Sun, 10/28/2012 - 00:03 | 2924825 LetThemEatRand
LetThemEatRand's picture

I disagree with only one point.  Trade is good, so long as it is with countries that have roughly equivalent labor and environmental laws, anti-trust laws, and accountability for making dangerous products.  Trade with similarly minded economies fosters competition and innovation and discourages other types of corporate misconduct such as monopolistic behavior, planned obsolescence, and the creation of shitty knock offs such as Chinese drywall, Chinese tires, Chinese food containing toxins, etc.

Sun, 10/28/2012 - 01:46 | 2924865 philipat
philipat's picture

Fair enough. But, with the exception of corn and Boeings, does the US actually make much that anyone would need or want to buy??

Sun, 10/28/2012 - 01:50 | 2924867 LetThemEatRand
LetThemEatRand's picture

The U.S. still owns the intellectual property for everything from Chevys to Ipods (though it is seriously compromised from offshoring).   It could retool in 2 years and start making all of it again if we got off the idea that slave labor etc is necessary so that CEOs could make hundreds of times the hourly wage of the workers.

Sun, 10/28/2012 - 02:08 | 2924876 philipat
philipat's picture

That was my original point. Regarding the second post, who needs Chevy's (Once you have driven a Merc or BMW there is no going back) and who needs AAPL when Samsung etc make better products at better price points?? The US makes nothing that the rest of the world needs except food and Boeings (Including military stuff, but I question if that is actually a need). Incidentally, the US discovered neither the jet engine NOR the Internet.

Better just to close the borders, make all the stuff that Americans want at home and leave the rest of the world alone.

Sun, 10/28/2012 - 02:27 | 2924887 LetThemEatRand
LetThemEatRand's picture

I call bullshit on the internet.  U.S. invention.  And Samsung may make a better mouse trap (depending on who you ask), but the concept of the smart phone was invented in Washington State.  And most technology we all use today would not exist but for NASA.  Got GPS?  Got a microchip?

Sun, 10/28/2012 - 03:13 | 2924910 Cast Iron Skillet
Cast Iron Skillet's picture

The Internet was most certainly a U.S. invention created with DARPA funding. However, the HTTP protocol, which enabled the World Wide Web, was invented by Timothy Berners-Lee, a British scientist who worked for CERN.

Sun, 10/28/2012 - 09:07 | 2925035 fijisailor
fijisailor's picture

I've driven merc and BMW.  They are unreliable and short lived pieces of shit.  I own a Japanese made 2000 toyota echo with over 350,000 miles with only tire and brake replacements.

Sun, 10/28/2012 - 14:40 | 2925564 Omen IV
Omen IV's picture

this entire economic debacle was predicted 20 years ago when the WTO was being discussed and not yet enacted - the powers that be  - starting with Greenspan and Rubin knew what would happen

the only solution is exactly what you speak to  - which is create a Common Market  (CM) of those countries with "equivalent" labor costs and regulations - which is Western Europe (EEC) and the USA and Canada for manufactured goods where labor content is above x% - this CM would have almost 800 million people which has the breadth to be self sustaining - a closed loop if you will - which would yield a perpetual wheel of demand - Commodities excluded - then over time allow other countries to enter "if" their wage rates are raised to prevailing wage rates of existing common market participants. all others would have 40% tariff.

with this mandate in place - done January 1, 2013 within 24 months the means of production would be transferred and the increase in GDP would be a moon shot - problem of government deficits and funding over !

 

 

 

Sun, 10/28/2012 - 19:26 | 2926118 emersonreturn
emersonreturn's picture

OmenIV, very interesting.   i fully expect a few down arrows, but until a resource as lucrative as oil is discovered, possibly begin with tax free havens...along the Hong Kong model.

Sun, 10/28/2012 - 08:08 | 2925004 Cloud9.5
Cloud9.5's picture

You better get the old geezers that know how to run the plants back before they die off.  There has been no transition of skills to the younger generation.

Sun, 10/28/2012 - 09:44 | 2925069 TPTB_r_TBTF
TPTB_r_TBTF's picture

 

... or ...

... hire Chinese consultants to run the American plants.

Sun, 10/28/2012 - 04:21 | 2924936 AnAnonymous
AnAnonymous's picture

Trade is good, so long as it is with countries that have roughly equivalent labor and environmental laws, anti-trust laws, and accountability for making dangerous products. Trade with similarly minded economies fosters competition and innovation and discourages other types of corporate misconduct such as monopolistic behavior, planned obsolescence, and the creation of shitty knock offs such as Chinese drywall, Chinese tires, Chinese food containing toxins, etc.

_______________________

Lets keep that into the family.

Well, one could wonder where 'americans' are going to manufacture their goods if every country has their own environmental laws.

Environmental laws as set in 'american' countries serve one essential purpose: make sure that the consumption of resources at the periphery of the empire are consumed first before the resources located at the center.

'Americans' run an extortion of the weak, farming of the poor business, a kind of business coercion and the capacity of is vital. With projection of force being a functional of oil availability, it is vital to go along with the diminishing of oil availability, that is consuming resources far from the center first to later follow the slow contraction motion toward the center.

Sat, 10/27/2012 - 21:57 | 2924733 Yen Cross
Yen Cross's picture

Not your Fathers economy. LMAO.  Autos and Residential investment per % of GDP.

It should read( X-Boxes and Slurpies) per % of GDP!

  Atomizer made me do it. The blue and red line convergence tells it all!

Sat, 10/27/2012 - 22:52 | 2924777 Atomizer
Atomizer's picture

Do you want to know what’s really fucked up?

Interpol already knows about this multifamily power struggle, yet they turn a blind eye.

http://www.interpol.int/ 

Such a sad world we’re enslaved to! Not really, but we must pretend to be prognostic thought criminals. My number is 4934687. 

Hehehehe

Sat, 10/27/2012 - 21:57 | 2924734 SafelyGraze
SafelyGraze's picture

the only safe place to be is deep in the woods where the stump-grinding Land Drones will never find you

Sat, 10/27/2012 - 21:59 | 2924736 Yen Cross
Yen Cross's picture

Is it "FIAT" certified? Those stumps can get pretty tall!

Sat, 10/27/2012 - 22:09 | 2924744 philipat
philipat's picture

Yes, I drive a FIAT (500), but what does that have to do with anything??

;-)

Sat, 10/27/2012 - 22:16 | 2924753 Yen Cross
Yen Cross's picture

 Did you get the pop-up tent and propane toaster options? ;-)

Sun, 10/28/2012 - 01:06 | 2924851 hidingfromhelis
hidingfromhelis's picture

Hmmm, seeing it in a suburban alley/driveway made me think of future applications...like taking care of that shadow inventory issue.  Intentional?

Sat, 10/27/2012 - 22:13 | 2924751 Pure Evil
Pure Evil's picture

Great for crowd control when the oppressed riot over the election of Obamney.

Sun, 10/28/2012 - 09:29 | 2925056 GetZeeGold
GetZeeGold's picture

 

 

The CIA has orders to stand down.......so it could get ugly fast.

Sat, 10/27/2012 - 22:46 | 2924771 DoChenRollingBearing
DoChenRollingBearing's picture

I have two new items at my blog:

 

"Review of Barron's -- Dated 29 October 2012"

and

"Preview Of Coming Posts And A Request..." (in which I mention some topics I want to write about and solicit your help!).

http://tinyurl.com/9hlvzdx

 

 

Sat, 10/27/2012 - 23:37 | 2924810 lasvegaspersona
lasvegaspersona's picture

Do Chen

fofoa has been discussing silver and just did  a 4 part comment: message...50 cent silver is in our future...

Sun, 10/28/2012 - 09:30 | 2925058 GetZeeGold
GetZeeGold's picture

 

 

Just another reason bath salts should be banned.

Sun, 10/28/2012 - 02:16 | 2924882 SafelyGraze
SafelyGraze's picture

"I have two new items at my blog"

and *I* have two new items in *my* blog

but enough about me

let's talk about you

here

have another glass of sham-ponya

I insist

 

Sat, 10/27/2012 - 23:33 | 2924805 lasvegaspersona
lasvegaspersona's picture

"we saw a decrease of $0.3 Billion in exports in 2Q GDP. This was a 110% decrease from the previous estimate of a $3.1 billion increase.  This decrease in exports is very important"

how can numbers in this range mean ANYTHING????, They are rounding errors to the Bernacke printing press!!!!

Sun, 10/28/2012 - 06:55 | 2924980 disabledvet
disabledvet's picture

yeah, no shit. A 300 million dollar decrease in a single quarter of trade is statistically significant? wow, David Rosenberg's a real genius! And, oh yeah...we'll just ignore the entire energy patch and "feel sorry for Main Street" which has been booming now going on 20 years! The fact of the matter is the only reason GDP was so good this quarter was because of "evil defense spending" which is all part of the internal demand dynamic created when the Cold War began "which was built and designed by the Government to get us out of the Depression"...and every other Depression that might come up thereafter. I fail to see why the policies enacted in 2008 seem surprising to anyone. It's what this country has been doing since the nasty recession of 1948...and nothing new at all. Once the "programming code is initiated" and this "recovery" runs its course however then you start to see differences from "expectations vis a vis previous recoveries." We're not talking merely the "lack of jobs" here. I do agree there is a profound lack of output period coupled with the continued enslavement of income earners to failed State policies equals default risk going parabolic. so far "the hits have kept coming"....starting in Qatar and that real estate boondoggle and now having smashed the entirety of Japan, the entirety of the Middle East and the entirety of Europe. That leaves only China and the USA with legitimate growth prospects RIGHT NOW (which by definition is your forward looking indicator) hence "what happens to the Chinese Central Government and the Chinese Communist Party is very important." What was reported in the New York Times just two days ago was the the Chinese Premier has looted China of tens of billions of dollars...which obviously is true of the hopelessly small group of so called "Communists" still left. this makes that regime look more and more like Mexico day by day...a revolution waiting to happen and as such the massive defense spending in the USA looks to continue to apace to me. Such spending is very good for energy plays...and is very good for food plays as well. Of course who could have predicted that the price of natural gas...the most valuable resource of our age...would have collapsed? That's like predicting "a true natural gas powered vehicle platform being put forward by the entirety of the Big Three is only a year away...

Sun, 10/28/2012 - 00:58 | 2924848 AmCockerSpaniel
AmCockerSpaniel's picture

Free Trade ain't Free. Just what does it take for you people to understand that. We pay for Free Trade with jobs. And with out jobs we can afford nothing. The only ones making money (very big money) is the 0.1% that sell us all that stuff they import from countries were labor is dirt cheap. To compete in this game we will have to lower our standard of living below theirs. And we are doing it. or should I say the government is doing it for us.

Sun, 10/28/2012 - 02:14 | 2924880 philipat
philipat's picture

That is not entirely correct. What will happen (Is happening) is that wages and living standards in the developing world will increase and the same living standards in the developed world will fall, until they meet somewhere near the middle. Great for the Corporatocracy but not great for the average American. Hence my original post.

Incidentally, Democrats should love what is happening because it is "Fair" to see developing nations develop??

Sun, 10/28/2012 - 04:28 | 2924939 AnAnonymous
AnAnonymous's picture

The idea that standards in the developing world will rise up to a certain standard to meet the 'american' way of life that go down is preposterous.

'Americans' have made sure by their overconsumption achievements, obtained through hard dedication, that resources are lacking for this to be.

The 'american' way of life is not endangered. Other countries are irrelevant in the mix.

'American' nations have reached the point of overpopulation on the global scale and as such, no every 'american' can be maintained in this standard of life. Other countries are irrelevant as the consumption point reached by 'american' nations is enough to guarantee by itself that outcome.

The solidly entrenched 'american' middle class has no issue in standards of life: they are growing better or remain the same.

The vacillating 'american' middle class, that is a different story. But the Earth boat is now too small for both middle class populations to co exist.

The first one might be crippled by fear that the resentment felt by the second population might endanger and snowball into riots but save that, the standard of life is maintained or improved.

Sun, 10/28/2012 - 10:03 | 2925075 Hubbs
Hubbs's picture

Hmm, why so many down votes when I think you have addressed a very important issue.  I think this is what Chris Martenson and others, who have at least taken the time to consider all the possibilities  and come up with some critical thinking/analysis have touched on. Just because I don't necessarily like it, or even if I don't agree with it, or have no qualification to form an opinion about it, doesn't mean it is wrong.

Sun, 10/28/2012 - 06:52 | 2924978 Peterus
Peterus's picture

You're suffering from the usual misconception.

If USA right now would just wall itself in, stop all trade and just try to do it on it's own it would be a disaster. It is never about "jobs" but about what can you accomplish with this work. Everybody can be instantly employed in hunter-gatherer job that pays half a deer and some mushrooms each week. This is not what you want - you want to have high-paying jobs. For this you need technology, a lot of capital investment (have great tools) and good day-to-day enteprenaurial decisions.

Tech is only getting better, but capital is being consumed for dacades from monetarist-Keynsian policies (and dumbing down of labor force and many other factors) and companies have crooked incentives from corporatism and heavy regulation. Average american is just not up to it. What he can provide with his work is not worth lavish wage he wants for it (still even minimum wage in USA - is "rich 10%" for the World). But it is not from "undercutting" of trade, but it is because it is so degraded over the years.

Trade (which is FAR from free right now) actually mitigates this effects. Advances of trade partners lower prices of many goods - this is how you can only afford them.

With trade cut - iron wall around USA - standard of living would drop well over 50%. Dumb workers would have to work with depleted tools and under corporatist bosses. Their output would still be what it is (pretty high, but nowhere near what it was), but you could not swap it up for things that are done better elswhere. Whatever $ would be paid for these jobs would translate to much, much more expensive products.

Sun, 10/28/2012 - 09:40 | 2925065 Hubbs
Hubbs's picture

I understand that if trade barriers were erected, then US might face some serious inflation due to initial lack of competition from cheap production overseas.

However, if TRUE competition were allowed to become established in US within our walls, then in theory, quality and price would improve.

The problem is, and I don't think our forefathers could have envisioned this far into the future, that with mass production and so called "labor saving" technology, you have an enormous concentration of money, wealth, and invariably, political influence. The railroads and steel monoploies were stark examples early on, but  these were easy to single out compared to the complex monopolies, corporate capitalism, fascism, we have today.

Having thought meanfully about all this for the past few years, in my untrained opinion, the source of all this can be traced back to the establishment of a Federal Reserve banking system with a fractional lending multiplier.

Politicians love the system. Since they are capable of no useful productive work themselves, they seek political office as a career. To stay in office, they have to promise voters a bunch of freebies, and to do this, these politicians have to be able to borrow, since there isn't enough collected through taxes to pay for it on a pay as you go basis. And of course the Fed cartel loves it because with a snap of their fingers, money appears which is loaned to the government for which they then collect interest. "Money for nothing" as Mark Knoffler of Dire Straits wrote in his famous song. Little did even he know the true ramifications of this song's meaning.

Now that politicians are re-elected and embedded, they become a magnet for corporate influence money, since no corporation is going to invest in a legislature (political system) which won't be around for a second term. But if a politician can't borrow money  he can't deliver on any promises, and thus ends his political "career". Pissed that they didn't get a free lunch, people vote him out.  And probably the same for most if not all politicians. People would realize that voting is no longer a way to get a free lunch. Politicians would realize that politics was no longer a lucrative  career option.

So, forget about trying to pass laws for term limits. You are trying ro attack a Tiger Tank with a frontal shot through it's thickest armor. 

 

I just think with 300 million people, the US is large enough that under a fairly refereed competive free enterprise system, good quality goods and services could be produced.  We have proven beyond a shadow of a doubt that we in the US  consume anything and everything, so there would be no shortage of buyers within our borders. The big corporations and politicos are blowing smoke up our asses with the convenient, oh so convenient, BS line that walling ourselves off from foreign competition would be disasterous for the US.  It would basically no longer let the established corporations have it both ways : our huge domestic markets but only off shore production.

But we have got to back track on the freebies: social security, Medicare, food stamps etc. Reward those who take initiative and do productive work. Stop rewarding with 15% capital gains taxes those Wall Streeters who do no productive work. Tax these non productive gains (that includes you Mitt) at 85%. If you actually established a company that is productive and adds value like  making tractors, medicines, producing food etc , then your profits should be taxed at only 15%. Congress has got it ass backwards.

 

 

Capitalism a la the 21 century, more than ever, needs very strict impartial referees

Sun, 10/28/2012 - 08:15 | 2925005 Cloud9.5
Cloud9.5's picture

So at the end of the day, the only unions left standing will be the public sector unions.  Print  Ben Print.

Sun, 10/28/2012 - 01:09 | 2924853 neutrinoman
neutrinoman's picture

The +0.7% addition to Q3 GDP growth came from an increase in government spending. But part of that increase was moved up from next fiscal year. By the time the revisions are done, the election will be over, and Q3 GDP will be reported at something real, like +1.3 or 1.5%, not 2.0%.

The American problem with living beyond our means didn't start in 1980. It started in the late 60s, when Johnson and Nixon insisted on having their "guns and butter" simultaneously. The US began printing money to expand the monetary base, to pay for overpromising in government spending -- both war in Vietnam and the Great Society at home. Even after the Vietnam war ended in 1975, the resulting price inflation wouldn't go away and got steadily worse. It was during this period that the gold standard broke down, because too many dollars were being printed.

What changed in 1981-83 was that the money printing was greatly slowed down, but a new financial expansion -- that of credit, not money -- started to take over. It reached a plateau in the early 90s, when it should have been resolved. Instead, we got Greenspan, Clinton, Rubin, Fannie/Freddie, and so on, the largest credit bubble in history -- you know the rest.

Sun, 10/28/2012 - 02:23 | 2924884 silverdragon
silverdragon's picture

The upside for exports is that as the US continues to debase its currency the goods it still produces that are popular: Hummer, Harley, Apaches, Mustang will all be dirt cheap due to debasement so eventually manufacturing increase as the world buys up US goods at previously unseen prices. May take a decade to happen but its the best upside I can see.

Sun, 10/28/2012 - 02:24 | 2924885 pfairley
pfairley's picture

USA's new export and debtor status GREATLY negates KRUGMAN's view that WW2 debt/stimulus proves that 'even if much of stimulus is ill spent and balloons debt  it is still good'  !?.....Any detailed reading of US economic history shows that USA was more like China in 1940's...huge in exports and lending to other countries.  UK also had WW2 debt/stimulus and struggled up until needing an IMF bailout in the 1970's...and still struggles despite North Sea oil and many other windfalls to the government. USA had huge exports of weapons and trucks in 1940's, especially to Russia.

Sun, 10/28/2012 - 04:41 | 2924945 AnAnonymous
AnAnonymous's picture

The development of communications shrank the global marketplace while the rise of technology allowed the U.S. to embark upon a massive shift to export manufacturing to the lowest cost provider in order to import cheaper goods.
_________________________

Outsourcing is a component of 'american' economics.

This 'american' reduces the window frame to the last 30 years. But this impulse has been shaping the whole landscape of the US.

It is only when it crossed borders that 'americans' reported it as noticeable. Outsourcing in the US has been a major trend from county to county, from state to state etc

Remarkably, US Americans have pushed forward their own solution: mobility. Move where the activity moves as outsourcing is such a vital component of 'american' economics.

But when it comes to their national borders, suddenly, it has to change.

Another exhibition of the impossibility for 'americans' to put up with consequences of their own actions. 'American' economics were forced onto the rest of the world by 'americans'. But 'americans' do not want to put up with the consequences of their own coercion. They want the weak to limit the strong, the person that was unable to resist the push to foot the bill.

Contrary to what this site's focus suggests, the resiliency of the 'american' system over the world does not lie into 'american' nations, it is lied into all the countries below that have to put with the shit 'americans' keep dumping on them.

Reporting on those nations, looking for the breaking point, would be much less lucrative. First, it would introduce reality and 'americans' prefer fantasy, they prefer to think that their system resiliency lies with them, not in the weak and the poor they are extorting and farming. When those latter break down, the 'american' system breaks down. Better to look elsewhere.
Second, that would remind them of what they are and 'american' nations are built on oblivion, on forgetting who 'americans' have been. 'Americans' revel in blatant lies like the US started as a free country etc Because 'americans' want to forget who they are. Forgetting is the concrete of their 'american' society. But it appears that some 'americans' can not forget what their past life looks like as they are pushed toward the wrong side of 'americanism'.

Sun, 10/28/2012 - 04:43 | 2924946 AnAnonymous
AnAnonymous's picture

The importance of this shift in the U.S. from away from being the epicenter of global production and manufacturing to a service and finance based economy should not be overlooked.
__________________________

'American' economics is all about consumption.

Production and manufacturing is consumption.

What matters is the overall consumption as the one who consumes the most and fastest is the genius in 'american' economics.

What you do to achieve that does not matter.

Sun, 10/28/2012 - 04:51 | 2924947 CloseToTheEdge
CloseToTheEdge's picture

What you do to achieve that does not matter.

 

(reading your 'genius' post)

Sun, 10/28/2012 - 05:13 | 2924954 Offthebeach
Offthebeach's picture

Also soldiers and porn.

Sun, 10/28/2012 - 09:27 | 2925051 Orly
Orly's picture

Love me some Lance!

Noting your charts on exports and manufacturing, these things have a way of oscillating and it seems to me that we are nearing the bottom of the downward cycle.  The next forty years may prove to be a manufacturing and export boom unlike any seen in peacetime for a long time.

It's going to be exciting.  A retooling of American manufacturing will rebuild the middle class and make the '80's look like the '50's.

:D

Sun, 10/28/2012 - 13:51 | 2925493 hawk nation
hawk nation's picture

Can i have someof the kool aid you are drinking

Imports may increase but it means the dollar has lostmostof its worth

Sun, 10/28/2012 - 14:52 | 2925581 Orly
Orly's picture

How else can we have the Chinese and other countries contribute to our GDP?  I mean, if the USD were constantly in the business of crushing everything on the planet, we wouldn't be able to sell loans to Southeast Asians and Chileans, now would we?

So now we're even and we can sell our stuff everywhere around the globe freely to people who can actually afford it and make some really serious money.  Same as a dope dealer: why sell the ultra-pure stuff when you can cut it by ninety percent and have the equal effect?

It's all in the plan and it's about time we just accepted it and moved on.  The horizons of equality for American manufacturing are boundless.  Otherwise, we'd be trying to sell $35,000 (equivalent...) iPads to others.  As long as everyone can pay $500, we can ship them as long as there is an ocean to do it.  Please open your mind to this idea.

Plus, I don't like Kool-Aid myself.  I prefer PG Tips.

:D

Sun, 10/28/2012 - 13:49 | 2925486 hawk nation
hawk nation's picture

I respectfully disagree with this article and i think the chart that should be provided is the growth of government spending and burocraticred tape[regulations]

Do NOT follow this link or you will be banned from the site!