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Rex Brynen
07-29-2008, 03:53 PM
I love this map from strangemaps (http://strangemaps.wordpress.com/2007/06/10/131-us-states-renamed-for-countries-with-similar-gdps/)--it replaces the names of US states with those of countries with similar GDPs, and in so doing highlights the continuing extent of US economic power.

The Iranian threat? Think Alabama.

"Oil rich Saudi Arabia?" Think Tennessee.

http://strangemaps.files.wordpress.com/2007/06/350816052_0a392a0d28_o1.jpg

(A more recent World bank ranking of GNI can be found here (http://siteresources.worldbank.org/DATASTATISTICS/Resources/GNI.pdf).)

Tom Odom
07-29-2008, 03:55 PM
Obviously inaccurate, Rex. Thibodeaux and Boudreaux doan liv in no Indoneeesia. :D

Ken White
07-29-2008, 04:11 PM
go to a Kimchi based diet... :eek:

Ron Humphrey
07-29-2008, 04:13 PM
go to a Kimchi based diet... :eek:

Come on, it has its benefits:wry:

Fresh breath just wouldin be one of em:eek:

Tom Odom
07-29-2008, 04:30 PM
Then again, California and France does make a good match...:wry:

Rex Brynen
07-29-2008, 04:37 PM
Actually, as a University of Calgary graduate, I was quite happy we got Texas ;)

Entropy
07-29-2008, 08:03 PM
As a native Coloradan, can't complain too much about Finland.

Hmm, why no North Korea? :D

Tom Odom
07-29-2008, 08:07 PM
Actually, as a University of Calgary graduate, I was quite happy we got Texas ;)

Well as a native Texan and an Aggie I were glad we got u...:)

Fuchs
07-29-2008, 08:11 PM
Such graphics are entertaining for some people, but awfully pointless.

To compare economic 'power' by using exchange rates is incredibly useless. Purchasing power parity needs to be used for useful information, but it is afaik never being used for such comparisons.

And now some gross, not so entertaining graphics:

http://img207.imageshack.us/img207/3391/steel2007qg2.jpg

http://bp2.blogger.com/_V7Ehj7eG65Q/R97zMbI5SdI/AAAAAAAAAAM/t6lo_xdaVPA/s320/ships.jpg

The list could go on...

Most (almost 80%) of the U.S. economy is just services that don't really constitute economic 'power'.
PR China's industry is already superior to the U.S. industry (EU's industry is greater as well).

Just in case anybody doubts it; the graphics source was wiki, the industry figures were from CIA World Factbook.

Entropy
07-29-2008, 09:07 PM
Fuchs, how exactly does the service sector not constitute economic power?

And I'm not sure what the point is of demonstrating the US is not at the top of steel or shipbuilding since they are only two sectors.

selil
07-29-2008, 09:14 PM
Apples, oranges, a clue? Fuchs you can take any comparison, redefine it after the discussion has began, constrict the evidence to only what supports your case, and even go as far as suggesting the original poster was wrong. That doesn't make it right. The term I believe is sophistry.

Adam L
07-29-2008, 09:25 PM
Then again, California and France does make a good match...:wry:

I always found it funny how its always people from California who go on and on about how they have the best wine in the world, and yet they are always ordering high end French wines. Now they can honestly say they order California wine. Personally, I think they are both too damn expensive. Why spend $75 dollars on a bottle of wine that may not even last the meal, when you could drink get descent wine for 12-20 (there are some very nice Chilean and New Zealand wines for less than 15, or you can get great Pinot Grigio for 20) have 55 bucks left over and get yourself a good Scotch that will last you a while. In the end, liquor is a lot more economical than wine. LOL!


Actually, as a University of Calgary graduate, I was quite happy we got Texas ;)

Of course you would get Texas. Half the engineers, chemists, etc. are already in Alberta! LOL! Still, too many Albertans do not understand that it might be dangerous to their health tho call a Texan a "Yankee." :D

Adam L

selil
07-29-2008, 09:41 PM
Well Texas is like a whole nother country...

Adam L
07-29-2008, 10:09 PM
Fuchs, how exactly does the service sector not constitute economic power?

And I'm not sure what the point is of demonstrating the US is not at the top of steel or shipbuilding since they are only two sectors.

Although I am not sure if Fuchs statistics are the most relevant, he is correct. Service based industries are not significant when it comes to economic power. Also, this "service based" economy we are building (personally, I think we already have it) is a bad idea, and more dangerous to US national security than almost any other threat. Our economic stability and strength should be dealt with more tactically. Today, we barely can call ourselves an industrial nation. We have spent the last 30 years sending our industry overseas. We used to be #1 in steel production.


Apples, oranges, a clue? Fuchs you can take any comparison, redefine it after the discussion has began, constrict the evidence to only what supports your case, and even go as far as suggesting the original poster was wrong. That doesn't make it right. The term I believe is sophistry.

It's only sophistry if he redefines the terms to unreasonably and excludes evidence that is relevant. His arguments are legitimate, and it is your job, if you disagree with him, to defend what he is claiming to be incorrect or flawed. His argument does not become sophistry just because you feel it to be incorrect. To call what he has argued sophistry, would be to call any form of argumentation such.

Although I would not have structured my argument the way Fuchs has, nor used the same statistics, I do have to say he has a legitimate point.


Adam L

Fuchs
07-29-2008, 10:15 PM
Fuchs, how exactly does the service sector not constitute economic power?

And I'm not sure what the point is of demonstrating the US is not at the top of steel or shipbuilding since they are only two sectors.

Money is mostly an illusion, and even the purchasing power parity concept fails to make services really comparable. A haircut for an Indian costs a couple of cents, a haircut for an U.S.American several dollars. Even if the hair studio and service were perfectly identical - the price would still be different even in ppp terms.

Another problem is that services are in large part a substitution for informal activity. A haircut would be made by family members in most countries, for example. Such activity counts for nothing in statistics, but it is still valuable.
Typical household activities like cleaning can be done formally or informally - in the latter case it means nothing for GDP statistics.

Third; services are only in a very small part available for export. Services - unlike industrial/agricultural value added - is quite unimportant in interaction with other nations. Even in the financial sector it's rather the willingness to postpone consumption and lend away money instead of the associated services that weigh heavily. Services-borne value added does usually not constitute influence beyond the borders.

Finally; this is a pretty much a military/national security related forum. I saw the topic in this context.
Services are almost irrelevant as base for military power. You can't get a rifle from an UPS driver, you cannot sell his services to other nations in exchange for their rifle - but an industry worker can make a rifle for you.
Some services have relevance (like harbour service, railway, airports) - but the bottlenecks count, an abundance of harbour services doesn't help much if only a fraction of their capacity is relevant.

The U.S. economy is like a canoe with two rowers and eight steersmen (the German one is like 30%/70%).
It's misleading to compare its 'power' in terms of full crew instead of just rowers. Other teams don't have ten men in their canoe, but a much higher share of rowers (PRC like 3/3).

The shipbuilding graphic (more modern data is even more extreme; check the wikipedia entry on shipbuilding (http://en.wikipedia.org/wiki/Shipbuilding)) - is relevant because mankind has never experienced that a naval power kept its superiority on the seas in face of a challenger who had a greater shipbuilding capacity. Much less a shipbuilding capacity that's stronger by more than an order of magnitude.

slapout9
07-29-2008, 10:54 PM
All I can say if those map folks think Alabama is like Iran....they need to review their employee drug testing policy:cool:

Ken White
07-29-2008, 11:03 PM
in general, the US is just a little larger. Penalty of a 'post-industrial' society the Academics keep telling us is the way to go... :mad:


...Services are almost irrelevant as base for military power. You can't get a rifle from an UPS driver, you cannot sell his services to other nations in exchange for their rifle - but an industry worker can make a rifle for you.Well, you can in the US -- most of them have a couple of rifles at home...;)
The U.S. economy is like a canoe with two rowers and eight steersmen...There's more truth in that statement than you realize. I agree with it as you meant it but it's also true in the sense that there are too many steersmen trying to make decisions -- ending up with no one in charge all too often... :D
The shipbuilding graphic (more modern data is even more extreme; (it) is relevant because mankind has never experienced that a naval power kept its superiority on the seas in face of a challenger who had a greater shipbuilding capacity. Much less a shipbuilding capacity that's stronger by more than an order of magnitude.Mankind has never experienced many things that are now occurring. The world is in the early throes of major change; too early to tell how it will fall out. A lot of historical paradigms are going to be laid to rest -- many won't, it's true but we don't know yet which will and which will not...

Thus, your comments are all correct -- but I'm not sure they prove what you think they prove.

Rex Brynen
07-29-2008, 11:15 PM
You can't get a rifle from an UPS driver, you cannot sell his services to other nations in exchange for their rifle - but an industry worker can make a rifle for you.

Given that UPS runs a global logistical system superior to that of every other military in the world (save one), I'm not sure that knowledge embedded in the system is entirely irrelevant from an aggregate national power perspective.

Then again, since the DHL courier who (almost) delivered the Harry Potter touque that my daughter ordered today had the wrong customs COD and tried to charge me an $82 clearance fee for motorcycle parts instead, and then finally was told by his dispatcher to bring it all back again so they could sort it out (leaving my daughter HP touqueless), I perhaps shouldn't be singing the praises of the courier industry... :D

PPP adjusted GNI data is useful if you are looking at, for example, the ability of a state to acquire assets that are priced and available locally (say, raw military manpower). They are irrelevant for other purposes (buying F-16s from the US).

More generally, I don't think the odds of the US fighting a multi-year war in which long-term rifle (or ship) production becomes a deciding issue are significant at present. I think there is even less chance of such a war where the US so loses control of sea lanes and allies that it is unable to buy raw and semi-processed materials for major trading partners. (This would be of rather more concern to me if I was, say, China, and had relatively limited bluewater navy.)

Fuchs
07-29-2008, 11:17 PM
Actually, I think they prove that we (in the West) should stop considering our nations as being what they once were.
Too many people don't understand that we are in decline in several aspects even though we are in rise in others. Instead, many people seem to believe that the 'power' ratios in the Western world are just like the were decades ago (plus China's industrial rise).

How many people would believe that the South Korean shipbuilding industry has many dozen times the capacity of the U.S. one, or that Poland's and Croatia's shipbuilding industries are larger as well? It's likely easier to find people who still consider the extreme U.S. shipbuilding effort of WW2 as an indicator of national power.

Most Western nations/economies would have trouble to mobilize and equip as many soldiers as they did in WW2. The million men armies would have almost no uniforms. Most of the textile industry is gone, after all!
On the other hand: Even the present, relatively weak steel industries are still much more capable than they were in WW2 (and the steel is better).

And Ken; wasn't it you who - just a couple of days ago - wrote in the context of technological changes that you don't trust "everything changes" attitudes?

Ken White
07-30-2008, 12:21 AM
...And Ken; wasn't it you who - just a couple of days ago - wrote in the context of technological changes that you don't trust "everything changes" attitudes?Minor changes in technology do not necessarily change operational techniques and practices; sometimes they do, sometimes they don't. IIRC, that discussion was on the increased lethality of munitions -- a change that I believe has had only a minor effect on warfare.

Changes in the human condition, OTOH, will wreak even more technological change which may obviate current changes -- and techniques.
Actually, I think they prove that we (in the West) should stop considering our nations as being what they once were. Too many people don't understand that we are in decline in several aspects even though we are in rise in others. Instead, many people seem to believe that the 'power' ratios in the Western world are just like the were decades ago (plus China's industrial rise).I agree that too many do so. I do not however believe most do so.
How many people would believe that the South Korean shipbuilding industry has many dozen times the capacity of the U.S. one, or that Poland's and Croatia's shipbuilding industries are larger as well? It's likely easier to find people who still consider the extreme U.S. shipbuilding effort of WW2 as an indicator of national power.Why would they not believe it, it's true -- the US Shipbuilding industry is very much aware of it. Part of this discussion lies in the realm of the never ending quality versus quantity argument which there's little sense in going into that here. On the WW II shipbuilding effort, the real issue is the pre war level versus the 1944 level; most of that effort was built from scratch. Could it be again? Probably. Will it need to be? Not soon.
Most Western nations/economies would have trouble to mobilize and equip as many soldiers as they did in WW2. The million men armies would have almost no uniforms. Most of the textile industry is gone, after all!
On the other hand: Even the present, relatively weak steel industries are still much more capable than they were in WW2 (and the steel is better).Somehow, I have this idea that a lack of textiles will not be a major problem in future war... :D

Watcher In The Middle
07-30-2008, 02:08 AM
misleading indicator, at best.

Have always thought that raw industrial production is a poor indicator, which tends to mask deep seated problems. For example, the PRC leads in steel production, but they are highly dependent on outside sources for a substantial portion of both coking coal, and iron ore. Lose even partial access to those outside resources, and all you have is a large pile of sunk costs into non-productive assets. Truth of the matter is that China (PRC) is only a part of the overall manufacturing and fabrication process, and for the really finished goods requiring high quality, precision steel, there's a lot of other players outside of China who all have to be involved, otherwise the entire process goes into free-fall. That's why there is still a fair amount of steel producing capacity here in the US.

Which brings up a critical point. Manufacturing locations like China, Vietnam, India, and other locations have been seriously damaged by the vast increase in transportation costs over the last 6 to 9 months. The entire "offshoring" business has totally been changed because of the increases in transportation costs (and we are not talking small increases), and there's large international businesses out there who are currently sweating blood over the possibility that they are going to take some massive writedowns on investments made over the last several years in "offshoring" manufacturing capacity.

Check and see how many new announcements of major investments and/or expansions in production capacity are being made within the last 5-6 months in places like China. Hint: Not Many. There's a reason - the uncertainty in the marketplace is forcing a comprehensive review of many projects, and project validity with gas prices at $2.50 a Gal. is one thing, project validity is much more uncertain (and unlikely) at $4.00 a Gal. And remember, the government of the PRC was subsidizing fuel prices, and those subsidies have been cut by at least 40% to 45%, with more increases to come.

If you talk to any number of business analysts who are really have the insides into China's manufacturing potential, they are much less confident than what oftentimes gets presented in the MSM, specifically in that many very difficult issues China has to face just get ignored or glossed over.

In short, I'm a little bit worried about US economic power, but for different reasons. We need to build a substantial energy production base (and I'm not necessarily concerned just about oil) for both natural gas and electricity, but also high speed internet capacity (REAL high capacity broadband, not this wannabe nonsense being foisted off onto the general public these days). And addressing those issues, at least here in the US, are directly in the political realm.:mad:

Icepack6
07-30-2008, 02:55 AM
even though, as a native Nu Yawkah, I consistently bemoan the liberal tendencies of my home state. . . . but, NYS could not handle the spectacle of Brazilian carnival. If so, I would move back

Shek
07-30-2008, 05:33 AM
Although I am not sure if Fuchs statistics are the most relevant, he is correct. Service based industries are not significant when it comes to economic power. Also, this "service based" economy we are building (personally, I think we already have it) is a bad idea, and more dangerous to US national security than almost any other threat. Our economic stability and strength should be dealt with more tactically. Today, we barely can call ourselves an industrial nation. We have spent the last 30 years sending our industry overseas. We used to be #1 in steel production.

Adam,

The United States is still #1 in manufacturing (http://cafehayek.typepad.com/hayek/2007/09/the-state-of-ma.html), and our absolute level of manufacturing is at record levels. As far as steel goes, a study completed immediately following 9/11 (http://www.commerce.gov/opa/press/Secretary_Evans/2002_Releases/Jan_09_DOC_Iron_Steel.html) found that the US had more than an adequate access to steel for defense purposes. Part of this is due to the fact that we have moved beyond regular steel for a fair amount of our defense related technology. Besides, if regular steel were such a concern, creating a national stockpile along the lines of the SPR would be a cheaper option.

Schmedlap
07-30-2008, 06:11 AM
Two points...

1. If you owe the bank $100, then that is your problem. If you owe the bank $100 million, then that is the bank's problem. We owe trillions of dollars to the world. If something happens that makes us unable to make timely payments on that debt, then it will become the world's problem.

2. Too big to fail.
If the US ever suffered a significant depression or other economic calamity then the world would need to think of something quick, because our economy is "too big to fail." If we go down, then Japan and China are going to be holding some worthless paper, oil producers are going to see demand plummet, every country with a current account surplus is going to be living off of its reserves, Africa and the UN get no more money, South America gets the double whammy of no more aid and less demand for their illicit drugs, and Europe can try to piece it all together while supporting their welfare states.

If America is in decline, then the world is in decline.

Shek
07-30-2008, 06:52 AM
Two points...

1. If you owe the bank $100, then that is your problem. If you owe the bank $100 million, then that is the bank's problem. We owe trillions of dollars to the world. If something happens that makes us unable to make timely payments on that debt, then it will become the world's problem.

2. Too big to fail.
If the US ever suffered a significant depression or other economic calamity then the world would need to think of something quick, because our economy is "too big to fail." If we go down, then Japan and China are going to be holding some worthless paper, oil producers are going to see demand plummet, every country with a current account surplus is going to be living off of its reserves, Africa and the UN get no more money, South America gets the double whammy of no more aid and less demand for their illicit drugs, and Europe can try to piece it all together while supporting their welfare states.

If America is in decline, then the world is in decline.

The financial version of mutual assured destruction (MAD).

Fuchs
07-30-2008, 11:45 AM
Adam,

The United States is still #1 in manufacturing (http://cafehayek.typepad.com/hayek/2007/09/the-state-of-ma.html)...

Statistics...
You're right for official exchange rates (but everybody knows that the Renminbi is too cheap). But you're wrong at purchasing power parity exchange rates.

USA:
GDP = USD 13.84 trillion
industry: 20.5% share of GDP
2.837 trillion industrial value added, USD

PR China:
GDPppp = USD 6.991 trillion
GDP = USD 3.251 trillion
industry: 48.6% share of GDP
3.398 trillion industrial value added, USDppp
1.580 trillion industrial value added, USD

As I said before, money is just an illusion. The offiial exchange rates are a wrong illusion.
PPP exchange rates are a less incorrect illusion.

(source: CIA World Factbook, everything 2007 estimates)


Two points...
2. Too big to fail.
If the US ever suffered a significant depression or other economic calamity then the world would need to think of something quick, because our economy is "too big to fail." If we go down, then Japan and China are going to be holding some worthless paper, oil producers are going to see demand plummet, every country with a current account surplus is going to be living off of its reserves, Africa and the UN get no more money, South America gets the double whammy of no more aid and less demand for their illicit drugs, and Europe can try to piece it all together while supporting their welfare states.

If America is in decline, then the world is in decline.

You overestimate the relevance of the USA.
It's correct that the somewhat close economic ties can export U.S. economic troubles to most of the world. But that's only a short-term effect. Few per cent of the German GDP are related to trade with the U.S., for example - and the trade is a drain on its resources, not a push to its economy.
All countries that have a positive trade balance with the U.S. are actually feeding it - they could consume their own goods or export to other nations instead. The economic should would just cause short-term adaption costs.
Nobody really depends on working for Americans for promises to pay sometime in return.

Africa and the UN actually get a lot of money from other countries than the US.

European trade with the USA is actually not so overwhelmingly large as many people suppose. Its exports are diverse, so it would be possible to consume much of it in Europe or elsewhere.
And the reference to welfare state - well, that reminds me of a stereotypic misunderstanding by Americans. We pay to steer the society a bit and to keep the poor less poor. That's actually not more expensive than to have a higher crime rate and 0.75% of the countries' population in jail.

Tom Odom
07-30-2008, 11:52 AM
even though, as a native Nu Yawkah, I consistently bemoan the liberal tendencies of my home state. . . . but, NYS could not handle the spectacle of Brazilian carnival. If so, I would move back

Great Avitar! That you?

Ken White
07-30-2008, 02:10 PM
You overestimate the relevance of the USA.Always reliably countered by your understating it... :D
And the reference to welfare state - well, that reminds me of a stereotypic misunderstanding by Americans. We pay to steer the society a bit and to keep the poor less poor. That's actually not more expensive than to have a higher crime rate and 0.75% of the countries' population in jail.Not more expensive but less likely to increase our already bad but not quite as bad as yours culture of dependency on the government. ;)

marct
07-30-2008, 02:17 PM
If America is in decline, then the world is in decline.


You overestimate the relevance of the USA.

You know, Schmedlap, Fuchs is right; you are overestimating the importance and relevance of the US economy.

Two points that haven't been mentioned but should be are:


Rhetoric aside, we (North America) don't have a "service economy" we have an "information economy" that drives service industries. The two are quite different. Furthermore, many of the areas, such as call centres, data entry, etc., that made up the service industries from the 1960's are now outsourced to India and China.
Everyone seems to be confused by this idea of national economic power and has forgotten that large amounts of industrial capacity are not held by nation states but, rather, are held by non-state actors such as GM, Ford, etc. Multi-National Corporations (MNCs) are as "stateless" as groups such as al Quaida and, if their interests are not being met in one nation, then they will move to another.

Final point on "indicators"...

Indicators are signs pointing towards something, but there are some pretty basic flaws in our assumptions about what they point towards. For example, what does shipbuilding capacity/production point towards? Ken touches on this in his coment about shipbuilding earlier.

And while we are talking about indicators, let me bring out my favorite example.... Did you know that buggy whip production used to be used as he indicator for personal transportation capacity? Well, since it's the indicator (said with a hushed and reverant tone), what does that tell us about the state of US and Canadian personal transport capacity????? We're DOOMED :eek:!!!!!!

Schmedlap
07-30-2008, 03:18 PM
Few per cent of the German GDP are related to trade with the U.S., for example - and the trade is a drain on its resources, not a push to its economy.
And notice that I did not imply any direct harm to Europe.


All countries that have a positive trade balance with the U.S. are actually feeding it - they could consume their own goods or export to other nations instead. The economic should would just cause short-term adaption costs.
International Trade Theory 101: The US is a large importing country for many goods. If we no longer purchase those goods, then it creates surplus supply in the exporting country, prices plummet, profits plummet, and the incentive to continue producing plummets. So, no, those countries would not consume their own goods. They would respond by dramatically scaling back production in the short term and closing down businesses over the long term.
And if the US economy took a dump, then other countries would suffer economic downturns and have less disposable income as well.


Africa and the UN actually get a lot of money from other countries than the US.
See above regarding disposable income.


You know, Schmedlap, Fuchs is right
Impossible.

Fuchs
07-30-2008, 04:03 PM
International Trade Theory 101: The US is a large importing country for many goods. If we no longer purchase those goods, then it creates surplus supply in the exporting country, prices plummet, profits plummet, and the incentive to continue producing plummets. So, no, those countries would not consume their own goods. They would respond by dramatically scaling back production in the short term and closing down businesses over the long term.
And if the US economy took a dump, then other countries would suffer economic downturns and have less disposable income as well.

This is a complex issue (central banks use models with 2,000+ variables to simulate this), and it's off-topic so I don't want to elaborate much.
You simply didn't think around enough edges. A goods trade balance deficit equals a capital transfer deficit and lower prices broaden the base of customers. Finally, production can be changed to different goods to meet demand elsewhere.

Guess what? The American trade balance deficit isn't being paid for by Americans. If the Americans suddenly stopped buying, they would also stop lending. The money would stay outside, the goods would stay outside - and people would simply buy more stuff with their own money after a short (2 years at most) phase of adaption.

----------------------------------

Some statistics that show the moderate relevance of the USA for Europe:

Germany (a country with extreme trade emphasis) has only 7.5% of its export trade (about USD 100 billion) and 4.5% of its import trade (about USD 49 billion) with the U.S..
A total embargo of the USA would only cause a dent (about a quarter) in the German trade balance surplus.
(Let's keep the calculations simple like this; this is not a doctor's thesis, after all.)

EU as a whole: 23.3% (USD 310 billion) / 13.8%. (USD 202 billion) - intra-EU trade excluded.
The difference is about USD 108 billion - less than a per cent of EU GNP and even the exports are less than 2 % of the EU GNP.

The perception of extreme interdependence comes solely from the financial markets, which have illusions as their business model. The real trade & hardware interdependence is marginal - most U.S. products have perfect or close substitutes in the EU.


Most of these were 2005/06/07 figures, CIA World Factbook.

Schmedlap
07-30-2008, 04:24 PM
A goods trade balance deficit equals a capital transfer deficit and lower prices broaden the base of customers.
The first part of that is correct. The second half is false. Demand is not created by an abudance of supply.


Finally, production can be changed to different goods to meet demand elsewhere.
A severe economic downturn in the US in all likelihood translates into a dramatic global economic downturn, as well, impacting the disposable income of the people who live elsewhere.


If the Americans suddenly stopped buying, they would also stop lending. The money would stay outside, the goods would stay outside - and people would simply buy more stuff with their own money after a short (2 years at most) phase of adaption.
I presume that by "they would also step lending" that you mean foreign gov'ts would stop lending us money. The issue is not whether they would buy more of our paper, but rather they would be stuck with buckets of paper that we will still owe money on. Even if we never issued another T-bill, we still owe billions in interest every year on paper that we have already sold.

Thanks for the elaboration regarding Europe, but keep in mind that that we already agreed on that in the first place, so you are preaching to the choir.

Fuchs
07-30-2008, 05:14 PM
The first part of that is correct. The second half is false. Demand is not created by an abudance of supply.

You seem to misunderstand either me or the concept of demand. Demand is dependent on price level. Excess supply = lower prices = broadened base of customers.
Let's say Americans don't buy Sony Playstation xy from China anymore. Sony cannot sell their Playstations as before and reduces the price. Lots of other customers can suddenly afford the Playstation xy.
Now add that the money isn't transferred to the USA as loan, but remains outside. In the end, Sony might even sell its Playstation xy for the old/same price to new customers.

A severe economic downturn in the US in all likelihood translates into a dramatic global economic downturn, as well, impacting the disposable income of the people who live elsewhere.


Yeah, yeah. That's the mantra of the TV reports about financial markets.
It's a short-term phenomenon, might last for probably two years, maybe as few as six months.
The USA simply has no such lever to ruin the real markets global economy.

Ron Humphrey
07-30-2008, 05:37 PM
Yeah, yeah. That's the mantra of the TV reports about financial markets.
It's a short-term phenomenon, might last for probably two years, maybe as few as six months.
The USA simply has no such lever to ruin the real markets global economy.(Emphasis Ron)

That the ultimate determination of this statements reality would be found not so much in the numbers but rather in whether all those countries you refer to would be confident enough in its validity to allow the US to economically flop.

Or if instead they would do anything they could to stop it from happening.

Might be a couple of good examples from recent past:confused:

Steve Blair
07-30-2008, 05:42 PM
Given the level that the majority of the major economies in the world are connected and interconnected, I'd say it would be "bad" if ANY of them took a major nosedive. US, EU, whatever.

selil
07-30-2008, 08:00 PM
How many countries has the United States bailed out in the last 100 years, and how many countries have bailed the United States out? Go ahead shorten to 50 years so WW2 isn't in the equation. How many countries rely on United States military? Industrial gimme' contracts? And, provide the reciprocal agreements.

Schmedlap
07-30-2008, 08:23 PM
You seem to misunderstand either me or the concept of demand. Demand is dependent on price level. Excess supply = lower prices = broadened base of customers.
I understand demand well enough to notice that your statement is untrue without a very important assumption:
There must be an existing demand in order for lower prices to stimulate a broadened base of customers. If people do not demand the goods, then lowering the price doesn't do much. China sells us black berets. If we stop buying black berets, then I doubt that the excess supply in China will stimulate a fashion trend of Chinamen sporting French headgear. And as other countries feel the pain of doing less business with the US, they will have less disposable income, so China will not be well-poised to market their wares in other countries as an alternative.

Also, what you wrote works poorly in the short run, which I think you acknowledge, and not at all in the long run, which directly contradicts your assertion of "a short-term phenomenon." Profits will fall because the production capacity that was serving a Chinese and US market now only serve the Chinese market. In the near term, jobs in the export industries will pay less and there will be layoffs. In the long-term, businesses will shut down and look for new ways to invest their capital - many of which will fail. I think that you are excessively confident when you assert that it would be a "short-term phenomenon" that "might last for probably two years, maybe as few as six months." If anything, the short-term would be the endgame.


The USA simply has no such lever to ruin the real markets global economy.
I think that just about anyone in the macroeconomics field would disagree. For example, the IMF has been sounding the drumbeat for about the past year of a coming global economic slowdown, in direct response to the US economic slowdown. Their forecasts seem to be about right and follow from the belief that the US economy has a significant influence upon the global economy.

Fuchs
07-30-2008, 09:20 PM
There must be an existing demand in order for lower prices to stimulate a broadened base of customers. If people do not demand the goods, then lowering the price doesn't do much. China sells us black berets. If we stop buying black berets, then I doubt that the excess supply in China will stimulate a fashion trend of Chinamen sporting French headgear. And as other countries feel the pain of doing less business with the US, they will have less disposable income, so China will not be well-poised to market their wares in other countries as an alternative.

Also, what you wrote works poorly in the short run, which I think you acknowledge, and not at all in the long run, which directly contradicts your assertion of "a short-term phenomenon." Profits will fall because the production capacity that was serving a Chinese and US market now only serve the Chinese market. In the near term, jobs in the export industries will pay less and there will be layoffs. In the long-term, businesses will shut down and look for new ways to invest their capital - many of which will fail. I think that you are excessively confident when you assert that it would be a "short-term phenomenon" that "might last for probably two years, maybe as few as six months." If anything, the short-term would be the endgame.


I think that just about anyone in the macroeconomics field would disagree. For example, the IMF has been sounding the drumbeat for about the past year of a coming global economic slowdown, in direct response to the US economic slowdown. Their forecasts seem to be about right and follow from the belief that the US economy has a significant influence upon the global economy.

I don't talk about exotic Giffen goods or other exceptions from the rule. The standard theory is that lower price = more sales potential. All else would not be modern economic theory.
The black beret example doesn't work well because a black beret factory could easily change its production portfolio - that's why I wrote repeatedly about a time of adaption.

A factory usually being owned by companies that have a strong interest to make profit. They won't simply stare at the USA and close the factory because Americans don't buy their goods anymore. They would seek other markets and adapt their production.

You seem to ignore consequently that the current model of exports in exchange for bare promises is much less reasonable than producing for those who actually add the value.

And the IMF has - like the World Bank - a record of being useless in economic theory. Too much agenda and ideology.
Plus; it's a human trait to be risk-averse. Most are. That's why so many people are conservatives. The want to preserve because they fear changes. That's already enough to explain why some sound the drumbeat.

Btw; I didn't mean or intend to assert that it would be nice if the USA broke down economically. The adaption phase would be unpleasant. But the present system is unsustainable and will go away anyway (or is about to do so). It's not the only system that can work fine, and in fact it's not really doing so anyway.
The dependency of Europe is certainly too small to be hurt badly. A loss of growth for a short time followed by a recovery (because growth depends on other factors in the long term anyway) is the most that the USA could do to Europe with an economic crisis.
The PRC would be be influenced much more. Not necessarily badly, though. They need to reduce their trade balance surplus and increase their domestic consumption faster than before anyway (not the least to keep internal peace).

Entropy
07-30-2008, 10:01 PM
This thread is becoming bizarre. I'm not sure what the point of it is anymore. What got everything really going was the question of "economic power" (which I think is a highly subjective concept) and whether the US has it or not because it's economy is increasingly "service" (another variable term that has a lot of problems) oriented.

Fuchs,

While an interesting discussion so far, I'm not really sure what your point is. It seems you are saying that the US lacks "economic power" because the US economy is becoming more "service" based. I disagree with that general conclusion along with many of your supporting arguments, which I won't spend the time to belabor here, but more importantly, I think we probably fundamentally disagree on what "economic power" is.

Long ago, agriculture was economic power. With the industrial revolution, industry became the primary source of economic power. My view is that we are in the midst of another revolution - one that won't be complete for quite some time. Industry remains relevant, but grows a bit less important each year. At some point, maybe in a century, industry will probably look a lot like agriculture does today - highly efficient, automated and therefore requiring very little labor. If this is indeed the case, then where are people going to work? How are they going to earn a living? They'll have "brain" and service jobs.

And that's really one source of the so-called "decline" in industry and manufacturing. In real terms, both have actually increased fairly steadily in the US during the last 50 years, not decreased. What has decreased is the labor required. Like agriculture before it, the amount of labor required has dropped and is continuing to drop. That labor has to go somewhere and the simple fact is that much of it goes to the service sector. Many of the graphs here may be instructive. (http://www.whitehouse.gov/cea/lazear20070302.html) The fact that those huge increases in productivity allow growth in other areas is a strength, not a weakness, IMO.

You seem to hold China up as some kind of industrial powerhouse. I suppose if your measure is plastic toys, clothes and toaster-ovens (as opposed to aircraft engines, for example) you might be right. However, if the global economy collapses tomorrow, I think it will be much easier for the US to go back to making it's own toasters than it will be for China to make it's own jet engines. So while your comparison of industrial capacity by various measures may be true on a macro level, its irrelevant in terms of "power" unless other factors are considered.

Your argument also neglects raw material and energy dependency - the EU, for example, is highly dependent on imported energy and raw materials to make steel - much more so than the United States. One might therefore argue that the US steel industry is more resilient than EU's when all factors are considered.

All this isn't to suggest that all is well in the US. The decline in Americans studying science and engineering is much more worrisome to me than not being the best in steel or shipbuilding or most anything else you and others have mentioned.

Rex Brynen
07-30-2008, 10:07 PM
This thread is becoming bizarre. I'm not sure what the point of it is anymore.

Hey, I just thought it was a fun map ;)

selil
07-30-2008, 11:02 PM
Hey, I just thought it was a fun map ;)

eh dang canuckians stirring up trouble... You from Quebec ? :D

Tom Odom
07-30-2008, 11:55 PM
Hey, I just thought it was a fun map ;)

Me too

Speaking for Texas, I am happy

What about Canada, Rex?

Ken White
07-31-2008, 12:44 AM
about the validity of this or that theory should always be made with the thought in mind that Economists are like Doctors -- if one tells you something you don't want to hear, there's always another that will tell you the opposite.

The dismal science is well named... :wry:

I'm still not going for the Kimchi, don't care what blandishments Ron offers.

Rex Brynen
07-31-2008, 12:51 AM
Me too

Speaking for Texas, I am happy

What about Canada, Rex?

Works for me!

Which way to l'Alamo, svp?

Schmedlap
07-31-2008, 01:40 AM
You seem to ignore consequently that the current model of exports in exchange for bare promises is much less reasonable than producing for those who actually add the value.
No, I'm not ignoring something. I've simply fallen into the trap of conversing with Fuchs, playing whack-a-mole as you throw out an idea, it gets whacked, and then you just toss out another, and then return to tossing out the original idea, and on, and on.


The standard theory is that lower price = more sales potential.
Yes, but the all-important word "potential" makes that statement different from your original statement that "Excess supply = lower prices = broadened base of customers." But I guess that I'm wrong for not reading your mind and assuming that you meant something other than what you typed.


The black beret example doesn't work well because a black beret factory could easily change its production portfolio - that's why I wrote repeatedly about a time of adaption.
Indeed. And I repeatedly wrote that if economic calamity befalls the US then the disposable income of other countries suffers and they have less money with which to purchase alternate goods. Go ahead and ignore this and repeat yourself again. Maybe if I smack my head against the wall a few times than I will make the mistake of repeating my rebuttal yet again.


A factory usually being owned by companies that have a strong interest to make profit. They won't simply stare at the USA and close the factory because Americans don't buy their goods anymore. They would seek other markets and adapt their production.
And again.


And the IMF has - like the World Bank - a record of being useless in economic theory. Too much agenda and ideology.
Plus; it's a human trait to be risk-averse. Most are. That's why so many people are conservatives. The want to preserve because they fear changes. That's already enough to explain why some sound the drumbeat.
This hand-waving dismissal, like your earlier inane remark about what "the mantra of the TV reports" tell us is highly subjective and vague, to put it mildly.


All else would not be modern economic theory.
I'll leave you to subjectively interpret what is and what isn't. I give up.

Shek
07-31-2008, 06:43 AM
Statistics...
You're right for official exchange rates (but everybody knows that the Renminbi is too cheap). But you're wrong at purchasing power parity exchange rates.

USA:
GDP = USD 13.84 trillion
industry: 20.5% share of GDP
2.837 trillion industrial value added, USD

PR China:
GDPppp = USD 6.991 trillion
GDP = USD 3.251 trillion
industry: 48.6% share of GDP
3.398 trillion industrial value added, USDppp
1.580 trillion industrial value added, USD

As I said before, money is just an illusion. The offiial exchange rates are a wrong illusion.
PPP exchange rates are a less incorrect illusion.

(source: CIA World Factbook, everything 2007 estimates)

Fuchs,
Good point about PPP - I hadn't realized that the stats didn't incorporate PPP. Once you adjust the UNIDO statistics quoted in the piece based on the recent PPP revision from the World Bank, I still come up with the US being #1. We could spin around whether CIA estimates are better than UN/World Bank statistics, but we'll just obfuscate the larger point I was making that the US is by no means a faltering manufacturing state (and instead, remains either #1 or at worse, a very close #2). We could also look at the composition of the US manufacturing sector and decide that it tends to be at the higher end, making it well suited for the type of technology required to equip the national security apparatus of the United States.


You overestimate the relevance of the USA.
It's correct that the somewhat close economic ties can export U.S. economic troubles to most of the world. But that's only a short-term effect. Few per cent of the German GDP are related to trade with the U.S., for example - and the trade is a drain on its resources, not a push to its economy.
All countries that have a positive trade balance with the U.S. are actually feeding it - they could consume their own goods or export to other nations instead. The economic should would just cause short-term adaption costs.
Nobody really depends on working for Americans for promises to pay sometime in return.

Africa and the UN actually get a lot of money from other countries than the US.

European trade with the USA is actually not so overwhelmingly large as many people suppose. Its exports are diverse, so it would be possible to consume much of it in Europe or elsewhere.
And the reference to welfare state - well, that reminds me of a stereotypic misunderstanding by Americans. We pay to steer the society a bit and to keep the poor less poor. That's actually not more expensive than to have a higher crime rate and 0.75% of the countries' population in jail.

I understand that this was directed at Schmedlap, but once again, if you dive down into the weeds of bilateral trade stats, you miss the overarching point that Steve Blair simply put - the global economy is interdependent and so no matter what you quote from bilateral trade stats, a decline in an economic powerhouse (US, EU, etc.) is going to have a ripple effect that hits all. Whether the impact is direct to the EU or indirect through impacts on China, etc., is irrelevant. The fact that the ECB coordinated with the Fed this past spring to inject huge amounts of liquidity into the financial markets demonstrates this interdependence.

Fuchs
07-31-2008, 09:39 AM
I use CIA World Factbook for convenience (it's really a nice collection of data) and because it's generally less prone to be challenged as source in an English-speaking environment.

The ECB is responsible for inflation, not for growth. And central banks have a well-deserved reputation for being in love with stability.

About demand - I'm tired to discuss first week economic studies content anymore:
http://en.wikipedia.org/wiki/Demand

About Non-Americans having less money at hand when they stop exporting to the USA: Would be true if the U.S. bought its surplus imports with anything else than loans.
If in the current situation the USA would cut its imports and keep exports stable, the rest of the world would have MORE money for consumption/investment at hand (simply because the USA would not lend it to pay for the imports).


B2topic; Sure, the U.S. economy is large, even its small industrial part. It's just like that it doesn't resemble the economy of the 40's to 70's that some people still think about when they think of U.S. economic power and how well the military is being backed up by that.
I disliked the original picture because it was suitable to reinforce the idea of an extreme superiority that's simply not true for some critical branches and quite the opposite for some as well.

Shek
07-31-2008, 10:32 AM
The ECB is responsible for inflation, not for growth. And central banks have a well-deserved reputation for being in love with stability.

Not true. The primary objective is price stability with a much more rigid requirement than the Fed. However, the reason that price stability is a goal of both institutions is precisely because price stability provides the conditions for firms and individuals to make longer-term decisions that are more productive for the economy, i.e., greater price stability = greater rates of growth.


http://www.ecb.eu/press/key/date/1999/html/sp990610_1.en.html

I should like to draw your attention first to the word "objectives" in plural. The ECB certainly has a primary objective: "price stability". However, Article 105.1 of the Maastricht Treaty adds that "without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community as laid down in Article 2."

Among other objectives, Article 2 states that the Community shall promote a "sustainable and non-inflationary growth" and "a high level of employment and social protection".


About demand - I'm tired to discuss first week economic studies content anymore:
http://en.wikipedia.org/wiki/Demand

About Non-Americans having less money at hand when they stop exporting to the USA: Would be true if the U.S. bought its surplus imports with anything else than loans.
If in the current situation the USA would cut its imports and keep exports stable, the rest of the world would have MORE money for consumption/investment at hand (simply because the USA would not lend it to pay for the imports).

The reason that the money is available for Americans to borrow against is because people find that the US provides the greatest returns on their money all things considered (default risk, exchange rate risk, etc.). Thus, a decreased appetite for imports would mean less demand for loanable funds, pushing returns on loanable funds down, meaning that the funds that other countries put into the loan markets in the US would simply move elsewhere and face lower returns. Personal investment (I assume that you are referring to investments from a personal finance perspective) amounts don't change, they've just moved geograhpically and just become less productive all things considered. Thus, consumption/investments cannot increase since the loaned funds are already "investments". It is a zero-sum game as you've presented it.


B2topic; Sure, the U.S. economy is large, even its small industrial part. It's just like that it doesn't resemble the economy of the 40's to 70's that some people still think about when they think of U.S. economic power and how well the military is being backed up by that.
I disliked the original picture because it was suitable to reinforce the idea of an extreme superiority that's simply not true for some critical branches and quite the opposite for some as well.

I think that you're taking the graphic a little too seriously.

However, don't get too wed to the military instrument of national power. Since the majority of the global economy has a foundation that is information-based, the fact that the US economy (and the EU) has a strong information component to it means that we both have means that can be used to good effect when implementing grand strategy. The squeeze on Iranian assets through the information-based financial networks was effective in bringing Iran to the bargaining table and got North Korea to sign an agreement (actual outcomes is another issue, but it shows that the military stick isn't the only possible stick out there). As with any change, it brings new capabilities to yield and potential weaknesses to defend against.

Fuchs
07-31-2008, 11:48 AM
There's no discussion about ECB priorities. Whenever there's a conflict between inflation and growth, it is obliged to opt for the inflation control target 2% p.a.. Period.

"Thus, consumption/investments cannot increase since the loaned funds are already "investments". It is a zero-sum game as you've presented it."

You confuse world and non-U.S. world here.
When the non-U.S. world reduces its lending of money to the USA, the non-U.S. world would have more money left for consumption/investment. Simple fact.
That's what you denied (instead, you claimed they'd have less money to spend). I did never write about increased world-wide demand here.

And the present situation of assumed good ROI in the U.S. is a present situation, one that would not persist in the scenario we were talking about; an economic crisis in the U.S. that shrinks its huge imports.

Shek
07-31-2008, 12:36 PM
There's no discussion about ECB priorities. Whenever there's a conflict between inflation and growth, it is obliged to opt for the inflation control target 2% p.a.. Period.

Exactly what I quoted, and the point still remains that growth is an objective of the ECB, contrary to your earlier statement.


"Thus, consumption/investments cannot increase since the loaned funds are already "investments". It is a zero-sum game as you've presented it."

You confuse world and non-U.S. world here.
When the non-U.S. world reduces its lending of money to the USA, the non-U.S. world would have more money left for consumption/investment. Simple fact.
That's what you denied (instead, you claimed they'd have less money to spend). I did never write about increased world-wide demand here.

And the present situation of assumed good ROI in the U.S. is a present situation, one that would not persist in the scenario we were talking about; an economic crisis in the U.S. that shrinks its huge imports.

No, I didn't confuse anything here. The investment/consumption amount of non-US countries doesn't change in the net, it only changes geographical locations (with lower expected returns). Either way, it is the exact same amount money being allocated differently based on the consume vs. save (invest) decision now that the best option has been eliminated.

Like Schmedlap, I give up. We are down in the weeds and missing the big picture that I think Rex intended with this fun graphic.

Steve Blair
07-31-2008, 02:08 PM
eh dang canuckians stirring up trouble... You from Quebec ? :D

Can't be...he posted in English.:eek:

And it's clear to me that Rex posted the map as a fun sort of thing (although the KSC might have been a better place for that - or one less prone to confuse folks)...not as a serious expression of economic worth or value. From there it took a turn.

Tom Odom
07-31-2008, 02:14 PM
Can't be...he posted in English.:eek:

And it's clear to me that Rex posted the map as a fun sort of thing (although the KSC might have been a better place for that - or one less prone to confuse folks)...not as a serious expression of economic worth or value. From there it took a turn.

Naw mate. Texas now owns Canada. We are once again the biggest state in the Union and rightfully so...:D

Steve Blair
07-31-2008, 02:16 PM
Naw mate. Texas now owns Canada. We are once again the biggest state in the Union and rightfully so...:D

But we have more nukes than you do..... And once we ally with North Dakota, we'll have a respectable bomber fleet to supplement our missiles. [Boris voice from Goldeneye] We....are...inwincible!:D

wm
07-31-2008, 02:46 PM
But we have more nukes than you do..... And once we ally with North Dakota, we'll have a respectable bomber fleet to supplement our missiles. [Boris voice from Goldeneye] We....are...inwincible!:D

You'll have to get those folks in Minot to stop sending their nukes down to Louisiana--otherwise Tom, from his JRTC mole site, will figure out how to get them out of Cajun Land over to that Lone Star/Maple Leaf State/Republic/Dominion thingy.

I wonder how you combine "Blue Bonnets of Texas" with "Maple Leaf Forever" and "Oh Canada" to get a singable national anthem. :D

By the way, I also wonder whether the Habs, Senators, Leafs, and Stars can merge to bring about a hockey team that can win Lord Stanley's Cup? Even with all that talent to draw from, beating the Red Wings still looks tough.

Rex Brynen
07-31-2008, 04:43 PM
Naw mate. Texas now owns Canada. We are once again the biggest state in the Union and rightfully so...:D

Plus, we have Texas Rangers AND Mounties! How cool is that?

Take that, Montana Highway Patrol/Tunisian National Gendarmerie. :p


Actually, I did have a semi-serious point in posting the map, since--whatever the caveats that might be placed on measuring national economic power, and on how economic power contributes to military-strategic power--it does rather nicely highlight global disparities.

Steve Blair
07-31-2008, 04:50 PM
Plus, we have Texas Rangers AND Mounties! How cool is that?

Take that, Montana Highway Patrol/Tunisian National Gendarmerie. :p


Actually, I did have a semi-serious point in posting the map, since--whatever the caveats that might be placed on measuring national economic power, and on how economic power contributes to military-strategic power--it does rather nicely highlight global disparities.

Yeah...but our guys still have a number on their badges that commemorates vigilante action....:p

That and we DIDN'T have either singing Mountie movies or Chuck Norris pretending to be one of us......

And yeah, the point of the map is well-taken, both for the reasonably serious point you had and some of the comparisons that have arisen in its less serious wake.

wm
07-31-2008, 05:28 PM
That and we DIDN'T have either singing Mountie movies or Chuck Norris pretending to be one of us......


"I'm a lumberjack and that's okay . . ."

Tom Odom
07-31-2008, 05:50 PM
Quote:

Originally Posted by Steve Blair
That and we DIDN'T have either singing Mountie movies or Chuck Norris pretending to be one of us......

But we have Jerry Jeff Walker (http://www.jerryjeff.com/)and Ted Nugent (http://www.tednugent.com/)

As well as the legacies of Stevie Ray Vaughan (http://www.stevieray.com/)and Warren Zevon (http://www.warrenzevon.com/)

Besides Mounties are cool

Entropy
07-31-2008, 06:06 PM
Canada sounds dangerous (http://www.breitbart.com/article.php?id=080731164359.ewx3rtpg&show_article=1):


A passenger traveling on a bus across Canada's vast Western plains stabbed, gutted and decapitated a man seated next to him in an unexplained attack, a witness told media Thursday.

The victim had been sleeping before he was repeatedly stabbed in the chest by a man with a large knife, witness Garnet Caton told public broadcaster CBC.

The other 35 passengers and driver were jolted by "blood-curdling screams" and fled. "He must have stabbed him 50 times or 60 times," said Caton.

When Caton and two others returned to check on the victim, he said they saw the attacker "cutting the guy's head off and gutting him."

"While we were watching ... he calmly walked up to the front (of the bus) with the head in his hand and the knife and just calmly stared at us and dropped the head right in front of us."

Tom Odom
07-31-2008, 06:20 PM
Canada sounds dangerous (http://www.breitbart.com/article.php?id=080731164359.ewx3rtpg&show_article=1):

I was in a staff meeting yesterday. We could have used this guy...:eek:

Norfolk
07-31-2008, 09:08 PM
It's hot, humid, and it's been more than six weeks since the end of Hockey Night in Canada, with two more months until the new season starts again. Canada Dangerous? - ya got that right.:eek: If folks don't get some of this (http://www.youtube.com/watch?v=N1-25s4uwFQ&feature=related), they tend to get a little edgy and irritable, hence:


Canada sounds dangerous (http://www.breitbart.com/article.php?id=080731164359.ewx3rtpg&show_article=1)

And beating the Wings? Note which team jerseys spend more time flat on the ice (refer to vid at the link provided above).;)

Ken White
07-31-2008, 10:35 PM
and the fact that you chose Hockey and LaCrosse as national sports to emphasize that commitment... ;)

Ron Humphrey
08-01-2008, 02:37 AM
Is it just me or does this sound like some kind of ME type assasination. I mean the dude just up and goes to all the trouble to behead plus all the stabbing then just gives up. Wonder if we'll find out who was killed and things will start to click?

marct
08-02-2008, 03:50 PM
Is it just me or does this sound like some kind of ME type assasination. I mean the dude just up and goes to all the trouble to behead plus all the stabbing then just gives up. Wonder if we'll find out who was killed and things will start to click?

The latest information is here (http://www.cbc.ca/canada/story/2008/08/01/stabbing-victim.html).

Entropy
08-02-2008, 04:16 PM
The latest information is here (http://www.cbc.ca/canada/story/2008/08/01/stabbing-victim.html).

Very weird story....

Ron Humphrey
08-02-2008, 04:34 PM
The latest information is here (http://www.cbc.ca/canada/story/2008/08/01/stabbing-victim.html).


I stand by my prior statement even more

(We'll See):confused:

marct
08-02-2008, 05:41 PM
I agree Ron, totally weird. Personally, I blame it on news reports that the price of beer will be going up ;).

wm
08-04-2008, 11:01 AM
Here's (http://news.bbc.co.uk/2/hi/europe/7539944.stm) another "cut and run" story:


Gruesome crime shocks Greek isle
By Malcolm Brabant
BBC News, Athens

Police on the Greek island of Santorini have shot and injured a knifeman who decapitated his girlfriend and walked around the streets with her head.

Santorini--Hmmmm. Wasn't Stan there recently?

Schmedlap
08-04-2008, 04:28 PM
Is it just me or does this sound like some kind of ME type assasination. I mean the dude just up and goes to all the trouble to behead plus all the stabbing then just gives up. Wonder if we'll find out who was killed and things will start to click?

Very good question. This sounds like a case for The Head Detective.

http://thumbnail.search.aolcdn.com/vsthumb3/tn/44/0E/440E03F5AF49708EDAEA8A.jpg

Watcher In The Middle
08-10-2008, 03:49 PM
Natural-Gas Prices May Fall Next Year On Supply Surge
Dated: August 4, 2008
Cassandra Sweet, The Wall Street Journal

U.S. natural-gas prices could be in for a fall next year, when additional output from elsewhere in the world should enter the market.

Overseas production of gas that is supercooled into liquid form for ocean transport is set to increase by about one-third, to more than 11 trillion cubic feet by the end of next year, according to Waterborne Energy Inc., a Houston research firm that tracks the world-wide liquefied-natural-gas business. The U.S. sees LNG imports in 2009 surpassing last year's record levels.

"There is a huge bubble of LNG about to hit the market," said Waterborne President Steven Johnson.

Link to article (http://georgiandaily.com/index.php?option=com_content&task=view&id=5065&Itemid=74)

Now, apart from the effects on heating prices in much of the US, it also means that production (new drilling) is really paying off. That has some political ramifications here in the US, but's that's the really tiny part of the story.

The real story is that much of the production increase (and we're talking large increases here) is from places like the United States, Qatar, Indonesia, Nigeria, Russia, and even Yemen.

The reason this is important is that we are looking at a major supply "bubble" in LNG (Liquefied Natural Gas) supply over the next few years, so anybody (read: Russia) who was hoping to capitalize on constrained LNG supply is seeing those hopes evaporate before their eyes - not going to happen. Looks to be almost the opposite.

Russia's oil production looks to be almost stagnant, and internal politics aren't making future production increases likely.


Russia’s Bubbling Oil Troubles

Exacerbating the high oil prices are production problems in Russia, the world’s second largest oil exporter. Aging oil fields and a lack of infrastructure investment has led to the country’s first annual production decline in 10 years. Output fell 0.9% to 9.76 million barrels a day in the first five months 2008, Bloomberg reported.
Link to article (http://www.moneymorning.com/2008/06/25/declining-russian-oil-production-could-lead-to-200-oil-and-global-recession-says-deutsche-bank/)

What Russia has been doing is investing money and production resources into producing natural gas, because the payoff is faster than for increasing oil production. Oil takes longer and costs more to produce. But their increased production is coming into a market which is starting to look like a production glut, and the Russians are going to need the money, particularly with all their foreign adventures they are starting to get back into.

But for the USA, this natural gas "bubble" has the potential to be great news on several different fronts. We generate a fair percentage of our electricity supply (particularly in CA) from natural gas, and most Midwestern heating is natural gas, so stable prices would be a good thing compared to what the providers were projecting at the end of 2007 (massive increases).

Overall - Good News.

tequila
10-25-2008, 08:31 PM
Not a good thing when one of your major creditors talks like this:

U.S. has plundered world wealth with the dollar (http://www.reuters.com/article/companyNewsAndPR/idUSPEK466920081024) - People's Daily

Asia & Europe collaborating on global financial crisis (http://www.reuters.com/article/companyNewsAndPR/idUSEDW55222920081025?sp=true)

These moves strike at the heart of U.S. economic supremacy in the world, which is the basis for U.S. military and diplomatic supremacy. China is basically just talking #### right now, most likely bitter because their dollar bets are turning so bad, but the sentiment is there now that the USD should not remain the world's reserve currency forever.

This crisis will not be America's Suez moment, but that moment is rapidly approaching.

Schmedlap
10-26-2008, 02:03 AM
Browsing this old thread, I came across an earlier forecast. We are not in a depression, so I would not expect half of these to come true, but the economy is hurting and some have begun...

If the US ever suffered a significant depression or other economic calamity then the world would need to think of something quick, because our economy is "too big to fail." If we go down, then Japan and China are going to be holding some worthless paper
Japan's currency is now appreciating at a wild pace. Our currency may have begun a genuine rebound because other countries are feeling the pain that we have brought and our currency may be comparatively safer.

... oil producers are going to see demand plummet...
Price is down more than 50% off its peak just a few months ago, dropping into the low $60's per barrel even after the announced cut in production.

... every country with a current account surplus is going to be living off of its reserves...
Japan has just announced it's first trade deficit in 26 years.

... Africa and the UN get no more money...
Well, it probably will require a depression for that to ever occur.

... South America gets the double whammy of no more aid and less demand for their illicit drugs
No data on this, but I have seen reports in business publications that strippers and prostitutes are seeing significant (double-digit percentage) declines in their revenues. If that is the case, it seems likely that a similar decline in drug consumption is also occuring.

slapout9
10-26-2008, 03:15 AM
No data on this, but I have seen reports in business publications that strippers and prostitutes are seeing significant (double-digit percentage) declines in their revenues. If that is the case, it seems likely that a similar decline in drug consumption is also occuring.


People laugh at this stuff but what street prostitutes are paid/or not paid is one of the most reliable economic indicators I have ever seen. Also the number of NEW prostitutes is a very good indicator. Drug demand/price is not so accurate as far as decline because theft/burglaries ususally go up to cover the cost of drugs (which is happening and not being reported much in the media IMO) also puts more presssure on Hospital ER systems as people try to quit.

Schmedlap
10-26-2008, 02:40 PM
People laugh at this stuff but what street prostitutes are paid/or not paid is one of the most reliable economic indicators I have ever seen.

I definitely agree.


Drug demand/price is not so accurate as far as decline because theft/burglaries ususally go up to cover the cost of drugs (which is happening and not being reported much in the media IMO) also puts more presssure on Hospital ER systems as people try to quit.

If memory serves me right, this is kind of your area of expertise (the analysis, not the drug use). Here is one thought that I had on the topic - I'm curious as to your reaction... I can't see this as compensating completely for the loss in disposable/smokable cash, since the burglaries take time and are not always successful - there must still be some significant downward pressure on the price. If nothing else, the junkie can plead with his dealer, "everybody in this fricken neighborhood has got ADT, a shotgun, or both! I need more time or a more reasonable price!" If every one of his customers is pleading that way, the dealer needs to realize that it's a rough economy and face the unpleasant fact that he needs to lower his price.

Your thoughts?

When the downturn starts hitting the smut peddlers, you know that these are tough times. Last week I had to settle for an iPod Nano instead of the 160GB, full-sized iPod. Why isn't my Congressman doing something about this? I'm in law school right now and almost all of my classmates are worried about their student loans. After they drink a few hundred dollars per week at the bar and go out for dinner at a restaurant five or six times per week, they hardly have enough left over to pay the interest on their loans. I think that I can finally relate to what my grandparents endured in the 1930s.

slapout9
10-26-2008, 03:03 PM
Schmedlap, hard drug use is what economist call inelastic demand. It is a physical need not a want as the softer drugs are. So there is tremendous pressure on the user to get the money no matter what. Dealers do not usually negotiate with anyone if they sell hard drugs, soft drugs yes. That is why I said this activity is not as good an indicator as prostitution but it does have merit , just not as much.

You are in law school? check out the number of students who are turning to escorting as a way to make ends meet! I would do this in a very non-threatening way or they won't tell you. You will probably be shocked at the underground activity going on in this area. I new several strippers who put themselves through school that way. They worked 2 days a week(sometimes less), the rest of the time they concentrated on their studies to get very high GPA's.

Schmedlap
10-26-2008, 04:21 PM
You are in law school? check out the number of students who are turning to escorting as a way to make ends meet! I would do this in a very non-threatening way or they won't tell you. You will probably be shocked at the underground activity going on in this area.

I lived in an apartment building with lots of law students in DC and knew of several who were hard-working escorts. Here, my law class is very small, everyone knows each other well, and I am surprised that none of that is going on. They are all obsessed with just going out to eat for lunch and dinner and binge drinking all night - and complaining about the high cost of health insurance. If anyone is slipping out to do escort duty, then they're doing it at the expense of not sleeping AT ALL. I'm glad that our gov't subsidizes federal student loans for them and gives them grants. Otherwise, how could they ever afford the tuition? And we certainly need more lawyers, especially those with destructive spending habits and unhealthy lifestyles.

slapout9
10-26-2008, 04:35 PM
and we certainly need more lawyers, especially those with destructive spending habits and unhealthy lifestyles.

The little laugh icon is supposed to be here but I guess it was his break time.

120mm
10-27-2008, 02:43 PM
I lived in an apartment building with lots of law students in DC and knew of several who were hard-working escorts. Here, my law class is very small, everyone knows each other well, and I am surprised that none of that is going on. They are all obsessed with just going out to eat for lunch and dinner and binge drinking all night - and complaining about the high cost of health insurance. If anyone is slipping out to do escort duty, then they're doing it at the expense of not sleeping AT ALL. I'm glad that our gov't subsidizes federal student loans for them and gives them grants. Otherwise, how could they ever afford the tuition? And we certainly need more lawyers, especially those with destructive spending habits and unhealthy lifestyles.

I think you need to update your signature line to add another "post of the day" kudo....

slapout9
10-27-2008, 05:13 PM
Good article by James K. Galbraith on Americas Hybrid economy and what we really need to be doing. It's not Capitlism or Socialism it's Systemism!!! as in we need to plan stuff we want to do!

http://harpers.org/archive/2008/11/0082254

Shek
10-27-2008, 09:16 PM
Schmedlap, hard drug use is what economist call inelastic demand. It is a physical need not a want as the softer drugs are. So there is tremendous pressure on the user to get the money no matter what. Dealers do not usually negotiate with anyone if they sell hard drugs, soft drugs yes. That is why I said this activity is not as good an indicator as prostitution but it does have merit , just not as much.

http://www.youtube.com/watch?v=COf2bQEQ7Zw

slapout9
10-27-2008, 11:09 PM
Shek, that should be SWC video of the week;)

Shek
10-28-2008, 01:26 AM
Shek, that should be SWC video of the week;)

I figured you'd like the video. Sadly, since I don't get HBO, I haven't watched The Wire and so that was just a lucky find.

Schmedlap
03-14-2009, 05:40 PM
I'm considering selling my crystal ball on eBay.


If you owe the bank $100, then that is your problem. If you owe the bank $100 million, then that is the bank's problem. We owe trillions of dollars to the world. If something happens that makes us unable to make timely payments on that debt, then it will become the world's problem.

Update:

The U.S. sought to ease Chinese Premier Wen Jiabao's concern about the security of his country’s investments in U.S. government debt... China should seek to “fend off risks” as it diversifies its $1.95 trillion in foreign-exchange reserves, Wen said... the nation should seek guarantees that its Treasury holdings won’t be eroded by “reckless policies” ... “China won’t sell the U.S. debt now as that will only drive down Treasury prices, hurting not only the U.S. but also the value of its own investments,” said Shen Jianguang, a Hong Kong-based economist at China International Capital Corp., an investment bank partly owned by Morgan Stanley.
- via Bloomberg
(http://www.bloomberg.com/apps/news?pid=20601087&sid=agLiLPeFZCE4&refer=home)And...


The US is a large importing country for many goods. If we no longer purchase those goods, then it creates surplus supply in the exporting country, prices plummet, profits plummet, and the incentive to continue producing plummets. So, no, those countries would not consume their own goods. They would respond by dramatically scaling back production in the short term and closing down businesses over the long term.

Update:

The global financial crisis has finally and dramatically caught up with China... Exports in February slid by 25.7 per cent from a year earlier... imports dropped 24.1 per cent... The fallout may be felt across the Chinese economy, with the possibility of acceleration in the increase in unemployment and yet more slowing of consumption, despite a $600 billion stimulus package that the Government hopes will cushion the blow... Communist leaders worry that more job losses could spark unrest and are promising to spend heavily to create employment... Isaac Meng, an economist with BNP Paribas in Beijing, said ...“... It will have a pretty big impact on Chinese domestic demand. Probably 60 million to 70 million workers directly work in these export sectors, so there will be secondary impacts on capital expenditure, employment and consumption.”
- via UK Times (http://business.timesonline.co.uk/tol/business/economics/article5890640.ece)
“I don’t think that in the short term domestic consumption can make up for the loss of exports,” says Xiang Songzuo, an independent economist. “Exports have fallen quickly and consumption will grow more slowly”...
There are some signs that increased consumption might cushion the blow, however...
“It won’t be possible to make up for all our international losses, but we can compensate a little” through domestic sales, Ms. Qian says...The Beijing Department of Commerce arranged the same sort of meetings for Liu with retailers in the capital as it has done for all the companies at the fair. Three stores have expressed interest in his goods, he says, and “if things go well I think I can make up my losses.
“Still,” he adds wistfully, “I am looking forward to an economic recovery in the US.”
- via CS Monitor (http://features.csmonitor.com/economyrebuild/2009/03/12/china-tries-peddling-its-wares-in-china/)