American Economics Thread

[xypher]

Japan got there mostly through currency appreciation though, thanks to Plaza Accord. By PPP I think they peaked in the 80's.

I know but we are talking about nominal numbers, don't we? If we are talking about PPP, then China has been larger than the US for quite some time now.

USA $23.04 trillion

It is kinda smaller than I expected, I thought it would be in the $23.4-23.6 trillion range. With all that printing, they were only able to achieve 5.5% and that is with the low base of 2020, meaning that the real growth over two years was 0.965 * 1.055 ~= 1.018 or 1.8%.

 

[FairAndUnbiased]

I know but we are talking about nominal numbers, don't we? If we are talking about PPP, then China has been larger than the US for quite some time now.

It is kinda smaller than I expected, I thought it would be in the $23.4-23.6 trillion range. With all that printing, they were only able to achieve 5.5% and that is with the low base of 2020, meaning that the real growth over two years was 0.965 * 1.055 ~= 1.018 or 1.8%.

its hard to deal with Soviet or Axis comparisons in nominal, since in WW2 and early Cold War the USD system was not as dominant as today, governments traded less between blocs, etc. The USSR only released GDP statistics in the 70s, prior to that it had to be extrapolated.

 

[mossen]

Soviet Union peaked relative to US GDP in the 1970's at around ~60% US GDP/PPP.

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(note the intersection is at 2018).

For reference,

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.

Thanks for the data. A major difference between WWII and now is that today all of Europe (except Russia and Belarus) are essentially puppets of the US empire. Add Australia, NZ, Canada and arguably Japan too. So China is facing a much bigger rival than just the US, since the combined GDP of this Anglo colonial system is 2-3X larger than China is today.

 

[mossen]

only a fool will fancy he can inflate away his debt obligation. inflation can only be tamed when real interest rate is positive. and the graph you used certainly assume the 9 trillion sit on Fed's balance are not debt.

Inflation is currently driven to a significant extent by sky-rocketing energy prices. These prices will stagnate and eventually climb back down in the coming 12-18 months, which means inflation pressures will ease. On top of that, the Fed will begin to taper QE and begin rate hikes. I wouldn't be too worried about inflation in the situation of the US.

If it wanted to, the Fed can completely self-fund the US financing needs without any risk since the US is the hegemon of the world's financial system, i.e. it has exorbitant privilege. This is something a lot of people struggle to understand, especially "hard money" types.

More generally, while I don't think inflation above 5% is good, there's nothing inherently to fear from 3-4% inflation to inflate away the debt. That's what happened to the UK's post-Napoleonic debt. It still has some debt that it pays from that era, over 200 years later. Shows you that "paying off your debt" is irrelevant. What matters is whether it reduces over time in relation to your economic size and how your debt-carrying capacity is. In this regard, moderate inflation (3-4%) is helpful. Deflation is a much bigger problem; just ask the Japanese.

 

[9dashline]

Inflation is driven to a significant extent by sky-rocketing energy prices. These will stagnate and eventually climb back down in the coming 12-18 months, which means inflation pressures will ease. The Fed can completely self-fund the US financing needs without any risk since the US is the hegemon of the world's financial system, i.e. it has exorbitant privilege. This is something a lot of people struggle to understand, especially clueless "hard money" types.

More generally, while I don't think inflation above 5% is good, there's nothing inherently to fear from 3-4% to inflate away the debt. That's what happened to the UK's post-Napoleonic debt. It still has some debt that it pays from that era, over 200 years later. Shows you that "paying off your debt" is irrelevant. What matters is whether it reduces over time in relation to your economic size and how your debt-carrying capacity is.

Wrong, inflation (esp in the US) will only get exponentially worse and worse from here on out, there is no stopping it, especially in the long term trend

The Energy Epiphany

Suffice it to say, today's headline news is "Bitcoin dives after Kazakhstan kills internet". So apparently 'Peak Oil' is the precursor to civil war and the breakup of the fabric of society everywhere since the rise in fuel prices is what sparked the protests that turned deadly in Kazakhstan...

www.sinodefenceforum.com

 

[FairAndUnbiased]

Thanks for the data. A major difference between WWII and now is that today all of Europe (except Russia and Belarus) are essentially puppets of the US empire. Add Australia, NZ, Canada and arguably Japan too. So China is facing a much bigger rival than just the US, since the combined GDP of this Anglo colonial system is 2-3X larger than China is today.

Still a far better position than Warsaw Pact where everyone had small economies except the Soviets themselves, NATO actually had a larger population and most of all, NATO was growing faster.

Also these are by PPP, not nominal.

 

[nugroho]

GDP for 2021

China $17.74 trillion
USA $23.04 trillion

the gap = $5.3 trillion

Are US GDP and China GDP can be compared apple to apple ? As far as I know, there is a lot of differences to count GDP in both countries, and if China count their GDP like US does, the amount will be far bigger than 17.74 trillion USD

 

[manqiangrexue]

Are US GDP and China GDP can be compared apple to apple ? As far as I know, there is a lot of differences to count GDP in both countries, and if China count their GDP like US does, the amount will be far bigger than 17.74 trillion USD

It's not at all apples to apples. The US counts everything real and imaginary in its GDP; it pretends every home-owner pays rent to himself every month. It puffs up education costs and hospital bills to push "growth" and is basically a man with broken legs pretending to be standing by inserting rebars into his pants which are the crazy amounts of stimulus payments. China, on the other hand, purposefully hides its real GDP so that it can remain a developing nation for as long as possible and in addition, its market is by nature, more hidden and less regulated as it has a massive gray market of untaxed cash retail transactions in the form of its vast street markets.

Basically, China is a man who is slightly shorter sitting down than a US that is standing tip-toed on 8 inch platform heels and counts his Marge Simpson hairstyle into his height. That's what happens when you have 2 parties trying to kill each other at elections every 4 years; everybody turns into a nutcase trying to look 10 feet tall to win.

 

[horse]

Thanks for the data. A major difference between WWII and now is that today all of Europe (except Russia and Belarus) are essentially puppets of the US empire. Add Australia, NZ, Canada and arguably Japan too. So China is facing a much bigger rival than just the US, since the combined GDP of this Anglo colonial system is 2-3X larger than China is today.

That is a completely losing strategy for the United States to assume everyone is one block and are on the same page.

If they do that, they will spend more time trying to keep it together, than to actually compete with China.

That is why China does not react much to those pronouncements.

They might taunt it, the CCP saying these small cliques serve no actual purpose.

 

[Tyler]

Thanks for the data. A major difference between WWII and now is that today all of Europe (except Russia and Belarus) are essentially puppets of the US empire. Add Australia, NZ, Canada and arguably Japan too. So China is facing a much bigger rival than just the US, since the combined GDP of this Anglo colonial system is 2-3X larger than China is today.

These puppets are falling rapidly, especially Japan that will see its economy crumbling.