American Economics Thread
- Thread starter Bernard
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manqiangrexue
Brigadier
Grind to a halt? Oh no, so scary American power! I guess that means that Russia's economy won't be growing and it'll be scared into leaving the Ukraine, right? Right?
"Last week, the International Monetary Fund (IMF) underlined the resilience of the Russian economy when it upgraded its forecast growth for this year to 2.6% from 1.1%.
Based on the IMF's figures, the Russian economy grew faster than the whole G7 last year, and will do so again in 2024."
LOL America's relative decline means it, plus 35 of its dogs and henchmen together, can't even win an economic war with Russia much less China.
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Nowhere have I said to exclude stocks, which I would definitely consider wealth.
I have been specific that median wealth (excluding property gains which cannot be easily realised) has declined by $10K.
So it goes back to the original point which is why people in the US feel poorer. This should be obvious.
You have to treat property separately, which is why you have articles reporting on this specific point on property wealth gains versus everything.
Fair enough. But I think there is enough reporting to suggest that inflation has been systematically undercounted in the US
I have no issue with corporations reporting on illiquid assets as assets, because corporations treat property as a cost of doing business or their property holdings are explicitly profit-seeking ventures that can be liquidated.
My point is that for the average individual, property is primarily a means of consumption ie. they need somewhere to live.
Property as an investment vehicle is secondary.
On a side note, with property as an investment vehicle, you have to treat the land component as a scarce appreciating asset, whilst the actual property structure will be consumed and will deteriorate as the years pass by.
Bloody hell. How many households do you know who operate financial accounts with a P&L and Balance Sheet?
This is way beyond the capacity or the capability of the average household.
There's a fundamental difference in psychology between wealth in the forms of stocks that can be liquidated and additional borrowing on a property with a HELOC.
A HELOC is seen as borrowing, presumably at high interest rates. You don't do this unless you have no choice.
In comparison, liquidating stocks is locking in speculative gains you have already attained.
Unlike property which you have to keep as a place to live and whose value is fuzzy (sometimes very much so), stocks are undoubtedly a speculative venture which is seen as wealth.
So declines in stock prices have a direct impact on if people feel wealthy.
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And leaving aside the 2019-2022 data from the Fed SCF, let's see how people are faring in 2023.
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"A staggering 80% of American households are worse off than they were before COVID-19 — how to shore up your finances now before a strong current carries them away
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The poorest 40% of households suffered an 8% drop in cash savings and the middle 40% (the U.S. middle class) also saw their bank deposits and other liquid assets topple. Only the wealthiest 20% of households are still enjoying the extra cash they stockpiled during the pandemic, with their savings about 8% above where they were in March 2020."
finance.yahoo.com/news/staggering-80-american-households-worse-120000535.html
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NEW YORK (AP) — About 2 in 3 Americans say their household expenses have risen over the last year, but only about 1 in 4 say their income has increased in the same period, according to a new poll from The Associated Press-NORC Center for Public Affairs Research.
apnews.com/article/inflation-debt-poll-personal-finance-economy-dd4c88e2076d1fd3f85c51fb8992583b
That article is pure cope. Why would Sovcomflot need Western insurance anyway? The Russian government can self-insure its own ships. The G7 price cap is useless with regards to Russian owned ships. And if they continue going after the Greek ship owners, they will just sell their ships to someone else in the UAE or India, and operate with non Western insurance. Or do you think they will continue to operate oil tanker ships without any oil to carry?
The "official" Urals oil price benchmark is getting increasingly unreliable as well as Russia continues to move its Urals shipments to alternative schemes outside the Western economic system.
Well the EU has a larger industrial portion relative to GDP compared to the US, and consumer spending relative to the size of the economy is also lower, so Japan and Korea are a better comparison based on economic structure, also the EU ran a small trade surplus until recently. Also the EU has entire industries which the US does not have like civilian shipbuilding and ASML.
Come on. It is Bloomberg and that should tell you something, It is political tabloid.
The European electronics and software industry is basically a disaster. Competition from Asia decimated the European electronics sector, and allowing US software companies to run roughshod over the European software sector has quashed it in its cradle. Just think about it. Linux was developed by a guy from Finland. Where is he living now? Skype. Also a European software company. Owned by Microsoft. MySQL AB. Bought by Oracle. Star Division (who developed StarOffice which became OpenOffice/LibreOffice). Bought by Sun Microsystems (now Oracle). Konqueror was co-opted by Apple (Safari) and Google (Chrome).
So next time you hear that Europe does not develop software, just consider that. They do. They just cannot compete financially with US software conglomerates. Huge US companies with loads more capital simply squash these companies in their infancy or buy them outright. So they never grow to be large.
The EU competition regulating authorities are also useless in front of US interests. Would the US have allowed a similar deal to the one where Microsoft bought Nokia? Imagine a Chinese company buying Apple for example. Good luck with that.
As for ASML, the light source is made in the US, some of the manufacturing facilities are also located in the US. So I wouldn't go as far as claiming it is fully European. Now that European industry is being rendered uncompetitive thanks to high energy prices, it will basically become an energy island similar to Japan as it cuts itself out from Russian energy. And much the same thing that happened to Japanese industry will happen to the European one.
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Substantial long-run convergence in U.S. national income; poor states have grown substantially faster than rich states