Robert Munn <[email protected]> wrote: > > it mirrors the hollowing out of the middle class that is underway. > middle-skill office work is vanishing in the united states. sooner or > later the effect is going to cause the us economy to completely > crater. and apple will still sell millions of ipads a year because > demand elsewhere in the world is booming. >
Exactly. 3 Things here: (1.) A shrinking economy doesn't mean nobody can sell anything, it means no growth or shrinking. E.g., 5 years ago Joe Blow would've bought an iPad, gone to Hawaii, bought a Starbucks everyday, and taken the family out twice a week. This year Joe bought an iPad. (2.) All growth for the last decade is a pure fantasy: when you adjust growth for leverage, it's zero. That's pretty scary in its implication if you only consider the types of expenses people have taken on in the last decade. (3.) All of the structural forces that have brewing for 30 years leading up to the collapse in 2007 are now worse. Further, the global economy is worse so there's nobody to bail us out, and the Fed has been printing money like mad and that can't go on. If anybody is looking for a model of how to handle such a situation, I think Iceland is doing a good job. They're basically telling the bank bold holders to stick it. Assuming no more global shocks they may actually recover quickly. As to the US, when you adjust for "off balance sheet" liabilities (eg., student loans) we're in debt at 5x GDP. Bill Gross does a good job laying this all out here: http://www.pimco.com/EN/Insights/Pages/Skunked.aspx ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:336842 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
