Earlier quoted context omitted.
>"Our economy is fueled by consumerism and the service industry." You do know our country has the single largest manufacturing output in the world, right? Misleading soundbites are often repeated until they become popular wisdom.
Sorry if I sound like a Peter Schiff robot. I've been listening to him too much lately. I've been meaning to add some more optimistic readings/podcasts to my list. China surpassed us recently, and the US losing its hegemon status is very bad for the dollar. The only thing they have left to do (and are doing) is build up their military. They do have quite a few domestic political problems though, but analysts were alr…
The Economic News Isn't All Bleak
41–50 of 60 posts
Re: The Economic News Isn't All Bleak
#42Earlier quoted context omitted.
Gold will always be valuable... How do you know? While I'm all for world & class asset diversification, the whole reason is because I/we don't know.
1. It is needed for industrial/electronics purposes. 2. It is internationally recognized as being valuable, regardless of culture. That is, cultures as diverse as India, China, England, Russia, pan-Arabic (i.e. non-Jews in the Middle East) have all viewed gold as having value, and that over at least 1000 years of recorded history each. 3. It does not corrode or rot the way paper money does. In Israel they recently fo…
Great answer - thank you. If you have a blog/site you should definitely write about this.
Re: The Economic News Isn't All Bleak
#43Earlier quoted context omitted.
Sorry if I sound like a Peter Schiff robot. I've been listening to him too much lately. I've been meaning to add some more optimistic readings/podcasts to my list. China surpassed us recently, and the US losing its hegemon status is very bad for the dollar. The only thing they have left to do (and are doing) is build up their military. They do have quite a few domestic political problems though, but analysts were alr…
Nope: http://www.dol.gov/asp/media/reports/chartbook/2008-01/chart...
I think the data in that chart is from 2006, but I looked it up and I'm sorry, I must have heard wrong. Apparently, China will surpass the US in manufacturing in 2009 despite their unemployment rate in manufacturing being much higher lately than ours. Either way, the general consensus is that the question is not if they surpass us but when. I would post links but I'm on my phone. My friend from China says not to trust Chinese numbers anyway, haha.
I'm not trying to spout doom and gloom, I just find this stuff interesting. I wish I understood macro and history/politics better so I could make my own predictions that might be worth paying attention to.
Re: The Economic News Isn't All Bleak
#44Earlier quoted context omitted.
If massive inflation occurs, you're pretty much screwed no matter what. It is not currently possible to live fully, truly off the grid in the manner in which anybody posting to Hacker News is accustomed. Planning for events that you can do nothing about is a waste of time; the fact that that is unfortunate changes nothing. (Which is not to say some reasonable preparation for emergencies is a bad idea. I'm just saying…
I am amazed at the hatred for gold among some HN'ers. This is the second thread I have seen where gold was mentioned, and the second time I have seen a vitriolic response about gold. Gold will always be valuable and it will always be part of a sane person's plan for dealing with a "things are going to crap" scenario. Along with some form of food storage to deal with logistic interrruptions and some form of personal d…
Gold will always be valuable
For varying values of valuable. Our bold leader Gordon Brown sold off the UK's gold reserves for about a third of the current market price. He even announced well in advance that he was planning to dump a load of gold on the market, so the price dropped even further. Gold's a great asset but it's not the be-all and end-all.
Re: The Economic News Isn't All Bleak
#45I keep saying it - things are fine. Real value has not been wiped out - the amount of real value lost is not big when compared to the general economic numbers. The U.S has a bigger problem than the rest of the world, but the U.S is still very dynamic, and many world currencies still measure against the USD. China is developing fast, but a lot of the development does not go very deep. So China is not yet ready to func…
The fundementals of our role within the global economy are anything but sound . Our economy is fueled by consumerism and the service industry. When shit goes down, which do you think has a chance of surviving when countries like China decide to stop subsidizing our spending (by holding down their currencies) in order to enjoy the fruits of their own labor themselves? Forthcoming political unrest in some of these coun…
China has a very surface economy. America has a wide number of skilled labourers, not just in the prominent professions like engineers and doctors, but also things like human resources, accounting, etc. There is massive skill value in the U.S, and even if there were a total destruction of the money markets, the skills are not going anywhere, making it very easy to recreate industries. China does not have the same - they have a large quantity of unskilled labour.
Most electronic components are produced in China. If China decides to increase their currency, their electronics will get expensive, and phillipines, malaysia, thailand will be happy to take over this role.
Political unrest is really the least problem we face right now. Since I was born in 1980, I cannot remember a time when the news had so little conflict.
I'm not saying the U.S is perfect, the U.S has big problems. What I think the root cause of the problems is is that a lot of power is given to big companies. It's a sort of self-sustaining monopoly. Americans are now looking upwards - look at big VC companies to give them money, look at corporations for jobs. Small to medium business should be the backbone of any company, not massive shareholder companies.
Re: The Economic News Isn't All Bleak
#46Earlier quoted context omitted.
Do you realize that by suggesting to "keep your savings up" you are predicting stable purchasing power of US dollar? It's entirely possible for someone to play it safe, stick to cash savings and then get burned if/when dollar is devalued by 75% simialr to Argentina 2001, Russia 1998 or Iceland 2008.
If massive inflation occurs, you're pretty much screwed no matter what. It is not currently possible to live fully, truly off the grid in the manner in which anybody posting to Hacker News is accustomed. Planning for events that you can do nothing about is a waste of time; the fact that that is unfortunate changes nothing. (Which is not to say some reasonable preparation for emergencies is a bad idea. I'm just saying…
False choice fallacy: either "no hyperinflation" or "rampaging mobs".
In fact several countries have survived hyperinflation without the mobs. Once again, Russia 1998, Argentina 2001, Icelad 2008.
On the other hand USA 1930 and Nazi Germany saw confiscation of gold by the government and it might make sense to prepare for that as well by storing your gold abroad.
Re: The Economic News Isn't All Bleak
#47No comment on whether the future is bleak or not. But extending beyond economics, also consider the US political commentary of the past year and a half. It was, not to put too fine a point on it, shit . Take the conventional wisdom for any day of your choice four weeks before the election to a year before the election, then come back to it two months later. Uniformly, the boldly-made predictions and much-blabbered co…
Great post. One thing I found interesting about this piece was the blatant revisionism on display in the second paragraph of the article: "less than two years ago, conventional wisdom dictated that the housing bubble would be painful but that global economic growth would remain stable." Forgive me, Mr. Writer, but my recollection is that less than two years ago, few people in the mainstream were acknowledging that a…
It has something to do with economics of punditry. Basically, for pundits incentives are against voicing dissent. If you go against the conventional wisdom and your predictions turn out to be right, you'll still have hard time getting your voice heard, since it will probably drown in a cacophony of "nobody could have seen this coming" type mainstream media flood. On the other hand, if you dissent from the crowd and turn out to be wrong, you'll be labeled a lunatic and sent to oblivion. So the punishment and the risk you're taking by far outweighs any possible rewards. Thus we get herding; pundits' predictions will always be closer to each other than they are to the real value of the thing being predicted.
Re: The Economic News Isn't All Bleak
#48No comment on whether the future is bleak or not. But extending beyond economics, also consider the US political commentary of the past year and a half. It was, not to put too fine a point on it, shit . Take the conventional wisdom for any day of your choice four weeks before the election to a year before the election, then come back to it two months later. Uniformly, the boldly-made predictions and much-blabbered co…
Great post. One thing I found interesting about this piece was the blatant revisionism on display in the second paragraph of the article: "less than two years ago, conventional wisdom dictated that the housing bubble would be painful but that global economic growth would remain stable." Forgive me, Mr. Writer, but my recollection is that less than two years ago, few people in the mainstream were acknowledging that a…
If you watched any of the stock punditry two years ago, everybody knew there was a housing bubble. You could tell by looking at the charts. The discussion, which as I recall went on for a year, would how hard and how localized the "pop" would be. Safe money was at least betting on the market being overvalued in major cities and stayed away from REITS.
It was common knowledge.
That's how I remember it, anyway. You might be confusing this with the mortgage crisis, which is an entirely different (but related) matter.
Re: The Economic News Isn't All Bleak
#49Earlier quoted context omitted.
1. It is needed for industrial/electronics purposes. 2. It is internationally recognized as being valuable, regardless of culture. That is, cultures as diverse as India, China, England, Russia, pan-Arabic (i.e. non-Jews in the Middle East) have all viewed gold as having value, and that over at least 1000 years of recorded history each. 3. It does not corrode or rot the way paper money does. In Israel they recently fo…
Great answer - thank you. If you have a blog/site you should definitely write about this.
The internet is full of gold bug blogs.
Here's one response to the gold bug arguments, by Nobel prize winner Krugman:
http://web.mit.edu/krugman/www/goldbug.html
Even libertarians like Arnold Kling don't really have much time for the gold standard:
http://econlog.econlib.org/archives/2007/01/the_new_deal_an.... (and in other articles)
Generally, it's not regarded as territory for "serious economists", although of course it is always possible that serious economists are wrong.
Re: The Economic News Isn't All Bleak
#50Earlier quoted context omitted.
If massive inflation occurs, you're pretty much screwed no matter what. It is not currently possible to live fully, truly off the grid in the manner in which anybody posting to Hacker News is accustomed. Planning for events that you can do nothing about is a waste of time; the fact that that is unfortunate changes nothing. (Which is not to say some reasonable preparation for emergencies is a bad idea. I'm just saying…
False choice fallacy: either "no hyperinflation" or "rampaging mobs". In fact several countries have survived hyperinflation without the mobs. Once again, Russia 1998, Argentina 2001, Icelad 2008. On the other hand USA 1930 and Nazi Germany saw confiscation of gold by the government and it might make sense to prepare for that as well by storing your gold abroad.
Actually, rather than a false choice fallacy, my real point is that no matter how prepared you are, you can always hypothesize a situation for which your preparation is insufficient. Concluding that therefore, any given action (in this case, saving dollars) is a bad idea because it "might not be enough" is an invalid argument. One must argue about probabilities. I personally do not rate a hyperinflation of the US dollar without massive upheaval a very strong probability; your other cited examples weren't the foundation of the global economy. (I rate it much lower than either no hyperinflation, or hyperinflation with massive upheaval. The people stealing your goods in the massive upheaval case is likely to be the government, so merely "a gun" won't cut it.)