Re: Economic `Armageddon' predicted

From: Terje Johan Abrahamsen (me_at_privacy.net)
Date: 11/26/04 

Date: Fri, 26 Nov 2004 22:22:49 +0100

"zerge" <zerge@hotmail.com> wrote in message
news:f0a1621c.0411261304.40d4c199@posting.google.com...
> "Terje Johan Abrahamsen" <terjej@mailandnews.com> wrote in message
news:<30mcdtF32mo28U1@uni-berlin.de>...
> > "Werner Hetzner" <whetzner@mac.com> wrote in message
> > news:41A5F663.90108@mac.com...
> > >
> > >
> > > sam fisher wrote:
> > >
> > > >You seriously think that "consumption" is an esoteric art locked in
by
> > > >americans thank to a special national gene, the "consumer gene"?
> > > >True, China would feel a shock if the dollar fells off the cliff,
that's
> > why
> > > >they are fighting it so vigourously. But most likely scenario is a
> > prolonged
> > > >soft landing of the dollar over the next few years, nothing dramatic
> > > >(hopefully!) and at the end of the tunnel Asia and Europe will emerge
as
> > the
> > > >new economic "superpowers" while the US population will be
empoverished,
> > > >radicalized and desperate. You can thank this to 20 years of
republican
> > > >voodoo economics and christian fundamentalist education.
> > > >
> > >
> > > Don't bet on an Emerging Europe because they are worse off than
> > > we.Welfare state economics has that effect. Check out the unemployment
> > > numbers. Also pay attention to rising political tensions - even in
> > > Sweden. Demand for more welfare state benefits on someone else's dime
> > > and a shrinking economy has that effect.
> > >
> >
> > Funny you mention Sweden. If Sweden had been a state in the US, it would
> > have been the poorest. West Virginia the median familyincome 280 000
SKR. In
> > Sweden the median is 276k.
>
> Are you adjusting for purchasing power parity?

If we bring purchasing power parity into the equation the picture gets even
dimmer for Europe.

We can for example use the BigMac index from the Economist.
http://www.oanda.com/products/bigmac/bigmac.shtml

An american pay in average (2003) 2,65 dollar for a BigMac. A Swede have to
pay 4.45 dollar. Nearly twice as much, while the income is way below. West
Virginia is the state in the US that score the lowest, but can still buy
twice as much as the average Swede.....

 (http://www.finfacts.com/costofliving4.htm). The cost of living index shows
Oslo at 130 while Stockholm is at 109. New York is the most expensive in the
US, and has a value of 100. Cleveland has an index of 78 for comparison.

In other words, if price index is included, the difference would be a lot
larger. In material standard of living, the US is way ahead.....