on the u.s. economy's future
- From: alfalfa@xxxxxxxxxxxx
- Date: 5 Mar 2006 17:39:38 -0800
The U.S. economy is now experiencing some challenges:
*Social Security is bankrupt (for all practical purposes)
*FDIC bank deposits insurance is bankrupt (for all practical purposes)
*Too much U.S. dollar paper currency is being printed (by both
U.S. government and counterfeiters).
*U.S. government is spending with massive deficits, and President Bush
wants $500 billion for wars and Hurricane Katrina relief.
*Total American debt is several tens of trillions of dollars, which is
more money than exists on the planet, over 2 years of U.S. GDP.
*Private corporation pension plans are going bankrupt left and right.
*Average credit card debt of an American family is $10,000.
*The U.S. dollar currency is forcast by leading economists to fall in
Gold has shot up almost 100 US dollars per ounce since
October 2005, about 20% higher in dollar terms.
*The annual savings rate in the U.S. is now negative.
*The U.S. government announced, in November 2005, that as of March
2006,
it would no longer be reporting the economic statistic M3, which is a
measure of the amount of currency in circulation. This might imply
that the U.S. government is not 100.00% confident about its currency.
*Russia, China and some OPEC countries are starting to beef up their
gold reserves and move out of U.S. dollar reserves.
Now, granted, these indicators don't paint a rosy picture of the U.S.
economy and it is possible that a major economic meltdown could occur,
if we are to believe those crazy doomsday economists. But I believe
that the U.S. economy will prevail. Why? Because it has great
economic fundamentals -- technology, industry, manufacturing, natural
resources,
skilled workforce, relatively honest business environment, stable
political system. Foreign investors will continue to pour capital
into the U.S. because it is a safe economy compared to the other
predatory economies out there. So, while the dollar and the value of
retirement savings and other U.S. dollar savings may nose-dive, the
rest of the economy should be good.
The following would likely occur: the dollar crashes, so there is a run
on
savings in banks, and banks will fail because FDIC can only pay back
deposits using devalued U.S. dollar cash, people will lose savings, so
they cannot buy houses and will have to prolong retirement by 10 years,
gold will skyrocket in value, and the U.S. government will be forced
to devalue the U.S. dollar, so that, at least the U.S. can pay
back the Chinese with barrels of paper printed with colorful $100-bill
engravings. After all, the U.S. must pay for the tons of cheap but
high-quality merchandise it imported from the Chinese, thanks to
the Chinese government artificially devaluing Chinese currency.
Now, I feel sorry for the Chinese manual laborer who manufactured
all this stuff for the U.S. for wages of $1 a day, and I feel
sorry for the Walmart employee who sold this Chinese-made stuff cheap,
while getting paid poverty-level wages, having health care paid by the
U.S. government via Medicaid, and putting lots of American small
businesses
out of business, while the Walmart people made billions. The joke's on
them--tee hee! Snicker snicker. But after zeroing out savings, I
think the U.S. will continue to fly forward. I'd still invest in the
U.S.
.
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