Economy Actually Getting Worst

Discussion in 'Economy' started by Nova78, Apr 9, 2012.

  1. Nova78
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    Nova78 Silver Member

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    Michael Pento: Is the Economy Really Healing?

    Please don't believe the hype that the American economy is healing. While it is true that some data is showing improvement, the true fundamentals of the economy continue to erode.

    America's trade deficit hit $52.6 billion in January. That's the highest level since October of 2008 and is clear evidence that we have fully reverted back to our under production, under saving and overconsumption habits with alacrity.

    The nation's debt has now eclipsed 100% of our GDP, after 13 straight quarters of paying down debt households have now started to re-leverage their balance sheets and total non-financial debt is at a record 250% of GDP. The sad truth is that the U.S. economy is more addicted to debt than at any other time in history.

    But most importantly, please don't believe the lie that the Fed's money printing is laying fallow at the central bank and that inflation isn't harming the American middle class and the economy. Consumer prices rose 0.4% in the month of February alone and year over year increases in food and gas prices are 5% and 12% respectively. Money supply growth is up 10% in the past 12 months and banks are now buying U.S. Treasuries with reckless abandon.

    Commercial banks have purchased $78.2 billion in Treasury and agency debt in January and February of 2012. That's already more than the entire amount of purchases made in all of 2011 and is on track to add nearly a half-trillion dollars of government debt to commercial banks' balance sheets. The Fed buys these Treasuries from banks and that enables them to buy more debt from the government. Using that process, the Fed is able to monetize both existing and newly issued Treasury debt. Since the government gets the money first and distributes it into the economy, the money supply increases without any direct benefit of capital goods creation.

    What a Country, or should we say what a Government.:clap2::clap2:
     
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  2. sparky
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    sparky VIP Member

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    please Nova, prosperity is just around the corner......~S~
     
  3. Toro
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    Toro Diamond Member

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    The economy is improving. Every single indicator says such.
     
  4. ThinkCritically
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    ThinkCritically Open to opinion

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    Buckle your seat belts ladies and gentlemen we are going to be experiencing some turbulence in the near future.

    It looks like the 42 year experiment with fiat is starting to rear its head. History repeats itself.
     
  5. ThinkCritically
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    ThinkCritically Open to opinion

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    I hope you are right and i'm wrong....
     
  6. uscitizen
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    uscitizen Senior Member

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    We are on the level part of a step going down a staircase.
    How far down we will go?
    Depends on if we as a country remove our cranium from our anal orifices.

    Globalization ensures that the richer countries will at best stay pretty stagnant while the poorer countries will improve their standard of living.
    It is inevitable.
    And no it is not a zero sum game just fairly close to one in reality.
     
  7. B. Kidd
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    B. Kidd Gold Member

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    As far as the market and my pension fund is concerned............think globally, while Main St. is local.
    Glad I'm retired and no longer depend on Main St..
    That is all.
    Resume your normal activities.
     
  8. ThinkCritically
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    ThinkCritically Open to opinion

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    The Global economy is in for an even bumpier ride. If your retirement is invested in the global market I would diversify as much as possible. Honestly if my retirement was in the global market place right now I wouldn't be able to sleep at night. There are so many factors that can go wrong there, It will be a volatile but up hill climb though for developing nations in the long-run.

    I also believe that the US middle class will continue to erode as capital flight continues throughout the world. The labor class of america is gone and will not return for quite some time into the future. This means increasing wealth disparities and political turmoil for us in the future. Add into the mix the possibility of a double dip and you have the making of another huge structural change in the labor force as generations of middle class wealth disappears over night.

    The Fed might pull it off for us if they are able to retract all the money from the economy quickly enough once spending picks up...if it ever picks up.
     
  9. Nova78
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    Nova78 Silver Member

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    :lol::lol:16,000,000,000,000 U.S National Debt.:lol::lol:
     
  10. PLYMCO_PILGRIM
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    PLYMCO_PILGRIM Gold Member

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    They don't really look at the debt when deciding how "healthy" the economy is.

    However you do make a good point that 16trillion in debt does not bode well for any of us, nor does the noticeable inflation on goods like food, fuel, and clothing.
     

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