"puts a whole different color on it, doesn't it?"
Nope. Unless you're talking to someone who was hiding in a bomb shelter, it doesn't change a thing.
Strikes me as an intermediate state in a changing dynamic. I don't believe anybody knows for sure how everything will come out.
Not Bernanke, not Geithner, not CBs, not the Chinese, nobody. Everybody's guessing.
I read forecasts from insanely bullish to apocalyptic. From either point of view, the best of them make a lot of sense and are well-reasoned.
Bullish or bearish, every report contains the key weasel words: "might", "may", "if", "could", "possibly".
But nobody knows (for instance) whether recent USD fluctuations are from lack of confidence in the US economy, monetary policy or both, and in what proportion.
There's a whole "wall of worry" thing happening.
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The US was already in deep trouble long before this crisis.
Message 25531768
Already drowning in debt. Now the US is drowning in more debt. So you drown in 20 feet of water, or 30 feet of water... what's the difference?
But 5 years ago, nobody was posting about debt! They were already in 'way over their heads, and they didn't even care. Now they do.
So now it's a gamble: keep going, try to mitigate the crisis, try to stimulate, while also trying to get the economy back on the tracks. Try to cut entitlement costs; rationalize health care. Invest in infrastructure for a more competitive economy. But the moment inflows dry up, the gamble fails. There must be drastic cutbacks: entitlement programs, military expenditures, everywhere, everything, right across the board.
Falling USD is a benefit to US exporters - as long as it doesn't fall through the floor. The US will need hard returns, and a positive balance of trade: without that, there's no hope.
It's a huge gamble, and it's looking shaky. But it hasn't failed. Not yet.
Lots of experts, lots of forecasts, good and bad.
Apocalypse Now? Not so far. Apocalypse Later? Maybe.
Jim |
