success at pic post :0)
btw, stratfor says economic corner has been turned, which necessarily mean another leg down must be soon be, just in in-tray
Turning an Economic Corner
THE U.S. RECESSION evidently ended in the third quarter, with the U.S. Commerce Department’s Bureau of Economic Analysis announcing Thursday that it estimated gross domestic product growth in that period at 3.5 percent, annualized. The United States is not the first country to pull out of the negative growth period that resulted from the global financial crisis, but as the world's largest economy, the shift represents a truly impressive turnaround. A strong U.S. economy has implications around the world. For one thing, the prospect of rising U.S. consumer demand causes net-exporting countries to slaver with excitement.
However, while rising consumer demand did have a strong role in the uptick, observers have been quick to point out that it is an unsustainable surge. It’s hard to argue with that logic, given that Thursday's news was clear evidence that the U.S. stimulus programs have been having an impact. Stimulus packages aren’t designed to replace a real recovery; they are intended to push government spending into a stagnant economy to kick-start confidence and get more money flowing through the system. The recovery process will require a sustained uptick in consumer spending, investor and consumer confidence -- and, of course, job growth.
President Barack Obama’s administration had a tempered response to Thursday's report, citing concerns about job growth. The reaction in the U.S. media has been downright gloomy.
"But we would like to point out that, despite the aforementioned qualifications, 3.5 percent annualized growth really is quite good news."
But we would like to point out that, despite the aforementioned qualifications, 3.5 percent annualized growth really is quite good news. It has been just about a year since the U.S. financial industry was brought to its knees, and the United States still managed to add $150 billion to its GDP in the past quarter alone. Not bad.
The relatively pessimistic reaction in the United States, however, fits with the contradictory and complex American psyche. The American nature is one of duality: The mentality swings wildly to great heights of hubris, only to collapse into insecurity and anxiety. This anxiety is rooted in a number of enormous shocks that have interrupted periods of prosperity -- from the Civil War to the Great Depression to the bombing of Pearl Harbor. Americans fear that prosperity long held could vanish, but it is a fear that fails to take into account the fact that America is blessed with vast economic resources and enormous relative security from outside threats.
This is not to say that we do not see potential economic challenges ahead. The global economy faces numerous economic pitfalls. The ongoing trade dispute with China, while at present carefully managed by both sides to mitigate harm, risks spinning out of control if prolonged. And of course, if the United States used military force to pressure Iran into giving up its nuclear program, it would cause oil prices to spike and potentially shatter fragile global confidence.
While the United States may not be able to sustain the same growth rate, it is clear that a corner has been turned -- and where the United States goes, the world is bound to follow.
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