Ian: GDP growth depends on many factors including Level of Public Expenditures,Money Supply,Saving rate,National debt,Employment levels,
Global Competition and Global ability to absorb excess production.In a fully developed, full employment Economy, GDP growth without inflationary pressure or debt is not feasible. Japan is a near perfect example of that.
If savings rate and Employment levels are already low, increase GDP growth by Internal consumption can only be generated by increased Public expenditures, rising wages and increased Consumer Debt. All that was tried in the 80's. That costly experiment led to massiveInflationary pressures and Interest rates of near 20% to curb the Money supply.
When that experiment failed, the idea of a Global Market place was introduced as a means of using the excess Capital to promote global trade. We are now in the throes of that experiment. I do not intend to quote Economic theories to prove any thing or promote any particular school. Instead, I try to listen carefully to the markets of the world and understand their implied messages. Markets are factual and real.
Historically except for the last 5 yrs, the average return on Equity in the Stock Market has been 9%. These are facts not fiction. In times of low GDP growth, the return has been lower. We are in a period of global deflation and the U.S stock market with NN included has deflated.
Personal jibes do little to promote a useful exchange of ideas. I realize NN is low but I will try not to stoop even lower in trying to make a rebuttal to any personal references. |
