Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (878543)	8/7/2015 12:13:17 PM
From: bentway	Read Replies (1) \| Respond to of 1570665

>>Consumers are not irrelevant, but consumption cannot create growth.<< Dave, you're an Apple fan - what's driven THEIR growth? Everything Apple has made money on, they've copied or bought from someone else - no 'innovation' there..

To: i-node who wrote (878543)	8/7/2015 4:15:40 PM
From: combjelly	Read Replies (1) \| Respond to of 1570665

Consumers are not irrelevant, but consumption cannot create growth. Sure it can. Happens all the time. From population growth, if nothing else. Granted, innovation and investment can drive growth also. But investment is limited by demand. All of the investment in the world will not end a deflationary spiral. Nor will innovation. If there isn't consumer demand, neither will drive growth. An excellent example is Japan. They are in their third decade of low growth. Investment funds isn't a problem. Not only are they fanatic savers, the government has kept interest rates very low. And they are certainly innovative. By your theories, their economy should be going gangbusters. But they lack domestic demand. And an aging, declining population. Birth rate has fallen and many of the young are not moving out of their parents home and forming new households. Deflation is under control, but they are stuck in a liquidity trap, just like Keynesian theory predicts. It is the act of producing that causes growth, not consuming. Production is part of the equation. But without demand, production buys you bupkiss. In fact, what it gets you under those circumstances is deflation. Look at the Great Depression. They hit a deflationary spiral early on. There was overproduction, which lead to lower prices, which lead to layoffs and wage cutbacks, which lead to consumers curbing spending and trying to save in case they were next... Around and around. You supply-siders only look at one part of what makes an economy function. More importantly, when those principles are applied, it results in failure. Every time. Which is pretty much what we've been doing for the last 7 years. Now you are spouting nonsense. Are you trying to claim that there is little or no investment activity? Or that innovation has ground to a halt? Or even that our economy is just holding its own? Delusional.