That is a "Pollyanna attitude", in that it assumes productivity will not decrease, GDP continues to expand, interest rates do not rise, and that debt service does not increase. It is a grave mistake to extrapolate the recent past into the indefinite future and plan accordingly. All outcomes must be considered -- the prudent assessment of a "realist", not "defeatist".
Just alone on the simple fact that many industrial methods in the past have relied in the heavy use of commodities, and complete disregard of environmental issues, I see there a tremendous source of economic activity in inventing new methods of a wiser use of natural resources.
In addition, automated methods are invading many, many fields making processes less expensive and more efficient.
For example the world of embedded computers are freeing many resources, both in terms of cost and in human resources, that will further economic activity.
Biogenetics applied to medicine and Agriculture are opening new fields of economic activities and possibilities for more efficiency gains. In addition, humans are living longer, creating yet again new fields of economic activity, and consumers that have the purchasing power to further the success of specific industries.
Parallel to this most of the third world countries continue to grow (in terms of populations), that require millions of consumer products, and at the same time are providing for cheap labor, unskilled and low skilled..... soon they will learn and the result will be more (and higher skilled labor at lower costs).
In addition, and as far as high tech is concerned the USA is the absolute leader in most relevant industries.
Is it going to be straight up, hassle free, and I quote "Pollyanna" scenario ?... no I do not think so, but the immediate evidence points to be far more positive than your "realism" seems to indicate to you.
I agree that fiscal policy and over enthusiasm of our beloved potentates needs to be in continuos check, luckily for us all condemned tax payers, the "Democratic" (!) Congress is now history and may not pass the outrageous welfare circus of the near past, and please be at ease, as I equally distrust the "Republican" Congress, so watch them both. No guarantees here.
Concerning the dollar, no other currency has rise for the $US to fall, not withstanding the introduction of the Euro in 1999. Nor does the dollar have to fall for other currencies to rise. The dollar is doing well for a variety of reasons, not all of which involve the recent, fortuitous performance of this economy.
Well, unless we are planning in speculating in the Pharenghi, Vulcan, or Klingon currencies, I do believe that most currencies (if not all), bear a close relationship with the US dollar, so either they go up or down, but they will be interrelated....
As to the reasons why, I believe we already, cover that, in terms of how investors foreign and domestic view the relative safety and future expectation of the US economy.... The way it looks today, it seems that for the time being it seems that the US Dollar will continue to be viewed as a currency of safety and stability...
IMO, this will bring interest rates down.... to me a mere peasant of the SI Universe, seems to indicate that will bring lower costs to corporations and easier borrowing for the individual. Translating in more of the current scenario.
The possibility of inflation, you seem to agree that it is not very high.....
Only my opinion, and yes I could be wrong...... Even Economists are wrong..... (only most of the time).
However, if you still insist that bad times are immediately ahead of us, then I will oblige, and I will suggest that you should start planning to get say 20 acres, of land, join a militia, (Idaho and Montana seem to be the mecca for such), stock pile lots of food, mainly dry canned items, you know, beef/fish jerky, and start a program of weapon and munitions purchases to protect yourself against those weird wackos of the soup kitchens in the city missions.
Lastly, perhaps joining some kind of religious cult also does the trick.... By the way, if your scenario does play out in this fashion.... please do not shoot a guy with a stripped pajamas in the local soup kitchen, my only weapon will be the soup spoon....(I hope they make clear broth chicken soups, and the like), as I will certainly refuse if they serve that creamy broccoli-cheddar cream soup YAK!!
Just kidding..... |
