Markets Are Shaken by New Signs of Global Economic Trouble

Here’s the problem with that: Even if China and ever other economy in the world were suddenly to shake of the shackles of a totalitarian government, there is still no way China and all the rest could acquire $36,000 of goods per capita per year. There isn’t that much of resources to go around. If most of the people in the world are slaving away producing goods for our consumption, we should get down on our hands and knees and thank them. It is only through their poverty that we can enjoy $36,000 of consumption per person. If we had to rely on our own means of production, given our high standard of living, there is no way a TV made in the US would ever cost $200. If we truly want to put an end to the slave labor in China, we should all agree to cut back on our consumption and lower our standard of living a little, because there is no way we could keep it as high as it is without China’s totalitarian government helping us do it by keeping their people poor. If the Chinese people were to shake of their totalitarian government and rise to a standard of living like ours, their goods would also rise in price, comparable to what US manufacturers could do, and so we would all have to pay US top dollar for cellphones, etc. Maybe we could continue to consume $36,000 per person, but those $36,000 would not buy as much as it used to.

You and I fundamentally disagree, then. I do not believe the world economy is a zero sum game. Nor do I believe there’s any evidence for that point of view.

It’s not a zero sum game, but it is not infinitely expandable either, at least not quickly. There is no way to justify the entitlement of 4% if the world’s population to 25% of the world’s resources, and then on top of that, to complain about it! If all the world consumed at the rate we consume, that would require a six-fold increase in the world’s resources. The world was given to us by God to share, not to horde.

Why do you think the world can’t support prosperity for greatly more people, if not all? Japan has essentially no resources. Nor does Singapore. Yet, they are quite prosperous. South AFrica is quite blessed with resources, yet most of its people live in poverty.

It’s not a matter of what’s in the ground. It’s how people approach economics and government.

The U.S. consumes 25% or so of the world’s resources because it produces 25% or so of the world’s goods and services. It takes resources to produce. There’s nothing sinister in any of that.

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I don’t think is quite true, or else there would not be a trade deficit. We import more than we export. That is hardly the sign of a producing nation. We consume because we are rich and we can. Our riches came partly from the way our government and society are structured, but mostly from our good fortune, which we did nothing to deserve. After World War II when the rest of the developed world was in shambles, the US was relatively untouched. This put us in an excellent position to jump ahead and become the world economic leader. Now the rest of the world is catching up and we don’t like it, so we make up narratives on how we and now the victims!

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A $500 billion trade deficit does not loom all that large in a 19 trillion dollar economy. And even then, it wouldn’t be that big a problem but for the budget deficits.

All money has to return to its country of origin in some way, or it becomes worthless. It can return in the form of investment, purchase of goods or services, or purchase of debt. But for our budget deficits, we wouldn’t be worrying greatly about the trade deficit except to the extent that the money might return in the form of buying up all our defense industries or Manhattan or something of that nature.

Unfortunately, our deficits give foreign governments the option of buying our debt, so much of our peoples’ income goes to foreign wealth without taxpayers receiving anything for it.

Your narrative is swiss cheese - full of holes

Persistent trade deficits are relatively recent for the US, only for 3 decades. Yes it’s now a problem but it wasn’t for most of our history.

If your logic of blaming WW2 had a solid footing in reality, then Japan, Germany, Korea etc would not be where they are. The WW2 effect dissipated in the last century, probably by the mid 70’s

Bill Mahar expressed this desire for a recession for the reason you mention.Who would be most hurt the lower and middle class.Just shows how diningenuous these elitists are. Sure the care for the little guy…:roll_eyes:

O[quote=“Ridgerunner, post:46, topic:562199”]
Unfortunately, our deficits give foreign governments the option of buying our debt, so much of our peoples’ income goes to foreign wealth without taxpayers receiving anything for it.
[/quote]

Those holding our debt theoretically should be richer in this environment but that doesn’t mean they won’t squander it either. China’s investment in other countries is a risk they take; hopefully it’s not done at our expense. But if they prosper, so should we. And that means our farmers and ranchers.

Human beings are funny. They’ll vote for someone who promises to reduce the debt and deficit but then praise that person for expanding the economy by raising the deficit and the heck with the debt.

Hilarious !:face_with_raised_eyebrow:

I don’t think this follows. They could prosper while we’re impoverished. Our farmers are not harmed by China’s actions. Ranchers are a bit because meat is not as fungible as grain is. Grain is like oil. Once it’s on board a ship, its source is lost. China could stop buying, e.g., soybeans altogether and affect American farmers and Brazilian farmers and others. But China isn’t going to do that, which means it’s still buying American soybeans that have lost their identity.

Meat is somewhat different because it can be more distinctive in appearance. Poultry is particularly that way.

DOW up again today. Just thought I would remind us, given the nature of the topic.

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But that’s the thing. Oil and grain are not homogeneous, worldwide prices notwithstanding. One can tell where certain wines and beer come from. Same with crude oil. We want to produce that grain which will stand out, not just feed the world.

It’s about where it was a year ago.

Global capital inflows are coming here and as long as they do, they will keep the markets propped up. Capital goes where it is treated best. Right now, that is in the US as it has been for several years now and that trend isn’t stopping yet. The socialists can stamp their feet and scream about it all they want, it’s still going to happen.

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Keep watching.

It’s on my front page, Dow, 10-yr yields, GLD, GE, VIX, etc. :slight_smile:

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