The US economy - a query from a novice

dmschanoes dmschanoes at earthlink.net
Mon Nov 3 16:00:11 MST 2003


Just between us novices...

The US Bureau of Economic Analysis which collects the data and produces the
calculations qualified this release by noting that this estimate is in
advance of the usual preliminary estimate (due out 11/25) and subject or
revision.  Hedging is capital's favorite activity...

But sustainable?  Here are the major components of the growth:  personal
consumption expenditures, export increases, import declines, residential
fixed spending.  Personal consumption expenditures are in part financed by a
rapid increase in housing debt as owners refinance at lower rates.

 In addition, the 9.3% increase in real exports is a result of
the weaker dollar and the stronger euro. Likewise a .1% decline in imports.

Residential fixed spending is the product of sustained low interest rates.

Corporate profits showed a significant increase and semiconductor sales have
risen 17% in the 3rd quarter, due in large part to demand from China.

But sustainable?  Should I hedge and say but if...?  Fuck that... NO. My
view China will crack apart-- into near civil war--- no matter what Henry
Liu or the official economists of China assert.

The other components of economic growth are equally fragile.  The kicker is,
seriously, the working class.  Collective actions by workers in the US will
stampede the bulls to the fire exits, which will be locked from the outside.

Not enough productive capacity has been destroyed for capital to herald its
brave new world where the business cycle has once again been defeated,
forever, right before the return of economic contraction.

dms



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