Friday, October 30, 2009

We can trade pork for everything we need

The US GDP was up sharply last quarter. Consumer spending which used to make up almost 70% of the economy continues to decline and there was no growth in personal income. New home sales were down sharply in September. What is wrong with that equation? Any measure of the real economy is down but the GDP is up 3.5 %. The missing variable is financial services, trillions of Dollars created out of thin air sloshing back and forth across the economy.

This phony economic activity is pumping up the GDP but produces nothing and in fact when one of these tsunami waves hits your segment of the economy you can be washed away. The price of oil is up again and sucking money out of the real economy to fill the money bin at Goldman Sachs. But hey, it makes the GDP look better (the music is playing, everybody get up and dance now).

The number of unemployed continues to increase, the jobs continue to leave the country and the trade deficit continues to grow. China continues to dump Dollars anywhere in the world that they can to build up their commodity reserves. At some point the people getting those Dollars will want to spend them and nobody will take them. Then dance music will stop.

China has lifted the ban on US pork, one of the few things we have to sell. Of course China is modernizing its agriculture as well as sponsoring projects in South America and Africa to dramatically increase their ability to produce food. They can grow food for China far cheaper than we can. At some point we won’t be able to make the minimum payment on our Bank of China credit card and we’ll be cut off. Anything that you use that says on it "made in China", if you can’t do with out it, you should buy it ahead of time and store with your canned goods. (pssst, just between you and me, that "made in China" stuff is just about everything)


macnow said...

I had a friend who worked in the cmos and ccd industry. One of his chips sits up in the Hubble telescope.
After coming back from one of his trips to check out chip production etc. over in China and Singpore he was unuaslly sullen. I was visiting him in New York, we were argueing about many things, then he hit me up with this; "China is and will destroy what is left of or minascule middle class." I said what are you talking about. He said they have hundreds and hundreds of millions of warm bodies to throw at their labor problem. They can burn thru 500,000,000 (thats million) lives with no problem. And that is not even half their population. These chineese worker drones work themselves literally to death. And this can and will go on for decades. They will work for no pay but meager barracks style housing and food three times a day. And these people feel lucky.

How can Americans compete with that, serious, do you even comprehend what you are up against.

It's not even about pay anymore, its about barack style housing and food just to live.

Needless to say, we went out and got blindingly wasted.