United States Heading towards a Depression?

A few weeks ago someone in this forum said the only index that I pay attention to is the "How much do I have to pay for shit index". Whether or not it's a technical recession is pretty academic. Inflation in commodities is a reality and that effects everyone.
I'm not an economics expert but I don't see how the economy can come back strongly while commodities stay so high, our life's blood is oil. And to get oil down something needs to be done to strengthen confidence in the dollar. Well thanks to the big banking dickweeds we're probably not going to be raising interest rates any time soon because of the mess they got us into so that's one way to not help the dollar. It seems like we're in a tough spot but I haven't reserved my place on one of the trains to the happy camp yet.

 

The news I see isn't so good. This is an election so the proof will be in the pudding for 2009.

New orders for durable goods fell half a percent in April, the third decline in four months.

The Standard & Poor's/Case-Shiller National Home Price Index fell a record 14.1% in the first quarter from a year earlier, S&P reported on May 27.

Consumer spending rose at a slim 1 percent annual rate, the smallest gain since the second quarter of 2001, and home building plummeted at a 25.5 percent pace, the biggest drop since 1981 and the ninth consecutive quarterly decline.

Michael S. Hanson, senior U.S. economist at Lehman Brothers expects the U.S. economy to grow at a slow 1.2% in 2008 and an even weaker 0.6% in 2009 as the headwinds from oil, housing, and the credit crunch continue.

GM Sheds 19,000 Jobs and Ford is slashing 3,000 white collar jobs

http://online.wsj.com/article/SB121208121850329795.html?mod=yahoo_hs&ru=yahoo

 

Ah, I see. Another non-reader. Let me help you and your friend lorien.

Shadow Stats - Gross Domestic Product

The GDP is a large component of the National Income and Product Accounts (NIPA), representing "the output of goods and services produced by labor and property in the United States."[3] The NIPA was the concept and development of the National Bureau of Economic Research, a private organization founded in 1920. The NBER work evolved into the BEA and the current NIPA accounting.

The NBER remains a consultant to the process and retains the position as official arbiter of U.S. recessions. At one time, the NBER did define a recession as two consecutive quarters of negative GNP/GDP growth that were not distorted by an event such as a truckers' strike.[4] The NBER used trends in indicators such as industrial production and payroll employment to time a recession's beginning and end, to the month. More recently, though, the NBER has abandoned the GDP as a recession indicator and has relied instead on those other economic series. My presumption is this change resulted from an unofficial recognition of the declining value of the GDP reports. In theory, the NBER is apolitical, although the timing of some of its recent calls on the ends of recession are suspect. Specifically, there is no such thing as a jobless recovery. If jobs are being lost, the economy still is in recession.​

Ah yes. The "I call BS on your facts" response. Please see above. It is quite clear that you and lorien are in fact are not only BSing, you might be able to get certified as 100%, Grade A USDA pure BS.

I want you guys to be smarter about this stuff. Because, 1) you're not pushing my knowledge level, 2) it will be fun to see you defend all of your preconceived positions after having full knowledge of the truth, and 3) if/when things go sideways, I don't plan on supporting either of you with welfare.

Yes, another person gets it. Good for you!

Next step, fractional reserve banking. Knowing about how that works, will sour your milk pretty quick.

 

Consumer confidence fell to a 28-year low in May as inflation expectations soared. May's reading was the lowest since 58.7 in June 1980.

http://news.yahoo.com/s/nm/20080530/bs_nm/usa_economy_sentiment_dc;_ylt=At1KSZ_tJsHUKfdlTngRD6yyBhIF

 

I was digging this up for a friend, not sure if I have posted it before, but the Mises institute maintains a good "economic snapshot" page here

http://mises.org/markets.asp

This was a great article the other day, by one of my favorite Mises authors, Robert Murphy.


The Government's Statistical Whopper of the Year
http://mises.org/story/2994

It's about how they fudge the reports from the economic numbers, specifically in this case gas or oil prices.

 

Tell Guerilla the sky is blue, he will say, "BS".

Tell Guerilla that DP stands for Digital Point he will say, "BS".

Tell Guerilla he is a handsome bloak, he will say, "BS".

It's all BS to this guy.

 

Mia, Lorien, the topic of GDP has been discussed to death. The fact is, GDP can be manipulated, very easily.

GDP has very much to do with money supply. A larger money supply, by default, means a larger GDP. Whenever the economy nears a recession (deflation) the Federal Reserve kicks up the printing presses and makes more money. You see, adding 25% to the money supply would add 25% to the GDP. Its all nominal.

But even real GDP isn't real. When they say that GDP is corrected for inflation, that is inflation in prices not inflation in the money supply. When the government prints too much, prices do not rise overnight to correct for it. Instead they rise over time, the inflation from the economic stimulus package and the fed's new window for bank loans won't be seen by the end of 2008. Rather it may take a few years for prices to adjust for the growing money supply. Even if we kept the money supply level for the next 20 years, prices would still rise because the market takes time to correct for inflation.

Now as I pointed earlier in this thread, much of our economic vitality is from inflation. In 1970, the money supply was about $500 Billion. In 2004, it was $4.5 Trillion. From 1970 to 2004 the growth in GDP was 1039%, while the growth in the money supply was 800%. Its easy to see how easily these numbers correlate, larger money supply= larger GDP.

 

I know, its all "BS"

To hell with Macro economics, to hell with basic economic theory, to hell with the definition.....

To hell with reality.. It's all BS..

 

Care to read the rest of the post and reply?

 

No, because it's been well established in this thread already that anything I say, Lorien says, or anyone with an ounce of reason, experience and education asserts is, "BS".

 

We're talking. You're not talking to Guerilla, I'd be more than happy to have a reasonable, rational debate on the subject.

 

Well, you guys both claim that it's two Quarters of consecutive negative GDP growth.

I have debunked that.

So yes, your facts are BS. I haven't seen any economic reason, education or experience from your or lorien. I'm sure you guys are successful in business, but you're not very learned when it comes to technical discussions, and you show zero desire to learn anything.

Ouch bro.

 

Not a slap at you, merely an invitation to debate someone else. I'd really like to have an honest discussion on the matter without the personal attacks. There is much to be learned here.

 

Good luck with that.

 

1Q GDP is up close to 1% growth not great but at the same time far from a depression

 

Mexcio and Canada are heading for recession.

The Mexican economy shrank 1.5 percent in March from the year-ago period

http://www.reuters.com/article/economicNews/idUSN2919931720080529

Canada's economy contracted 0.3 percent during the first quarter.

 

What does this mean? Amero?

 

Canada and Mexico are the top US trading partners. If Canada and Mexico are in a recession, it will be hard for the US to avoid one as well.

Here's the trade statistics For the month of March 2008
http://www.census.gov/foreign-trade/top/dst/current/balance.html

The values given are for Imports and Exports added together.
These Countries represent 63.72% of U.S. Imports, and 60.56% of U.S. Exports in goods.

Year To Date
Total in Total in
Billions Billions
Country Name of U.S. $ of U.S. $

Canada 52.15 147.69
Mexico 29.41 88.24
China 28.79 90.71
Japan 18.70 53.82
Federal Republic of Germany 13.76 37.43
United Kingdom 9.30 28.09
Korea, South 7.17 20.40
France 6.35 17.67
Taiwan 5.64 16.05
Netherlands 5.10 14.87

 

It's hard to deny that the US is not in a recession. Remittances to Mexico form Mexcian workers in the US have been in decline for some months. Canada's unemployment rate is 6.1% and the US has lost jobs during the last five months.