US Could be Heading for Recession

Until there atleast 2 quarters of negative GDP growth no one should be talking about a recession.

As for the debt, the US GDP is 14 trillion per YEAR. People seem to think the US is in the water. It's far from it.

Any slow down in the US would best be absorbed by the US. Other countries would be hurt by it much hard. Everyone around the world has been praying for a US collapse for years, people better be careful what they wish for. Us will be better off than the rest of the world in that scenario.

The depression in the US in the early decade was not only in the US, infact, it was MUCH worse in europe at the time.

The GDP (Gross Domestic Product or good and services produced in the US in one year) has been used to indicate that our economy is healthy, but what many seems to oversee is that it can be manipulated to distort the true of our economy.

Because is not distinction of from where the money comes from.

The GDP have failed to be the indicator in many instances of economy health.

One of the problems is that cannot make a comparison of how the wealth is made, if is because of creating new things or just somebody moving money around already in existence and not from production.

That is unproductive money vs., productive money.

The truth can be deceiving because we all know that our nation is not longer a producer but a spender and that our wealth is now in the hands of foreign countries through outsourcing.

When the GDP was created by Simon Kuznets in 1934 It told the US congress that the GDP had flaws and could not be a good economic indictor, but guess what we are in 2007 and still the GDP is been used to measure economic growth because it was easily manipulated.

Once the GDP could measure the high paying manufacturing job growth but now as we no longer produce its measuring and gambling with produced wealth.

It makes you wonder how in a nation that is so wealthy people are losing their home at a rate of 2 million this year and we have a debt in the trillions while our high pay jobs are outsourced.

Still the GDP said we are doing peachy, is misleading and do not measure the true economic health of our nation.

^^ The problem is with people with little economic understanding actually trying to make a determination of where our economy stands. Not even a fool would consider only GDP numbers as something reflective of what is going on. Thats why the Department of labor releases the CPI and PPI as well. These are are a truer measure of the economys growth. Besides other statistics that are available.

The US has the most open economic structure compared to any other country in the world and the kinds of statistics and data available on the macro and micro economic scale is truly remarkable if one were to compare it to the other countries. The Fed also provides more useful information about the economy. American GDP doesnt not truly reflect American wealth because most American companies own companies in China that do their production. If you take GNP terms, that would give you a better perspective in a global economy. Also om PPP terms we are still number one.

The total collapse of the US economy has been the wet dream of every Socialist hack since the 20th century. This hasnt happened because the US economy is structured to be a free market economy where the only thing that is promised is opportunity.

reply to post by IAF101


Yes if offers opportunities now in the hands of foreign nations capitalizing on our once stable and solid wealth.

Also the corruption and manipulation is something that lies in the hands of the financial elite.

I always said that our nations economy is an illusion the same way that the housing bubble is crashing because of an illusion that made many incredibly wealthy adding to the manipulated health of our nation.

Originally posted by IAF101
^^ The problem is with people with little economic understanding actually trying to make a determination of where our economy stands.

I wouldn't think that the former US Treasury Secretary Larry Summers would fit into that catagory, which is who has issued this warning.

The total collapse of the US economy has been the wet dream of every Socialist hack since the 20th century. This hasnt happened because the US economy is structured to be a free market economy where the only thing that is promised is opportunity.

I love this statement, and it is so true, some people want nothing more than to see this country fall, why?? is the question, a little study on how things were during the great depression would change a few minds i'm sure.

Well the latest in the markets, it seems that the housing bubble crash is indeed spilling on the retail, many major retail stores are complaining.

And also some of the automobile big names.

Well let see what the fed is going to do.

The US economy is totally based on the Yankee Trader philosophy and has been since they broke the connection between money and gold. For the economy to flourish, they have to be able to get more than value for an item. That is to say, 3 or 4 times the production cost.
The foreign markets work on a much more market driven system than the US, and therefore can produce at a lower cost to the consumer. US buyers pick up these items and then add to the price to bring it up to the standard that they are used to selling for. This makes them rich, and supports the economy of the foreign market while actually hurting the US economy.
The US government has been supporting the economy artificially for many years, and has found that a good war is excellent for the economy. Proof is in the economic reports during and after the wars fought during the 20th century. But these wars are having a lesser effect due to the amount of artificial money in the system and the lack of solid industrial base jobs.
As well, the US labour market has priced itself out of range for the industries that should be supporting the economy. Without the ability to use US labour and still make the Yankee Trader type profit, many companies are outsourcing their labour to the foreign markets.
In a properly balanced system, when the industry fails, the economy fails. But the US is doing the opposite. The economy is failing, while the industry still posts profits. And as the economy fails, the service based job market dries up, and the service industry starts to fail. If you look around, how many of your neighbours are working to run stores, restaurants, bars, gas stations, garages etc. and how many are producing a needed product.
The amount of jobs that are basically paperwork in the US is incredible. How many of your neighbours go to work in an office every day. When a business starts to lose profits, the first ones to be laid off are the office staff, because they are the ones that produce the least profit for a company. They need the production staff, but the assistant payroll clerk is a luxury. Especially since the system is on computer.
In my opinion, the US is in rough economic shape and has been for quite a few years. They have just been propping up the dollar and bullying the other countries into letting them. The time is coming soon that the other countries are going to wake up and realize that the US isn't the all powerful OZ that it says it is and some day they are going to look behind the curtain. On that day you had better have your own personal survival plan, because the corporations aren't going to come to your rescue. Their owners will be to busy on the golf course in Jamaica.

I would like to mention a couple of things because I have been sort of keeping up with this whole mess.
For it 2 be an official recession they are using the formulas, GDP(gross domestic product) down for two straight quarters, we are already in a housing recession, once that is equaled on the consumer spending side, I think that would sort of put the official seal on the deal and we can call it one.

Someone mentioned credit and subprime, yes that is one of the problems but it is my understanding this was about to happen anyhow and the market could not sustain itself, and I read that the whole concept of the way a bank extends credit was really put into full effect because of the depression, most people had no money to pay for anything immediatly after the depression so it became business practice to extend credit to consumers for both large and small purchases.

One BIG problem that no one really is talking about is the personal savings rate, people are not saving any of their income, or really making enough to have any real savings, yet for the market outlook to remain positive, consumers spending their money is a plus not holding on to it, in a way it looks like they do not want you to save, because if you saved you really would't need credit would you??? you would have the money to buy what you need outright and wouldn't have to make loans and have a credit card.

As far as the mortgage lending problems are concerned, if the banks would have kept the 15% - 20% downpayment rules in effect in order get a mortgage, for the most part no one would have been able to buy a house because they have NO savings....this entire thing is more complex as it has played out, yet so simple to have avoided, they became greedy and wanted to get as many mortgages as they could and turn them into securities and make money exponentially off of the consumers making the interest only payments where they essentially rented money.

And then this month all of these things started to ramp as far as the problems coming to a head, the Fed said everything was pretty much ok at the meeting before they cut the Fed Funds Rate for Banks earlier in the month, then about 2 weeks later they found themselves making that cut, injecting or pumping money into the banking system almost every day for about 2 weeks straight in order to keep them afloat and try and keep the market from all out crashing, and then on top of that the 4 largest banks ask for 500million each, some analysts say these are very bad signs of the shape the banks are in, this did not all come from subprime, I am not convinced of it, yet is is a part of the whole problem and the people are not hearing the real story or getting the full impact of this yet.