Tim Coldwell (guest post)
5 December 2009A sorry story. Not much hope?
Sent to you by Tim via Google Reader:
via The Economic Populist – Speak Your Mind 2 Cents at a Time by Robert Oak on 12/4/09
It’s Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy! Since hearing how putting in some insulation or yet more teachers (read voters) and pickin’ up trash is magically going to generate 10.9 million jobs (the number needed to get back to pre-recession employment levels), I thought this talk by the Alliance for American Manufacturing on how to rebuild the U.S. economy was in order. They have an excellent plan for infrastructure projects which would generate GDP, add to the national economy, over the long term, in addition to providing Americans with high skills jobs. …
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12 Responses to “Tim Coldwell (guest post)”
December 6th, 2009 at 5:50 pm
Jesse’s Cafe American | No, It Is Not Entirely Different This Time – But It is More Insidious
There are some differences and they are significant.
The US is not on a gold standard, so the devaluation of the dollar does not have to occur in a stepwise function with an official restatement of value. This time the Fed can simply monetize debt and provide more dollars as it wills. That is fiat.
The US is not a net exporter to the world. This is why Smoot-Hawley was harmful to the US recovery. It is the consumer for the world’s exporting nations. And it also owns the reserve currency.
The New Deal was a bottom up Jobs Program. The Deal this time is a new version of trickle down. The second wave down in the Great Depression caught many of the professionals who had made millions shorting the initial market declines, or at least survived the Great Crash by selling early. The next wave down in the current credit collapse is going to boil the middle class, a few degrees at a time. http://bit.ly/6fwCQt (chart, GIF)
http://bit.ly/8hSF1P
Tim here: I think we’ll see a gradual drift over the next 12 months or so to a US$ worth ~30% less than today, say $2 to a Euro ( /- 10%).
Are inward investment (incentive) programs handled at a national or city / state level in the US?
December 7th, 2009 at 5:56 am
A little Good News: U.S. Furniture Factory Working Overtime To Meet Booming Demand | http://bit.ly/7BxYlQ
December 7th, 2009 at 9:06 am
Some less good news re manufacturing data: http://www.zerohedge.com/article/nothing-it-seems-factory-orders-and-unemployment
December 7th, 2009 at 1:20 pm
Winners and Losers as the Dollar Falls
Since 2002, the dollar has lost about a third of its value compared with other currencies. That doesn’t sound good — and it’s not, if you’re a Japanese exporter or an American tourist. But it is potentially great news for American workers.
But… read more http://www.nytimes.com/interactive/2009/12/06/business/metrics.html
December 7th, 2009 at 3:46 pm
Background reading
Requiem For The Dollar
James Grant | Wall Street Journal | 5 December 2009
“Gold is appreciating in terms of paper currencies—or, alternatively, paper currencies are depreciating in terms of gold—because the world is losing faith in modern central banking”
http://bit.ly/6faWqy
December 7th, 2009 at 6:52 pm
Is this really typical of an energy related startup today?
Guest Opinion: Wall Street Puts Money into China…
Posted by SCapozzola on December 7th, 2009
As ManufactureThis has previously reported, Noel Davis is looking to build a wind turbine components plant in Indiana.
Noel explains that, in addition to waiting for a loan guarantee from the Department of Energy, he must then get funding from investors. The irony is that, at a time when credit is tight, many investors are putting scarce resources into Chinese projects, not American.
http://www.manufacturethis.org/?p=6705
December 8th, 2009 at 10:31 am
More food for thought.
Thriving and Failing in the New Global Economy
JUAN ENRIQUEZ
Managing Director, Excel Venture Management
Venture capitalist Juan Enriquez analyzes the divergent fates of China and Latin America and what lessons they hold for the rest of the world.
http://bigthink.com/juanenriquez/thriving-and-failing-in-the-new-global-economy
December 8th, 2009 at 12:23 pm
UniqueVisitor
Entrepreneurship exists in the tiny space between madness & genius & its journey requires a few cross border violations to reach the final destination.
http://www.uniquevisitor.net/
December 9th, 2009 at 2:42 am
The PIMCO punt on the US Dollar
Reorienting the U.S. economy to a more balanced state based less on debt and consumption and more on production and saving will take much more time. Acknowledging the need for more currency weakness is an important step along the way. Fortunately, it looks like U.S. policymakers, although not yet willing to officially abandon the “Strong Dollar Policy,” are at least operating differently than in the past. They have awoken to the inevitability as well as the possible benefits of a continued fall in the dollar. A gradually weakening dollar may help heal the U.S. economy, stimulate U.S. job creation and help reverse the build-up of global imbalances that are at the root of today’s economic crisis. Investors should expect and position for further U.S. dollar weakness ahead.
http://www.pimco.com/LeftNav/Viewpoints/2009/Viewpoints Scott Mather December 2009 Fear Not the Falling Dollar.htm#
December 9th, 2009 at 2:27 pm
Proof some VCs are human after all?
Inspired by Entrepreneurs
by pk
Here is my friends at venture firm First Round’s holiday video – it’s so darn good. And if you’re not inspired by so many entrepreneurs out solving interesting problems, then … well, you’re beyond help.
First Round Capital 2009 Holiday Card from First Round Capital on Vimeo. http://bit.ly/631SXX
December 16th, 2009 at 10:40 am
*The US is not on a gold standard…*
But a gold standard would make no difference to the value of the dollar as long as the great bulk of the money supply – 97% – is “credit money” created by banks under fractional reserve banking.
Almost all comment on the economy is based on a great fallacy, the tacit assumption that the underlying fractional reserve money system is sustainable in the long run.
This leads to the virtually universal conclusion that “liar loans” caused the crash. The fault lies either with the liars taking the loans, or the unscrupulous bankers granting them, or the government, either for failing to regulate such loans, or for forcing banks to make them.
But what if the crash would have happened anyway – in fact, sooner – if borrowers and lenders were all dead honest, and regulation was done properly?
If so, what could have caused the crash?
A few observers think a credit crunch just like we are experiencing is the inevitable end result of fractional reserve banking.
Why? Because banks create money when they lend it – but only the principal, whereas they are owed back principal plus interest – more money than exists.
Solution? Create yet more money by issuing more debt.
Fractional reserve banking thus requires ever increasing debt.
But debt cannot rise to infinity – nothing can – so when an upper limit is reached, the system seizes up in a credit crunch.
So say Ellen Brown and Stephen Zarlenga. Look them up.
Instead of simply stopping lending when creditable borrowers could no longer be found, the banks began granting loans to non-creditable borrowers – “liar loans” – thus staving off the crash for a few years.
So liar loans not only did not cause the crash, they actually deferred it for a while. .
The only way the economy can be put right is by clawing back the power to create money from the banks to the government where it belongs. And by decreasing the current level of debt, most likely by substantial inflation.
Tom Hagan
December 22nd, 2009 at 6:36 am
Tom, A pertinent post (as usual) from Simon Johnson on Baseline Scenario today:
http://baselinescenario.com/2009/12/22/bernankes-reply-on-the-doom-loop/