US Economy : Ouch
I’ve been saying for awhile that the US economy can’t run on fumes forever. Fumes, in the literal sense of oil (in case you didn’t notice, we burn a hell of a lot of the stuff) and fumes in the figurative sense of black-magic economics in which deficits are good, loans are cheap, and long-term planning is all but ignored.
The wheels just might be starting to come off the bus. Here are a few graphs to get you interested:
Here’s the stock market in 2007. Not bad, right? It’s had some ups and downs, but over the year it’s up about 10%. Everything is great.
Unless you consider the falling value of the U.S. dollar. You see, the rest of the world is a bit more conservative in their economic policies, and they prefer fundamentals over fanfare when valuing a currency. Even our 10% stock market gain looks pretty sorry if you’re taking holiday in Europe.
And then there’s oil : with the price of oil teasing $100/bbl and oil markets talking about a move away from the $USD as its default currency, we’re going to have to get real smart real quick about alternatives to our oil-intensive lifestyle.
It seems to have come to a head in the past week, with the stock market taking a sharp dive and giving up most of its gains in the past month. Could it be that economists and traders alike have looked through the smoke and realized that we’re running on fumes?
What’s your plan?
Filed under economics : Comments (3) : Nov 7th, 2007 by tadfad
November 7th, 2007 at 11:54 pm
My plan is lots of student loans!
November 8th, 2007 at 12:12 am
I like to put straight-up cash into little mason jars, and then bury the jars in multiple secret locations in my backyard. Never trust the banks.
November 11th, 2007 at 12:56 am
Don’t put cash in the backyard. Stick with burying things like Snickers. The chemically treated chocolate and nugget don’t depreciate like the dollar, and you will be king when we have to start over with the barter system.