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Old 05-09-2011, 06:44 AM   #9 (permalink)
Baraka_Guru
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I agree with post #4 as well, but it's useful to look at all the factors because it isn't a simple problem.

The video urville posted a link to is interesting in the issues/facts it raises—though its introduction is painfully verbose. Although I don't agree with it 100% regarding the angle/solutions, etc., it outlines some of the deep-seated problems within the American economy as it relates to expectations.

For a while, I have been of the belief that there is a "correction" coming to the cost of living in the U.S. Despite what many Americans may think—of all classes—they still currently have it pretty good. Your gasoline prices are hitting "record highs" but are still 25% lower than in your oil-rich next door neighbour Canada. Food prices are cheap, mainly due to cheaply produced corn. Chinese imports and other imports from Asian nations (everything from clothes to computers) are cheap, cheap, cheap.

But it's not going to last. Something's gotta give, and it's because of a number of factors. You can blame money printing, deficit spending, bloated military budgets, global inflation due to BRIC economic activity, etc., but to blame any one of these in isolation is naive. These are all going to cause the same problem: it's going to get pretty damn expensive in the U.S., and the fallout will extent beyond American borders. We are all going to be feeling the impact.

The American way of life is not sustainable. It never was, and now it's coming to a point—as Jeff Rubin has been saying: Our world is about to get a whole lot smaller.

Globalization as we know it is going to become unhinged. Unless we get some pretty high-tech solutions and fast (i.e. this will be nearly impossible), how the global economy operates will necessarily go through a massive shift away from open channels everywhere to localized/regional developments.

The U.S. currency problem, the balance of trade problem, the debt problem: these are all symptoms of what's been true all along.

We can't keep doing this.
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