Sunday, September 02, 2012

Not Much Happening in the Economic World

After a couple months of not much happening in the economic world, it looks like the economy might be improving.  Or not.  Remembering that the all important numbers for our nation's economy are jobs and manufacturing, these will come out again on Friday (the 7th).

Meanwhile, I ran across a couple of good tidbits on how the global economy works that might be of interest.  Ugg, they are from the NY Times.   Well, even a broken clock is right twice a day.

First, showing the inter-connectivity of our economy with Japan and Europe, the economics blog from nov of 2011 has an article about the Euro-zone crisis. That article contains a link to a neat graphic showing which nations' banks are debtors to whom. Of course, they don't look at anything owed to China, and this seems to be banks that are independent of the US "sovereign" debt.

Something almost everyone seems to be ignoring is the decline in investing in the machinery of our economic engines.  The equipment and software that make our country run. This is a bad thing.  Without this investment, the US will ultimately deteriorate, no matter what any other numbers might pretend.  But, it is a deterioration that might be years from now. Or not, no one knows how long it will take to come home to roost. 

But ultimately, the worst sign of the times, from the economic world, is that the whole world looks at the US Treasury bond as a GOOD and safe investment. So much so that interest rates on the 10 year treasury bond have been under 2% for most of the past couple of years. Since a 4% growth is considered good, and 2% or less growth is considered poor or worse, it is pretty much elementary that the whole world's economy is going nowhere good for several years to come.

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