Econoping
So who is?
Cuba, Iran, perhaps Venezuela?
Gibberish. Shiff is using polls and “feelings” of people and not economic data. No matter what he believes about our economy as a whole, it’s still better than most, if not all, other countries.
I don’t know about the WEF global ranks, but our own government’s reporting about domestic inflation rates are a joke...of course they may have to lie because of those inflation-indexed bonds...What a web they wove.
Not to say I necessarily take numbers in government reports at face value, but this rebuttal is lame. On one side we've got a claim, presumably put forth by some economist working for the government (not "the government"), that inflation was 0.8%. Is that correct? I have no idea. I do know, however, that saying "my guess is" and then pulling a number out of the clear blue sky, is not a counterargument.
Further, part of the gains result from tourists using their appreciated foreign currencies to buy products cheaper here than they can in the own countries.
Which....what...."doesn't count"?
Corporate earnings, particularly those of multi-nationals, are padded as their foreign currency denominated earnings translate into more dollars when those earnings are repatriated.
That's right, I suppose. If you owed a company in yen rather than dollars you are sad, and the company is happy, because they have earned more. So what? I suppose this is another thing I am supposed to think "doesn't count"?
However, such gains are illusions, as companies merely earn more dollars of diminished value for the goods they sell.
No, the gains (from being paid in an appreciating foreign currency) are real. The sale of goods domestically, in dollars, is a separate issue. But let us note that this guy hasn't made the argument he's trying to here, either. True, maybe the company is getting more dollars for the goods they sell, but those dollars are worth so much less that overall the company has lost out.
But that's not the only possibility. Maybe while the dollar is down the company is selling more at a pace that outweighs that. Or maybe the two effects actually balance. Again, an actual argument is required to settle the issue, not merely waving one's hands and saying "my guess is 10%".
The actual volume of exports does not necessarily improve much, as evidenced by weak industrial production and manufacturing employment.
What does "actual volume of exports" have to do with anything in the first place? Thought we were talking about GDP, not, er, GDV.
When those additional debased dollars are paid out as dividends, they confer no real increase in global purchasing power to shareholders.
Again, an argument is needed for this. Maybe dividends go up at the same time in a way that balances or outweighs the inflation. Anyway, there's more to GDP than dividends so I'm not sure what he's trying to prove exactly.
To arrive at this conclusion, the forum has obliterated the obvious under a mountain of theory.
Yes, another instance where some stupidhead insisted on using formulas and data ("a mountain of theory") instead of just saying "my guess is" because that's "the obvious".
[...]Completely ignored however are the measurable results of competitiveness, notably a trade surplus and a strong currency. [...] Based on the empirical evidence of a gargantuan trade deficit, staggering global indebtedness, and a declining currency, the United States is clearly not the most competitive economy in the world.
I'll give him half a point here, only because I don't know what the heck "competitive" is supposed to mean in the context of an "economy". Maybe the U.S. is, or is not, the "most competitive economy" - I don't know, and I don't care.
But the real question is who is this guy, and why are his arguments so weak?
“Further, part of the gains result from tourists using their appreciated foreign currencies to buy products cheaper here than they can in the own countries. I have heard about Canadians checking into U.S. hotels with empty suitcases, crossing the border to indulge in weekend shopping sprees.”
How dare them! How HORRIBLE! How could they do this?
My inflation ravaged 401K is killing me. 30% growth year to date just sucks. If I don’t start getting 50% return, I’m going to tell those pollsters that the economy is going to hell.
The libs are in denial. If you live in Michigan, NY, or Ohio, then yes, things look pretty bleak and you can’t believe the numbers. But the rest of us are doing pretty well. Even here in Florida, where we’re reminded daily that we have the second worst foreclosure problem in the nation (behind CA), the economy is doing OK. It’s just certain sectors, where people made bad choices, that are hurting.
You can make our economy appear to be doing whatever you wish if you are trained in statistical finesse.
I don’t thinkI’m as pessimistic as the author, but he is absolutely right in at least one sense.
Measuring inflation in nominal dollars is meaningless when our currency is being flushed down the bowl by our central bank and our profligate spending. We need to raise interest rates by about 1.25 points, and instead we lowered them today. If there has ever been a time for tight monetary policy, it’s now, and instead we’re literally printing money. I could not be more pissed off at the people who are supposedly ‘’managing’’ our economy.
Inflation is low because housing prices are coming down (read: deflation) and U.S. exports are up 1/3.
Oil is up, that’s true, but oil is a smaller part of our GDP than is housing.
When Schiff can back up his words with mathematics; I’ll listen.
However, as long as all that he presents are his “feelings”, then he’s just another Economic AlGore. He’ll have a fanclub, I sure, ... (they all do)... heck, he maybe even win an award or two; but that’s about it. [shrug]
Bring numbers or stay home, Schiff.
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There was a Chemistry professor in a large college that had some foreign exchange students in the class.
One day while the class was in the lab the professor noticed one of the exchange students kept rubbing his back and stretching as if his back hurt.
The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his countrys government and install a new communist government.
In the midst of his story he looked at the professor and asked a strange question. He asked, Do you know how to catch wild pigs?
The professor thought it was a joke and asked for the punch line. The young man said this was no joke. You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come everyday to eat the free corn.
When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence.
They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side.
When the pigs, who are used to (and by now dependent on) the free corn start to come through the gate to eat, you slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.
The young man then told the professor that is exactly what he sees happening to America. The federal government keeps pushing us toward Communism/Socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. while we continually lose our freedoms - just a little at a time.
One should always remember There is no such thing as a free Lunch!
Looked at ammo prices lately?
It means no one has tomorrows Wall St Journal today.
Can’t Peter just pretend he’s as stupid as the govt. thinks he is?
All of them are true...until they aren't. ;)
RECESSION? HELL NO, WE'RE IN A DEPRESSION Reader Shawn Mercer points to a post yesterday by Peter Schiff, a former sparring partner on CNBC's "Kudlow & Co." (hmmmm... wonder why the producer never pairs me with Peter anymore?). Shawn says, "I think our buddy Peter Schiff's head is going to explode trying to rationalize away the GDP report yesterday." Indeed. Yesterday's report showing blazing growth in the third quarter, despite a credit crisis and a housing downturn, has got to make the bears wonder what planet they've been living on. Here's Schiff's reaction. I have to say, I think in principle he makes a valid point, noting that inflation is surely underestimated in the numbers (if it were more realistically portrayed at higher levels, that would make the reported growth numbers somewhat lower). But Schiff just can't resist taking it way too far -- and being way too pompous about it.
...the government had to assume that inflation during the quarter ran at an annualized rate of .8% (thats less than 1%). That is the lowest rate of inflation used to calculate U.S. GDP since the Eisenhower administration.First, thanks for explaining to all the stupid people out there (perhaps he knows his audience well) that .8% is lower than 1%. But let's get our facts straight before we presume to teach the dummies what's what. It's simply not true to say it's the lowest rate since the Eisenhower administration. Let's look at the data. Lower rates occurred in the second quarters of 1962, 1997 and 1998. Data? Schiff woulud rather go with guesses. He says, "My guess is that inflation is actually running at an annualized rate closer to 10%." Such a rate applied to the GDP calculations would show the economy to be not just in a recession, but a depression. Which pretty much lines up with Schiff's prejudices, and explains his "guess."I agree with Schiff that there is an inflation problem. And we both support Ron Paul for president. But can't he get his facts straight, and can't he tone down his end-of-the-world rhetoric a little?
Posted by Donald L. Luskin at 9:50 AM | link
I’m baffled at the econoBOTS here that are poo pooing this article....
Makes perfect sense to me