Posted on 12/02/2007 4:53:00 AM PST by Zakeet
But on careful analysis is it right? BEA statistics show that exported manufactured goods only account for 2.8%. Suppose that doubled to 5%. Will that reverse the slide in real estate values across the country.
The question that is being asked of the economy is whether anything can be done to reverse what many argue is the impact of the bursting of a credit bubble. Unfortunately exports are a tiny fraction of the total value of debt that is argued to be at risk.
For the sake of the current forum I concede that the claim was hyperbolic. That has not stopped many from branding his actual words, particularly given how carefully guarded Greenspan was in everything he said as being irresponsible.
Excellent!
That has not stopped many from branding his actual words, particularly given how carefully guarded Greenspan was in everything he said as being irresponsible.
Stupid people do (and say) stupid things.
Now we get the the cruxt of our entire disagreement. Besides you and the mouse in your pocket can you show where one respected economist has provided an analysis to support this claim.
Furthermore, if this is so, then is the Federal reserve, and its monetary targets which are specifically chosen to regulate money supply, just a sham?
So, when the Fed decides to drop interest rates it is merely a sort of wizard of oz trick. Interest rates were going down and the man behind the screen acts as though it were in response to something he were doing?
If say the Fed chairman were to double reserve requirement tomorrow, would that have any impact on the money supply? If not, then they might as well do it. I suspect, however, some bankers would howl like stuck pigs.
The Fed can influence but not control money supply.
Furthermore, if this is so, then is the Federal reserve, and its monetary targets which are specifically chosen to regulate money supply, just a sham?
If they controlled money supply, inflation would be zero.
So, when the Fed decides to drop interest rates it is merely a sort of wizard of oz trick.
No. When they drop the overnight rate, the overnight rate goes down.
Interest rates were going down and the man behind the screen acts as though it were in response to something he were doing?
I have heard it said that the Fed follows the market rather than leading it.
If say the Fed chairman were to double reserve requirement tomorrow, would that have any impact on the money supply?
It would most definitely have an impact.
No, if they control the money supply, then inflation would be set by the Fed target for inflation. I will admit that based on the The Federal Reserve's own view of its role in managing the money supply. the Federal Reserve sounds awfully confused about what they are trying to do.
I will agree that given the chart of MZM in post 98, the Fed has not controlled the money supply in the sense of keeping its expansion within reasonable bounds, But I argue that this is a result of irresponsibility in establishing and executing policy rather than in the lack of ability of the Fed to control the money supply.
So if we agree that the Fed can control the money supply, but certainly has not been, then we are in approximate agreement.
If they controlled the money supply, they could target inflation at 0%.
But I argue that this is a result of irresponsibility in establishing and executing policy rather than in the lack of ability of the Fed to control the money supply.
If they really controlled the money supply, why would executing policy be an issue? It'd be easy.
So if we agree that the Fed can control the money supply
The Fed has very crude tools that work with a long lag time.
Well I never said that it was.
All I've said is that the folks on here screaming bloody murder that the USA no longer makes anything are outright WRONG by any measure.
With unemployment as low as it is, I hope we don't pull anyone off the Boeing CAD stations to make $2 plastic sanbox toys instead, just so we don't have to import stuff from China.
That's what I don't get on FR. Why are so many people swayed by the propaganda that we must manufacture sprinkler hoses in the USA (and export them to influence other countries as realpatriot suggests) or else we won't have a viable, leading national standard of living?
Well I never said that it was.
All I've said is that the folks on here screaming bloody murder that the USA no longer makes anything are outright WRONG by any measure.
With unemployment as low as it is, I hope we don't pull anyone off the Boeing CAD stations to make $2 plastic sanbox toys instead, just so we don't have to import stuff from China.
That's what I don't get on FR. Why are so many people swayed by the propaganda that we must manufacture sprinkler hoses in the USA (and export them to influence other countries as realpatriot suggests) or else we won't have a viable, leading national standard of living?
They aren't. Their task is difficult to accomplish at times but they aren't at all confused about what they are trying to do.
Where do you get 2.8% figure? The 18% rise in net exports in this last quarter accounted for annualized rate of 1.4% in GDP growth. That would let me to believe that exports are closer to 10% of our economy.
Bureau of Economic Analysis post 87.
Most, if not all, subprime loans carry PMI. How will the lenders go under?
International trade gave a stronger boost to GDP than earlier thought, according to the revised data. U.S. exports rose 18.9% instead of rising 16.2% as earlier reported. Imports increased 4.3%; earlier, the government said imports rose 5.2%. So, trade added 1.37 percentage points to GDP; previously, Commerce said trade contributed 0.93 percentage point to growth.
I don't see how exports going up only 18.9% could add 1.37% to gdp if it only makes up 2.8% of our economy. It would have needed a 50% gain for that.
Actually a lot don’t. Many let them do piggy back second mortgages. I know several people with so-so credit that put between 0-3% down and paid no PMI. A good friend of my wife with decent credit just qualified for a no PMI mortgage with 5% down. Also, I’ve read the PMI companies are struggling as well.
Exports comprised 11.1 percent of U.S. GDP in 2006, the highest ever in dollar terms. It was 5.2 percent 50 years ago and 9.6 in 2002.
With exports on a rate to be up by about 15% from last year, it's probably closer to 12-12.2% of GDP in 2007.
The stock market is still doing well. The price of fuel hasn’t caused a crash in the US economy. The subprime loan drama hasn’t caused the economy to crash. The MSM has daily articles that the sky is falling. They have been pushing failure for over a year. Bush’s drunken sailor spending hasn’t helped the dollar, but I still have confidence in the US economy. I think it is just a game money movers, like George Soros, play to make money. If someone can explain to me why the dollar is going down against the pound I’ll be grateful.
Good!
AMEN!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.