Comments on: But I’m SUPPOSED to be RICH!

By: Freako

Freako — Tue, 26 Dec 2006 23:24:00 +0000

"How much of that 75% 'services' represent financial services?"More specifically, a quick Google says over 8% of GDP, which means over 10% of services.

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By: mk-kids

mk-kids — Tue, 26 Dec 2006 22:04:00 +0000

OT - aaronbest said:"Muir/Anon/whatever the hell you call yourself today, you are a tool. You've already been told that you are just a negative person with nothing worth while to add to any discussion."I disagree. Muir/Anon keeps Rob's bull blog interesting these days. You should probably work on getting a little thicker skin and some humility.

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By: rentah

rentah — Tue, 26 Dec 2006 21:35:00 +0000

Thanks freako

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By: Freako

Freako — Tue, 26 Dec 2006 11:58:00 +0000

"That seems to me to be the 'emperor with no clothes' sector, one that could rapidly shrink if folks in other countries stop turning to large US firms to fund/broker deals, set up trading desks, etc, etc."Industries grow and collapse all the time. Undoubtedly, the redeployment of resources will lead to slowing GDP growth. That is probably one reason why productivity generally falls during recessions (the last one excepted).The U.S. economy is very competitive domestically, which is probably one reason why they generally lead the way in terms of productivity growth. Unlike, say, France which has oodles of protectionist red tape DOMESTICALLY. The U.S. have way less restrictive labour laws which means that the economy adjusts much faster and is much more efficient.Where the U.S. lacks competitiveness is in the large oligopolies such as the military industrial complex and elephants such as the big automakers. In R&D and technology, they are very innovative and diligent, no doubt driven by the huge incentives offered by stock options.The biggest problem I see with the U.S. economy is excess debt and consumption care of the housing bubble and easy credit. I think that a collapse WILL cause major friction and pain. But I don't think the productivity growth and innovation will be gone for long.

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By: rentah

rentah — Tue, 26 Dec 2006 08:13:00 +0000

And, most important, of course, the US financial sector would shrink if foreigners decreased their investments in the US.

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By: rentah

rentah — Tue, 26 Dec 2006 08:10:00 +0000

freako: How much of that 75% 'services' represent financial services?That seems to me to be the 'emperor with no clothes' sector, one that could rapidly shrink if folks in other countries stop turning to large US firms to fund/broker deals, set up trading desks, etc, etc. It seems at least partly dependent on belief in the US, something that could change quickly with one or two large financial incidents.

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By: Freako

Freako — Tue, 26 Dec 2006 06:19:00 +0000

FYI, here is the U.S. GDP break downLAgriculture: 1.6%Industry: 23.12%Services: 75.27%

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By: Freako

Freako — Tue, 26 Dec 2006 06:16:00 +0000

"I didn't say anything about the relative size of the US and Chinese economies. I said that the US is important to the world as a consumer, not a producer"I don't know if I can reconcile that with your earlier statement: "The US economy is even smaller than you think. It's just a house of cards based on borrowing."The U.S. is the LARGEST producer in the world. It produce more than the Japan and Europe combined. That is not a relative statement, it is an absolute fact.Your post gives the impression that the U.S. economy is not real. I don't understand where you are coming from. High consumption does not negate high production. In any case, GDP calculations INCLUDE the current account deficit.IMHO, Americans ARE overconsuming, and the current account deficit is not sustainable. Such an event WILL (as you imply) be felt by the world economy."There really isn't anything that the US currently exports (and that includes Microsoft software and Boeings) that the rest of the world couldn't do without pretty easily."I think the term production applies to a little more than the consumer goods you see around you. For example, it is pretty hard not to watch an American made movie or TV show.Anyhow, the U.S. economoy is about a lot more than consumption. U.S. productivity growth has driven the world economy for a long time, and will no doubt continue to be important.

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By: Anonymous

Anonymous — Tue, 26 Dec 2006 05:33:00 +0000

I didn't say anything about the relative size of the US and Chinese economies. I said that the US is important to the world as a consumer, not a producer.Which is why the rest of the world keeps loaning money to the US while any other country in its current account situation would get the IMF on its case.Which can't go on forever, which is going to have consequences for the Chinese, and us.There really isn't anything that the US currently exports (and that includes Microsoft software and Boeings) that the rest of the world couldn't do without pretty easily.

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By: Freako

Freako — Mon, 25 Dec 2006 22:24:00 +0000

It's the US consumer that's important to the world economies that actually produce things, and he's reaching his credit limit.So do you think the fact the U.S. GDP per capita is 10 times that of China is just manipulation of statistics?

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