Comments on: Ten Unsolved Problems in the Global Economy

By: stojan nenadovic

stojan nenadovic — Mon, 17 Aug 2009 09:36:25 +0000

Non-credit money is the way for solving both national and world economic crisis. Non-credit money is not debt than gift. Non-credit money is the necessary additional quantity of money in circulation (dM) as percentage (k) of existing quantity of money in circulation (M). dM = kM ;
k = (supply – demand)/demand ;
If non-credit money is emitted according to the cited formula, inflation cannot exist. Also, taxes are annulled for the amount of non-credit money. The consumers pay less and producers get more than today, in the order of credit money. All get the gift of non-credit money. The source of non-credit money is the growth of economic rationality. There is both national and world non-credit money. We must create both national and world order of non-credit money. China’s bad loans are non-credit money in fact.

By: Shelly

Shelly — Mon, 17 Aug 2009 04:10:00 +0000

-We still have an unemployment problem that with all the government spending has not created any jobs.
-That will be a problem for a long time. We are in a deflation mode for a while. Then we will have inflation.
-This I believe we will be in theis quandry for a long time. There are no easy fixes.

By: Harper Capital

Harper Capital — Sun, 16 Aug 2009 18:50:14 +0000

3 points.
1-I also follow ECRI and feel we are indeed climbing a wall of worry. While aware of the L Term problems, few are expecting upside surprises, esp in the USA.

2-One other ‘worst’ would be if Europe (which by many metrics is in far worse shape than us, and they are ‘old’) blows up, and we benefit from capital flows and stable, rising $. So no reform here and we _really_ hit a wall in 3-5 years. (Ron Paul 2012?)

3-Food. World grain stocks are at post WWII lows. There is a pending (cheap) sugar shortage and the ‘bio fuel’ nonsense continues. Noone is talking about this, increasing the impact when it hits.
Thanks David, good food for thought here. HCP

By: Kevin

Kevin — Sun, 16 Aug 2009 18:37:13 +0000

If ObamaCare passes, the political momentum might allow President Obama to pass a Cap and Trade bill.

I’m not in love with ObamaCare, but I know if Cap and Trade gets passed the US economy is going to head deeper into recession at a rapid rate.

Even the potential for a Cap and Trade system seems worth of mentioning as a disaster for the global economy.

By: Andy

Andy — Sun, 16 Aug 2009 07:06:27 +0000

The larger wealth disparities get, the stronger the social and political rebound in the social fabric will be.

By: Gepay

Gepay — Sun, 16 Aug 2009 05:07:08 +0000

this is not a global economic problem but the US military-industrial- (and another layer on top) the intelligence complex is out of control. 8 years and counting in Afghanistan, what are the reasons the US is there? There are still 50,000? 75,000? troops in Iraq. The US is in a depression and it is still funding the military like WW2 or the Cold War is still going on. This is why the Bush stimulus had and now the Obama stimulus is having a piddling effect. The US ecomony (still the biggest engine of the global economy)was already artificially stimulated.
Israel and a large part of the US establishment still make large noises about bombing Iran. What would the ramifications of that do to the global economy? The US is the biggest warmonger on the planet right now. War creates havoc in the global economy.

By: Myself

Myself — Sun, 16 Aug 2009 02:23:51 +0000

Titles starting with ” The ten (worst, best, unsolved, richest, rules)”, the oldest in history being The ten comandments

By: Josh Stern

Josh Stern — Sun, 16 Aug 2009 01:36:36 +0000

ECRI is very good. A couple of things to keep in mind though related to their models is that the time frame of their leading indicator is 9 months, and changes in stock prices are one of things that go into the indicator – so, e.g. stock prices rallying from March-June is one factor supporting a prediction of coincident economic activity being strong the following Dec-Feb. But that doesn’t tell you per se what the stock market will do in the following Dec-Feb.

By: Kyle

Kyle — Sat, 15 Aug 2009 23:24:26 +0000

And yet ECRI says the strongest economic recovery since 1983 is about to begin — should be quite apparent to all by next year. (of course that just means stronger than the last 2 weak recoveries — say 3-4% growth). I have followed their work in Realmoney and in the media for several years. No offense to David who has made some good calls, but I doubt anyone writing on this blog/comments can come close to matching their track record.

maybe their model is finally wrong. or maybe our bias is showing — how many of us who saw all the issues thought it would get as bad as it did? how many of us are now trained to look for all the issues that could cause a masssive decline again? doesn’t all the talk about the VIX jumping in the fall (70k SEP calls for VIX 47.5?) remind anyone else about october 1988 when everyone was on watch for another crash?

When have we not had serious problems? are you sure this isn’t the wall of worry we are climbing?

No doubt this recovery will end badly just like the last one did — hello, we are handing a hungover drunk a bottle! but keep in mind that the last juicing by the Fed lasted 4-6 years (4.5 year bull market, 6 years GDP growth). This won’t last as long but its barely gotten started — predicting disaster way too early doesn’t make money.

Ok, rant is over.

By: Josh Stern

Josh Stern — Sat, 15 Aug 2009 21:20:27 +0000

Some good comments posted above that I would second.

Not mentioned anywhere is phenomena that I see as the single largest problem in the U.S.: overall societal decision-making is declining in quality and the S/N ratio in public discourse has a negative trend. These declines are due to a lot of different factors including a) devaluation of knowledge, learning, and rational approaches to decisions and values, b) structurally broken “two party” political system where most political actions are viewed as moves in a zero-sum game between two opponents, c) domination of infotainment news sources, d) widespread distrust of thy neighbor in increasingly multi-ethnic, multi-cultural society, and e) reactions to increased pace of creative destruction style capitalism and its effects on cultural traditions, communities, and the balance between supply and demand for labor of all types.