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IMF: risk of global crash is increasing


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I will go with astreriods for 500$ Bob, Astreriod's come out of the blue and there's nothing you can do about it. And if you nuke it it just goes into a million pieces kills every body faster. So how do you wont to go?

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I think the article might contain some truth.

How else do you guys explain the following:

-highest government deficit in American History

-trade imbalance unfavorable to the USA

-rising East

-negative personal spendings

-inflation without rising minimum wage

I mean, your looking at pretty heavy stuff.

The government deficit/debt as a percentage of GDP was far far higher back in WW2. We pulled through.

Trade imbalances and the "rising East" are closely linked. In the grand scheme of things, trade imbalances are a short term economic issue. As Asia develops, several countries and China in particular will start to let their currencies float on the open market rather than be pegged to the value of the dollar. It will be a slow process, but it will occur. In the mean time, Americans are receiving a hell of a lot of inexpensive goods, basically given to us at a discount by the People's Republic of China (positive thing), and a sizable share of our cash outflows come back to us in the form of Foreign Direct Investment (positive thing). China is adhering strongly to a slow step-by-step policy, so there aren't likely to be economic shocks that reverberate throughout the world in the form of a major global recession.

The rising East is a good thing...unless of course you happen to be a military planner.

Personal Spending was not commented about in the article. Although you are correct that the August figures reflect a drop in personal consumption expenditures, August is usually a weak month. Also, if you look at the table below (not updated for August yet), you'll see that despite some hiccups, we are tending to see spending increasing more than it is declining.


The minimum wage (also not mentioned in the article) is nearly worthless to people as it is because entry-level wages have increased for all but the most incompetent workers. In the HGAC region, the market-rate entry level wage is $7.70/hr according to the Wage Information Network. And you know something? No recession here. Frankly, a minimum wage will NEVER do anything to prevent a recession unless we happen to be on the verge of open class warfare...and I just don't see that happening.

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