Thursday, July 26, 2012

China’s Economy: The Dragon of the East is starting to Sweat

The name China has been the buzz word for Economic growth for about the past 20 years or so, and for good reason. They pretty much burst onto the scene with a socialist revolution and then have been kicking butt with their own brand of pseudo-capitalism ever since. They’ve been growing and growing and growing for years, and for most of that time at double digit rates (10%+). The Chinese economy has over time found its niche on the world stage and has been very (and I mean VERY) good at exploiting its role.

They sat around and said to themselves, “we want money and lots of it, but where is it?” Luckily, at about the same time, the US said, “why we have lots and lots of money, about a quarter of all of the money in the world if you want to get technical”. A match made in heaven if you ask me.

China wanted that money, but the US wasn’t just going to hand it over, at least not yet, they wanted something in return. Well China gave it to us alright; they gave us cheap stuff. Cheaper stuff than we’ve ever seen before, so cheap that we couldn’t get enough of it, and we just wanted more and more.

This went on to the point that we wanted more of their cheap stuff than we could afford, so we started borrowing from them the money that they saved (and boy did they save) from the cheap stuff we bought last year, and the year before that, and so on.

Well now no one has a job (except maybe Jr. Economist, which doesn’t pay very well) so it’s getting a little harder to buy all the cheap stuff. Now who’s going to buy all this cheap stuff that China is making? Not the common man in China, he’s busy saving, and he might actually be worried about losing his factory job where he made cheap stuff.

When things start getting better in the US and Europe, which WILL take some time (years), we in the west will once again be able to buy cheap stuff. But until then The Dragon of the East will have a chance to take a breather from its spectacular growth.

Everyone in China would probably hate it because, well that’s money that doesn’t make it into their country, but it might just be the break that those on this side of the world need to have a chance to get caught up on some bills and hopefully set a little something aside. We’ll see.


Tuesday, July 24, 2012

A House (and Senate) Divided; the Gift That Keeps on Giving

I read an article yesterday that reminded me of what has to be one of the most childish and petty moments in American government history. Now, I hope it was at the top of the list of petty moments, otherwise our government is more of an embarrassment than I previously thought.

About a year or so ago (summer 2011), we were forced to witness what was initially presented as a philosophical debate about the how much debt the government can take on, on behalf of we the people. It quickly deteriorated into one temper tantrum in response to another. If you’ve ever seen a two-year-old rolling around on the floor of a supermarket crying because mommy won’t buy them candy, you have the basis behind Senate and House debates.

But of course, in contrary to the threats of a potential government shutdown, in the eleventh hour the debt ceiling was raised. Which by the way was inevitable, simply because no politician who needs actual votes to keep their job would have wanted to take responsibility for any of what could have happened if the ceiling was not raised.

Well for all the fanfare, the noise, and the international attention that our omnipotent elected officials garnered, we the people, once again, will be taking it up the…, I mean on the nose to the tune of about $1.3 billion in increased borrowing costs last year, and it’s going to be that way for some time to come. We got the gift of constant news headlines and coverage, which I guess was kinda entertaining and kinda annoying for that oh so memorable summer, and we will keep enjoying the fruits for years.


Monday, July 23, 2012

Move Over Baseball, America Has a New Pastime

Good-bye peanuts, so long cracker jacks, I think it’s time we acknowledge our new past-time. Just to be clear, “our” refers to what’s left of/what once was the middle class. We as a segment of society have gotten so good at it, and it has proliferated so much of our everyday lives, that at this point I am fairly certain that it goes completely unnoticed by most, and completely ignored by the rest.

I’m talking about what can only be best described as Faking the Funk.

This isn’t as humorous a topic as I would have liked it be.  Simply because after years and years of borrowing other people’s money to pretend that “we got it like that”, it became impossible for everybody everywhere to pretend that we couldn’t smell the stink that we called an economy.

I’m hopeful now, that because so many people are out of a job, or not working as much as they would like, and nobody seems to have any money anymore that it can finally become socially acceptable for us to cut back and live within our means. The goal is for the equation Frugal = Cool to be the new E = MC2 .

Sunday, July 22, 2012

Most Popular Job in America

Four years ago the economy went into a recession, and just so you know, kinda hasn’t really come out of it yet. But in the time between then and now, everyone [and I mean everyone] has slowly been evolving into a Junior Economist which by now has to be the most popular job in America. 

It’s one thing to have an opinion; we all have one, and indeed are entitled to, but it has gotten to the point that the innate ability of the common man to analyze and interpret economic sentiment is becoming the basis for explaining every type of hardship and misfortune that is befallen.

“Well ya know, we are in a recession”, or “dude ya know how the economy is right now” and a many variation of the response now flows off the tongue with the greatest of ease. Tongues that a couple years ago would not be caught dead wrapped around any those same words.