Click to enlarge.
Shocking! Other than a few fringe bloggers with little to no formal economics training, who could have possibly seen this exponential trend failure coming? Just look at it. It's as smooth as a baby's bottom!
So what if 100% means we'd be shipping every penny of every paycheck overseas (with nothing left to eat or pay taxes)? As seen in the chart, that wasn't supposed to happen until 2017. This is only 2012!
Forehead. Desk. Whack. Whack. Whack.
See Also:
Savvy Chinese Know Exactly When Bubble Will Burst!
Savvy Chinese Find Market Top!
Trend Line Disclaimer
Source Data:
St. Louis Fed: Custom Chart
Prior to the wheels coming off the Chinese had bought ~$500B of agency debt, so it's unclear how high that black line can in fact go should they try to do more "vendor financing".
ReplyDeletehttp://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt says they've been on something of a buyers strike wrt treasuries, but that's a pretty vague data point.
Speaking of wages, the ~$2.5T of UST we owe China & Japan is 50 million man-years of labor at our rates.
Back in the day, "Langston" (DEC) Empire had a labor class called 'slaves' as part of the model. That was deemed overly insensitive, so they changed the classification to UWs, uncompensated workers.
ReplyDeleteMuch better.
I didn't notice this at all on your trend line graph due to the scale - but on the FRED graph it's pretty easy to read an Elliott wave pattern, with the corrective phase from 2005 to '09.
ReplyDeleteIt'll be interesting to see how that develops over the next decade or so.
JzB
Troy,
ReplyDelete50 million man-years of labor doesn't seem all that bad as long as you keep this quote in mind.
Don't put off for tomorrow what you can put off until the day after tomorrow.
Hahaha! Sigh.
Jazzbumpa,
ReplyDeleteIn order to fit 2017 in there the scale did have to turn a bit unreasonable. I'll give you that. ;)
Hey, there is some good news.
ReplyDeleteRoughly 43% of the outgoing containers at the Port of Los Angeles are empty.
So how is this good news? Think how efficient the modern digital age is. In the old days we'd probably have to fill those containers with wasteful IOU notes, lol. Sigh.
Falling commodity prices:
ReplyDeletehttp://arstechnica.com/science/news/2012/04/asteroid-takeout---a-one-billionaire-mission-to-bring-a-500-ton-asteroid-to-high-earth-orbit-by-2025.ars
CP,
ReplyDeleteThat's awesome!
It might even drive the price of virtual asteroids down, lol.
We used to export goods, now we export jobs!
ReplyDeleteIf one accounts for the jobs we've shipped over-seas, our exports are still strong!
It seems we just can't lose. Amazing, no?
found this:
ReplyDeletehttp://blog.heritage.org/2010/01/12/growing-trade-deficit-good-news-for-u-s-economy/
in my internet travels today.
mab,
ReplyDeleteNext up...
Export People! ;)
Troy,
ReplyDeleteFrom your link:
Since the 1970s, America’s economic performance, including job growth, has been better in years where the trade deficit has grown than in years where the deficit shrank.
Since the 1970s, America's economic performance, including job growth, has been better in years where this has grown than in years where it shrank.
I guess we should just do more of that, lol. Sigh.
Forehead. Desk. Whack. Whack. Whack.
Troy,
ReplyDeleteThe attention and concern paid by many to the trade deficit reflects a fundamental misunderstanding of the U.S. economy.
Indeed. We should ignore the warning Warren Buffett offered in 2004. He clearly had no idea how the economy worked.
A perpetuation of this transfer will lead to major trouble.
...
Perhaps there are other solutions that make more sense than mine. However, wishful thinking -- and its usual companion, thumb sucking -- is not among them.
Troy,
ReplyDeleteI just can't get over your link.
Things *will* be better *now* if we borrow from the future. I don't think anyone would deny that.
Of course, that makes the future suck. Pardon my language.
So how do we stop the future from sucking? Well, we could either not borrow from it in the first place *or* we can borrow exponentially increasing amounts from it and never stop! You know, like some sort of never ending ponzi scheme!
History shows the latter does have its risks though, lol.