Click to enlarge.
Something tells me that we won't ever make it back to the blue exponential growth trend line.
Click to enlarge.
Note the roughly $3,000 peak in both charts. Coincidence? I can't say for sure but I'm not willing to bet my nest egg that it isn't.
Click to enlarge.
As bad as this chart is, it gets worse. Note the recent resumption of the downtrend.
We've been borrowing a median of $2,105 per person per year (adjusted for inflation) for 6 decades. How many more years did we really think we could keep up the pace?
Captain Blackadder: There was a tiny flaw in the plan.
Lieutenant George: What was that, sir?
Captain Blackadder: It was bollocks.
Source Data:
St. Louis Fed: Personal Dividend Income
St. Louis Fed: CPI
St. Louis Fed: Population
St. Louis Fed: Total Credit Market Debt Owed
St. Louis Fed: Balance on Current Account
The trade deficit is an under-appreciated problem.
ReplyDeleteOn the micro scale we individually benefit from say a $300 xbox 360 purchase or a $500 iPad.
But collectively, we get this massive outflow of US dollars OUT of the paycheck economy into the global economy.
So there's a flow problem -- money leaving the paycheck economy but not coming back (as wages).
Another flow problem is health care. $8000 per capita now, up from $5000 in 2000.
https://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf
1/6th of GDP all of it leaving the paycheck economy but not all coming back as wages.
Troy,
ReplyDeleteThe trade deficit is an under-appreciated problem.
1/6th of GDP all of it leaving the paycheck economy but not all coming back as wages.
I would scream it if I could.
June 3, 2010
Cumulative Trade Deficit Nightmares
Is the cumulative trade deficit like the crazy aunt that nobody is supposed to talk about?
June 1, 2010
Spending Power vs. Trade Deficit
We fell off the "normal" path in 1990 and we don't even seem to realize it yet.
Baldrick: " I have a cunning plan."
ReplyDelete1990 you say?
ReplyDeletehttp://research.stlouisfed.org/fred2/series/EXCHUS
Some day the yuan will be 1.50, much like how the yen appreciated 4X -- 360 to 90 over my lifetime.
Troy,
ReplyDeleteSome day the yuan will be 1.50, much like how the yen appreciated 4X -- 360 to 90 over my lifetime.
I'm not convinced.
nanute,
ReplyDeleteBlackadder was pure genius. :)