• Welcome to AppraisersForum.com, the premier online community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Global Economy Bursting?

Status
Not open for further replies.
We have discussed numerous times on this thread how the values of California people are so much out of kilter with the mainstream in this country. It seems as if they are getting farther and farther away from reality especially after the last election.
Last night I was channel flipping and came up on a documentary program on either PBS or History Channel about the United States. Each episode features 4 states in 15 minute segments. The first state covered was California. This documentary must have been made over 5 years ago because they gave the spill about the skyrocketing population growth and the nature of the people moving out there. One guy stated that the typical person entering California seemed to be an outcast from other areas but were accepted into the multicultural life style of California where they preach and are tolerant of any life style. They said the reason San Francisco was the gay capital of the country was that during WWII San Francisco was the place gay soldiers were sent to be discharged and they settled their into their own communities. San Francisco is the home of the hippie movement.
Then they gave some interesting statistics. One of 4 people in CA is foreign born. They have about 33% of Hispanic in the country, 70% of all Asians, 16% of the Indians and a large percentage of African-American. They pride themselves as the multicultural capital of the world. They are also the 8th largest economy power in the world with the most resources and highest level of technology concentration in the country if not the World as well as being the wealthiest.
Connect the dots. What they didn’t say was that California is morally and economically bankrupt. Think about it. Wonder if the FED can print some morality?
 
Last edited:
Doing a little thinking this morning on why was it necessary for the FED to implement QE 2.

The investment markets are fear driven. There is a misallocation of risk based upon fear. Investors prefer risk free investments today judging the relative values of the stock and bond markets. For example, the yields on European sovereign debt reflects a risk that investors may have to suffer a loss due to the inability of a country to service its debt whereas the U.S. Treasury debt is lower in yield because the view of the relative safety of the U.S. This is the same notion as "too big to fail" that permeated the banking sector, which proved correct in that the government bailed out the too big to fail banks. Who will bail out the U.S.?

The symptom that is occurring right now is a lack of GDP growth and job formation. The FED looks at where the money is going; over 25% of domestic investor's dollars are going to buy U.S Treasury debt. This shows up as a lack of capital to corporations or the "crowding out" affect of massive government borrowing. This a paradox as corporate balance sheets pile up cash. So, attacking the crowding out affect, the FED launches QE 2.

The real problem is the slack in capacity, meaning we have too much capacity and not enough demand. Therefore there is no need to add more capacity no matter how much money is available, no matter how cheap that money is. The added drain to the GDP is the demand is still being supplied more so by imports and not by domestic suppliers. Couple that with our exports not growing fast enough to offset imports and the GDP slows down as well as job growth. Today's job report numbers were a disaster; 50,000 private sector jobs created in November with the unemployment rate rising to 9.8% from 9.6%.

Looking at where the jobs are, they are mainly in the service sector. These are not high paying jobs.

As the government has taken on more spending and with revenues falling, the deficit is expanding. Our trade deficit is growing. Oil prices are rising and we import a rising percent of our oil, projected to be 70% by the end of 2012.

One way to shift demand is to weaken the dollar, which QE 2 will do providing our trading partners do not do the same. But they are; they print their money, exchange it for dollars and buy our U.S. Treasury paper. That neutralizes QE 2 and investments don't flow to our companies. Instead, our companies are at a disadvantage for operating cost. So they export jobs to cheaper countries.

The game will be over in another year or two if policies continue or become worse. Who will bail out the U.S.?
 
UNEMPLOYMENT UP TO 9.8%

Speaking of insantiy-read this article and ask yourself how the economy can add 150,000 jobs in October and 39,000 in November and the unemployment rate goes from 9.6 to 9.8. and the recession ended over a year ago.
 
Brown calls summit on Calif. budget mess

http://www.upi.com/Top_News/US/2010...mmit-on-Calif-budget-mess/UPI-24021291390796/



"We have fewer options to deal with the revenue shortfall."

"We believe there is a huge disconnect between perception and reality."

"Green jobs are the future."

"We're not proposing solutions yet."


Brown may find it's not easy being green

http://www.latimes.com/news/local/la-me-brown-jobs-20101202,0,2842087.story

Brown's solution? Aggressive expansion of California's green-energy industry.
 
I remember reading a book titled: "The Last Days of Hitler." Hitler stated that the reason his Nazi Regime failed was because the German People were unworthy and their lack of worthyness was to blame. Just a little more time and resolve and they would have been home free but the people were unworthy.
You just wait until California goes down the tubes. Jerry Brown's mantra will be: "We failed because the people of California were unworty and unwilling to fund his green energy program. Just 60 billion more dollars spread out over 10 years and they would have been home free. There was nothing wrong with the Progressive Ideals, it is the sorry-worthless people of California that caused the problem. Caught in their own multicultural spider web. We weren't born here so why should we care.
 
imports_domestic_petro_shares_demand-large.gif


Consumption_production_import_trends-large.gif


EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $83 per barrel this winter (October 1 to March 31), a $5.50-per-barrel increase over last winter and $3 per barrel more than in last month's Outlook. Projected WTI prices rise gradually to $87 per barrel by the fourth quarter of 2011 as U.S. and global economic conditions improve. EIA's forecast assumes U.S. gross domestic product (GDP) grows by 2.6 percent in 2010 and 2.2 percent in 2011, while world real GDP weighted by oil consumption grows by 3.9 percent and 3.3 percent, respectively.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com
Back
Top