Post by alexsaitta on Jan 15, 2015 17:35:35 GMT -5
There are long-term trends and short-term trends. The long-term trend is the world has been moving away from capitalism and more toward socialism. For this reason, growth at all levels (G8 countries to 3rd world countries) is falling. In the short-run, it seems like the US is in an upswing, while the rest of the world is in a minor downswing.
Most of our leaders can not see the cause and effect which is socialism and government control leads to less growth, so we continue moving further to the left economically.
Read the story on Venezuela and its food shortages and impending economic collapse.
www.cnn.com/videos/world/2015/01/15/pkg-romo-venezuela-food-shortage.cnn
On Tuesday January 13th, the ratings agency Moody’s downgraded Venezuela to Caa3, one step above default. This comes as no surprise – markets have been pricing in the likelihood of default for some time now. But the real issue is Venezuela’s domestic economic problems. Venezuela has been in deep recession for most of the last year. Its budget deficit in October 2014 – before the most recent catastrophic oil price falls – was 17%. Inflation is officially at 65%, unofficially probably far more. Import controls, inflation and the overvalued bolivar are causing shortages of essential goods.
Venezuela is below junk bond status.
Read this article and it shows where socialism leads. Government overspending is the root of their problem.
www.forbes.com/sites/francescoppola/2015/01/13/the-impending-collapse-of-venezuela/2/
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The US has problems too, but the rest of the world is much worse so everyone is flocking here. This article (Most Americans Feel They Are Falling behind) tells the story. They are falling behind and we have been taking about this, even before it started. When you spend more than you bring in, you borrow the difference and interest rates tend to rise. That chokes off growth (income growth/ wage growth), so the central banks just prints lots of money to keep the economy going. Most of this results in higher inflation. For about 6 years now wages/ income has been rising about 2%, and inflation has been about 5%, so each year the average person falls behind 3% on a real purchasing power basis. Times 6 years, and that average person is behind close to 20%.
Like I have been saying, we all need to get used to it/ make adjustments. With huge debt, this is the result -- best case. Worse case it steamrolls like in Venezuela because the entire world sees your problem and you have currency flight, making the inflation even worse. They have 65% inflation there. Government overspending is the root of the problem.
Most of our leaders can not see the cause and effect which is socialism and government control leads to less growth, so we continue moving further to the left economically.
Read the story on Venezuela and its food shortages and impending economic collapse.
www.cnn.com/videos/world/2015/01/15/pkg-romo-venezuela-food-shortage.cnn
On Tuesday January 13th, the ratings agency Moody’s downgraded Venezuela to Caa3, one step above default. This comes as no surprise – markets have been pricing in the likelihood of default for some time now. But the real issue is Venezuela’s domestic economic problems. Venezuela has been in deep recession for most of the last year. Its budget deficit in October 2014 – before the most recent catastrophic oil price falls – was 17%. Inflation is officially at 65%, unofficially probably far more. Import controls, inflation and the overvalued bolivar are causing shortages of essential goods.
Venezuela is below junk bond status.
Read this article and it shows where socialism leads. Government overspending is the root of their problem.
www.forbes.com/sites/francescoppola/2015/01/13/the-impending-collapse-of-venezuela/2/
---------------------------------------------------------------------------
The US has problems too, but the rest of the world is much worse so everyone is flocking here. This article (Most Americans Feel They Are Falling behind) tells the story. They are falling behind and we have been taking about this, even before it started. When you spend more than you bring in, you borrow the difference and interest rates tend to rise. That chokes off growth (income growth/ wage growth), so the central banks just prints lots of money to keep the economy going. Most of this results in higher inflation. For about 6 years now wages/ income has been rising about 2%, and inflation has been about 5%, so each year the average person falls behind 3% on a real purchasing power basis. Times 6 years, and that average person is behind close to 20%.
Like I have been saying, we all need to get used to it/ make adjustments. With huge debt, this is the result -- best case. Worse case it steamrolls like in Venezuela because the entire world sees your problem and you have currency flight, making the inflation even worse. They have 65% inflation there. Government overspending is the root of the problem.
