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Reading the economic tea leaves

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cdhmanning
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re: Reading the economic tea leaves
cdhmanning   7/11/2012 3:13:19 AM
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The problem with watching how people react about the economy is that people act on perceived change - not what is really happening. I am sure many of those Americans who have resumed high consumption cannot afford it but have decided that if they're going bankrupt then they might as well rack up a bit more debt while they can. Generally, US consumers are fueled by debt. If you lend to them, they will spend be that on housing or consumer goods. Underneath is the US economy really improving or is the debt hole just being dug deeper so that the charade can continue for a few more months? For other countries that supply to the US economy, this is some extra profit that can made. Wiser countries are, however, seeing this as a short-term windfall. The US economy is indeed huge. As a huge vessel sinks other close vessels get caught in the whirlpools. Most countries outside the US see what is happening and know that the US debt madness cannot continue forever. Many countries that were wed to US performance are now diversifying and hedging their bets. They want new markets established before the US can no longer raise more cash.

sudo
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re: Reading the economic tea leaves
sudo   7/2/2012 12:34:20 AM
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One of the worrying signs is the huge US debt. Sure, some economists may argue that it doesn't really matter as long as the country can service the debt. Still, I know that it would not happy times for me if I maxed out on my credit cards, even if I'd be able to make the minimum repayments.

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