The American Economy's Future: From people who know

No disrespect, Mr. President, but your lavish praise for how "strong" our economy is will prove to be either misdirected or just another misinformed, incompetent statement.

Read an excellent article from The Economist. Danger time for America: the economy that Alan Greenspan is about to hand over is in a much less healthy state than is popularly assumed


The chart at left represents the change of the exchange rate for the stated conversion from the beginning of Bush's presidency until today. It shows a 21.1% drop in the value of the dollar compared to the Euro for that time period.

We have had a 20.1% drop in the value of the dollar compared to the Swiss franc for that time period.

We have had a 14.9% drop in the value of the dollar compared to the British pound for that time period.

China is planning on moving considerable sums away from the US dollar, and Foreign Direct Investment (FDI) in the US has fallen off remarkably since 2000. [see chart below]


None of this even considers the recent bond yield curve inversion (when long-term rates are below short-term rates) that has investors spooked. When the return on 10-year Treasury notes slid lower than that of a two-year note in the past, it often was a precursor to a recession and a signal of an economic cycle peak. Basically, what this says is that people don't have faith in the long-term operations of bond issuers, usually federal, state and local governments.

Greenspan and his fellows are now saying that this might not hold true because bonds may have lost their predictive power. How, you ask, could they have lost their power?? Ask Alan. Only he knows.

Need I even mention that we have record trade and current account [NOTE: Federal Reserve Bank of New York President Timothy Geithner said TODAY that "It would be hard for anyone looking at the size of the US current account deficit to not be worried."] deficits, and an embarassing national debt.

All while fighting an absolutely unnecessary conflict that will most likely cost your children more than the recently speculated $2 trillion. [Read the Stiglitz/Bilmes study: The Economic Costs of the Iraq War]

God bless Amerika.