This article discusses the observations of an amateur economist and highlights some of the indicators he uses to divine the state of the economy. An experiment at the goldismoney.info forum helps make his point.

Thanks for reading!

This is a bit like the one about the guy who jumped out of the 50th floor window and as he passes the 25th floor yells out:

OK SO FAR!

IMO a snapshot of the current state of affairs is not a particularly good indicator of what is to come.

My crystal ball sees:

A USD trapped between zero interest rates to keep the economy ticking along and non-zero interest rates to prevent foreigners fleeing the USD. Either way it's a disaster waiting to happen.

A derivatives market that is potentially unstable. I don't see the profits necessary to feed this bloated elephant.

An overpriced stock market.

If I was an American I would be doubly concerned. Not only is the dollar fragile but the US economy is uncompetetive and has few first class products which it can export to balance its books.

Despite Slick Barak and *his* media telling you the recesion is over - I think 2010 will not be a happy year for many.

Agreed on virtually all of the above.

But wouldn't you agree that a series of "snapshots" can help one identify a trend?

Carl wrote:
Agreed on virtually all of the above.

But wouldn't you agree that a series of "snapshots" can help one identify a trend?



That makes sense to me.

Anyway, the point of the article seems to be that we can look around our own surroundings and get some indication of the state of the economy.

And denial is not a river in Egypt!

I agree with smiley.

Andrewo, surely you don't mean to suggest that one must be fluent in "Greenspeak" to understand that the economy is going down the gurgler?

What I'm NOT is a chartist. I think this is little more than numerology.

What I take notice of are the drivers of the economy and the logic behind these. Consider:

The US has an enormous BoP problem

The citizens have a whopping personal debt problem

The govt is unable to fund 'entitlements' now and it's getting worse heading in the future

Most of the states are heading toward insolvency if not already there

The US has a 2:1 disadvantage in energy efficiency when compared to Europe (yes! The US consume twice what Europe does per capita and per unit of GDP)

It has lost control of immigration, if it ever really did have control.

Worst of all, it's eductional standads have been dropping for 20 years. The pinnacles of academia in the US are more often than not occupied by foreigners or recent immigrants.


So....

Based on these facts

Can the stock market justify recent climbs with earnings?

Can the US create competetive products which the rest of the world wants which will allow it to export it's way out of this situation?

Can the US maintain the value of the dollar?

Go figure!