From Sub-Prime to the Ridiculous

by Jomackee
(Poblacion, Quezon, Bukidnon, Philippines)

The US – from the sub-prime to the ridiculous, or the odd decoupling?

According to some economic commentators – such as Morgan Stanley Asia’s Stephen Roach – the US is forever blowing bubbles. Roach is concerned that the US consumer is asset-dependent that current consumer spending levels are unsustainable and that they’ll have be a post-bubble adjustment in consumer spending just as there was in investment during the dot-com recession.

The US economy has also come under scrutiny not just because of fiscal and current account imbalances – the so-called ‘twin deficits’ – although other commentators believe that, notwithstanding the housing sector, the real fundamentals of the US economy are reasonably sound.

Furthermore, they argue that the strength elsewhere in the global economy will minimize any major adverse impact globally of a bearish US. Whilst some commentators believe that Asia has effectively ‘de-coupled’ from the US, partly because if the strength of intra-Asian trade, Roach believes that the American consumer’s dependence on Chinese exports means that Asia will not be immune if the US faces a sharp downturn.

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Jun 22, 2009
Sub-Prime to the Ridiculous
by: Tony

The United States market controls the rest of the world. There is no "de-taching" from the U.S. It just cannot be done.

Europe, Russia, China, etc., are all tanking because of their significant investments in the U.S.

India is perhaps the only strong economy today because they have few foreign investments. They frown on investing outside of their country.

Now, with the U.S. and the rest of the world crashing down, India is rising fast as one of the best world economies.

Anything can happen though. And hopefully multiple positive actions will occur to prevent the international downfall that is looming.

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