economy0611
TRANSCRIPT
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Economic Update
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Financial Crisis Continues
• US GDP grew $400 billion to $14.5 trillion in 2010– US debt is at about the same number, 100% of GDP
– Deficit spending grew to $1.5 trillion per year
– So the improvement was largely faked by massive influx of borrowed or printed capital
• Stock market back up (money had to go somewhere)– Housing and employment still in the doldrums
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Percent US workforce in manufacturing
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Euro: Danger of Disintegrating?
• Vulnerable to debt defaults by member nations
• Spiking interest rates on weakest member country debt
– Troubled economies can barely service their debt
– Forced austerity programs leading to much unrest
• New debt restructurings, loans and losses are inevitable.
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Germany 119,000,000,000
France 90,000,000,000
Italy 78,700,000,000
Spain 53,500,000,000
Netherlands 25,140,000,000
Belgium 15,000,000,000
Greece 12,300,000,000
Austria 12,240,000,000
Portugal 11,000,000,000
Finland 7,900,000,000
Ireland 7,000,000,000
.. Total 440,000,000,000
EFSF contributions
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Madrid protest, May 20
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Japan Unfolding Debt Disaster
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So, what of China?
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US debt ratchets higher
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Conclusions
• The crisis is still very much with us
• US dollar and economy is in deep trouble– But likely no other currency will replace it in next few years
– May rise is short term but expect much more trouble starting in the fall.
• Eurozone is in trouble principally due to troubles of members it is sworn to support
• Japan, already in major debt is likely to lose its positive balance of trade while rebuilding
• China is severally overextended in money supply and facing its own large housing bubble crisis