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Thread: ( Rest of the World ) Decoupling ( from the US Economy )

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    Banned Melonie's Avatar
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    Default ( Rest of the World ) Decoupling ( from the US Economy )

    (snip)"While the US economy continues to weaken (see my recent commentary: Don't Doubt the Double-Dip), many foreign economies continue to experience solid -- even spectacular -- economic growth. When the global economic crisis began in 2008, many forecasters doubted that the world economy could return to growth without the US consumer. But the world is learning what Peter Schiff has long predicted: that the US consumer is a drag on the world economy, not an engine for growth. As "decoupling" becomes more apparent, emerging economies are forming trade links among themselves, accelerating the process of decline for the United States.

    To get a better understanding of how decoupling works, it helps to picture a train in motion. Together, the cars and engine travel together on the track. Now imagine that last car, the caboose, detaches from the rest of the train. At first, the caboose travels at nearly the same speed as the rest of the train. The distance between the two is hardly discernable. Over time, however, the car slows down as friction and gravity take their toll. Meanwhile, the engine powers ahead. The distance between the caboose and the train gradually becomes greater and greater, until finally the engine is gone from sight, leaving the caboose sitting idle on the track.

    This process describes how many of the world's economies are steadily pulling away from the United States. As trade links grow between countries far from our shores (such as those being solidified between Asia and South America), the distance between the United States and the rest of the world is becoming larger, and decoupling is becoming more and more pronounced.

    While the US economy sputtered to a 1.6% growth rate in the 2nd quarter (Q2), many Asian countries rapidly pulled away, powered by trade with each other and the rest of the world. In Q2, China's economy grew a startling 10.3%. Americans would be thrilled with growth half that rate. Asia's second rising star, India, expanded by a solid 8.8%. The Four Tigers also posted excellent numbers: Hong Kong grew at a 6.5% clip, South Korea at a faster 7.1%, and Taiwan at 12.53% -- while Singapore clocked an astonishing 18.8% growth rate! If that's not decoupling, I don't know what is.

    These numbers are not likely to be a short-term phenomenon. Instead, I feel they represent a dramatic realignment in the pattern of global economic activity. Economies that have long enjoyed a trade surplus are now less likely to loan money to broke and bloated deficit economies such as the United States. They are now more inclined to consume their own production or trade with other exporting nations. Indeed, China is now the largest trading partner for several of the world's major economies, including Japan, South Korea, India, Hong Kong, Taiwan, Australia, Russia, and Brazil. Slowed by the gravity of excess debt and the friction of increasing taxes and regulation, the American caboose is straining to keep up.

    But the trend is not limited to Asia. All around the world, countries with sound economic policies are continuing to expand. In fact, despite the attention paid to the so-called PIIGS, several European economies are also showing signs of decoupling. Germany, Europe's economic powerhouse, grew at 2.2% in Q2 - its fastest rate in over 20 years! Switzerland expanded by 3.4% in the 2nd quarter, while Sweden and Finland grew by 4.6% and 3.7% respectively. Even historically tumultuous Poland boasted a 3.5% growth rate. Predictably, this growth has whetted Europe's appetite for imports, causing the EU to recently surpass the US as China's largest export market.

    The trend also extends to producers of the single most important commodity in the world: oil. According to the Department of Energy, the US imports over 60% of its oil consumption; however, new production is increasingly being diverted to international markets, leaving our country vulnerable to 1970s-style shortages.

    In the 1st quarter of this year, Saudi Arabia exported more oil to China than it did to the US. With a new growth market for its petroleum, Saudi Arabia is estimated to grow 3.9% this year. Russia grew at a rate of 5.2% in Q2, largely for the same reason. China is now believed to be Iran's largest trading partner, according to some sources. And although the United States remains Venezuela's largest trading partner, China's nearly insatiable demand for oil has catapulted it into 2nd place for trade with this oil-exporting nation.

    Whether you are looking at ASEAN, OPEC, or the EU, it is clear that decoupling is the order of the day. The world economy is rebuilding itself with China as its engine and hub. This is the essence of decoupling, and until recently, it was thought by many respected figures to be impossible.

    In the old days, it was said that when the United States sneezed, the rest of the world caught a cold. This time, they might just excuse themselves and move to the next car."(snip)

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    Featured Member flickad's Avatar
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    Yeah, things have been heading that way for a few years now. It's the primary reason we got to avoid recession.

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    Banned Melonie's Avatar
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    ^^^ indeed ! The 'gold foil hat' crowd would probably tell you that Australia is well on its way to becoming a raw materials based economic 'colony' of China ! But in terms of this thread's topic, the real 'piece de resistance' will be delivered when the transactions for Australian raw materials sales to China are settled directly in Aus dollars to Chinese yuan ( thereby bypassing the US dollar and Wall St. banks as intermediary, thus denying them a 'cut' ).

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    Featured Member flickad's Avatar
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    Quote Originally Posted by Melonie View Post
    ^^^ indeed ! The 'gold foil hat' crowd would probably tell you that Australia is well on its way to becoming a raw materials based economic 'colony' of China ! But in terms of this thread's topic, the real 'piece de resistance' will be delivered when the transactions for Australian raw materials sales to China are settled directly in Aus dollars to Chinese yuan ( thereby bypassing the US dollar and Wall St. banks as intermediary, thus denying them a 'cut' ).
    That may be an exaggeration, but it probably isn't much of one.

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    Veteran Member loren's Avatar
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    Melonie - I am glad that you bought up this topic. I have been trying to learn more about the reasons for the economy in the US. I watched a couple of videos about it.

    http://www.youtube.com/watch?v=_doYllBk5No

    http://www.youtube.com/watch?v=E9Ksez51_mY

    The one that really bothered me the most was the one about the hedge fund scam.
    http://www.youtube.com/watch?v=ZUJOdH7wUSY
    After watching the other videos it made me realize just how severe the corruption is here in the US. ‎From 3-11---3-21 2008 and 6-27---7-15 2008 the crooks exposed in this video series did a huge call put hedge fund scam. They totally ROBBED 2 companies - Goldman Sachs Bear Stern and Lehman Brothers - of EVERYTHING, by way of fraud. 3 months later, in September 2008 the American people were forced to reward the crooks who totally robbed both companies of EVERYTHING by way of fraud aka -the biggest call put hedge fund scams in history?! When crooks commit theft by way of fraud aren't we supposed to put them in jail?
    What is really insane is that because we have a fractional banking system that is supposed to be on a 10:1 system; the money they got was at least 10 times more than they were really worth. These guys are criminal masterminds.
    I wish I could declare bankruptcy and then get paid 10 times the amount that I declared bankruptcy on with the tax money of 300 million people. That would be great.

    Also when I researched Special Drawing Rights this is the exchange rate that I found for the following countries.

    http://coinmill.com/CAD_SDR.html#CAD=100

    100 british pounds - 99.77 SDR
    100 us dollars = 63.38 SDR
    100 euros = 88.92 SDR
    100 canadian dollars = 62.15 SDR

    Notice how England is at the top?

    I don't know much about economics, but it seems like this decoupling thing is just a small part of the big picture.
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    Featured Member flickad's Avatar
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    ^^

    The pound has been a very strong currency for quite some years, so I wouldn't put undue emphasis on that. The other numbers are probably more telling.

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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    ^^^ actually, it's the relative movements of the various currencies that really matters. The best 'proxy' for this is the 'US Dollar Index' ... which reflect's the relative purchasing power of the US dollar against a weighted 'basket' of other world currencies.



    It is no coincidence that worldwide commodity prices tend to move inversely to the US dollar index




    Also, as to the untold story of wall street bailouts, if you want to get really upset do some research on 'Maiden Lane' ... which probably starts here ...




    When crooks commit theft by way of fraud aren't we supposed to put them in jail?
    apparently not when those crooks are major political contributors to the party currently in power ! Keep in mind that the US gov't itself essentially did the very same thing by 'robbing' GM / Chrysler bond holders blind during the Government Motors bailout.

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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    Thanks for the links Melonie. I don't know much about economics, but from the little that I have learned recently- I do know that we are being scammed really bad. I am trying to learn more about this stuff.
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    Quote Originally Posted by flickad View Post
    ^^

    The pound has been a very strong currency for quite some years, so I wouldn't put undue emphasis on that. The other numbers are probably more telling.
    If you watch 5 videos about the money system which will take about 4-5 hours all together - you will understand why the pound has been so "strong" for quite some years.

    To visualize what one trillion dollars looks like.
    http://www.youtube.com/watch?v=jfBmA...eature=related

    To understand what the fractional banking is and its history 5 part series 10min ea
    http://www.youtube.com/watch?v=vVkFb26u9g8

    To understand the current world wide problems caused by the fractional banking system 8 part series 10min ea
    http://www.youtube.com/watch?v=_doYllBk5No

    To understand the history of politics and our current banking system 22 part series 10 min ea
    http://www.youtube.com/watch?v=Nry7U6A4w4w

    To understand current world politics and the money scams being pulled all over the world. 9 part series 10 min ea
    http://www.youtube.com/watch?v=E9Ksez51_mY
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    ^^

    Thank you for the links, but the likelihood of my getting around to watching that many hours worth of video is pretty low (though it's possible that others on here will be able to watch them all).

    If you have a text link with a reasonably concise (no more than 8 or so pages) explanation, I'd probably manage to take a look at that in the near-ish future.

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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    ^^
    If you only have time to see one video I would recommend The Secret of Oz by Bill Still. Just do an internet search. It is 1hour and 50 minutes long.
    I needed to watch a lot of videos because I really did not have much of an understanding of economics. But now I do.
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    One I particularly like is the CNBC 2 hour production: "House of Cards"

    http://www.youtube.com/watch?v=P-PCyD7e2PI
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Veteran Member loren's Avatar
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    Thanks threlayer. I'll check it out.
    Quote from House of Cards "It seem like CEO's hit the lottery when their companies collapse"
    Ya check out Hedge Funds and the Global Meltdown -3 part series to learn about put call scams. We don't have an SEC anymore. They just work with the scammers. Our whole system is so corrupt I can't believe anyone would invest in any stock in this country. Our whole economic system is just a joke.
    Here is the link
    http://www.youtube.com/watch?v=ZUJOd...re=relatedHere
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    Default Re: ( Rest of the World ) Decoupling ( from the US Economy )

    ^^ It's been that for quite a number of years. Seems like Congress and the admininstrations would do something useful for the people, rather than just for the big moneyed people. But maybe they have ulterior motives.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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