American Economy

[A Nonny Moose 8,261]

Let's start this topic off with the laugh of the year.

This is the same stupidity that the old Social Credit Party of Canada espoused. I don't see any SoCreds around much any more.

Coining is the same as printing as far as currency is concerned. It doesn't matter what the face value is if it won't buy anything. As the article says, money is a myth that we have all agreed to believe in.

The only real value rises from production of new goods and services. Since governments are completely non-productive, having them as small as possible is one of the great tenets of economics. Governments are there to provide collective service that could otherwise not be so easily provided to the citizenry and nothing else.

[blunder 1,079]

What some people come up with, sheesh.

I like colbert's closing line on this subject: "Whatever's on the back of it, those charmin bears should be on the front. Because when you pull an idea like this out of your ass you're going to need something soft."

http://www.colbertna...eiling-solution

[Architechnid 186]

Wow. Why didn't I think of that?! We're saved! (read with heavy sarcasm if it wasn't obvious)

[Ocram's Razr 964]

The Economy of the USA is in a huge mess. We would be better off raising taxes on the top 25% of Americans and cutting the defense budget by an additional 5-10% instead of raising the debt ceiling.

--Ocram

[macvirt 361]

Let's start this topic off with the laugh of the year.

This is the same stupidity that the old Social Credit Party of Canada espoused. I don't see any SoCreds around much any more.

Coining is the same as printing as far as currency is concerned. It doesn't matter what the face value is if it won't buy anything. As the article says, money is a myth that we have all agreed to believe in.

The only real value rises from production of new goods and services. Since governments are completely non-productive, having them as small as possible is one of the great tenets of economics. Governments are there to provide collective service that could otherwise not be so easily provided to the citizenry and nothing else.

Money was invented as an instrument to measure and exchange trust. Things went awry once we as a species seperated that from actual labour. Our current credit issues globally are a direct consequence of attempts to change the use of the instrument, not just of the changes in methods.

But on the topic of government, heh. Governments do not just exist to provide collective service to populations. That foregoes basic human behavioural requirements of organisation. Unless ofcourse we choose to believe that human group dynamics regulate themselves. Such a belief is possible, after all lots of people believe in a market that is self regulating and fixing Trouble is, it all is human behaviour, and that does not function without buffering that behaviour against itself. And that too, is a role for the idea of government. Because within group dynamics individuals may regulate behaviour but the group will not without agreements, buffers and a sanction mechanism (which is the balance between reward and punishment, in a nutshell, measured against agreed participation, responsabilities and rules), we as a species require artificial constructs exactly for such purposes.

Now keep in mind, government is a term without clear definitions seperated from cultural connotations. We in the west for example tend to see government as seperate from - for example - financial constructs, military, religion, and so forth. Other cultures do not, or have not engaged on that road (yet). It is never a set and fixed concept.

The Economy of the USA is in a huge mess. We would be better off raising taxes on the top 25% of Americans and cutting the defense budget by an additional 5-10% instead of raising the debt ceiling.

--Ocram

Which government. Not only does the country (as such) have multiple ones in terms of concepts derivative of trias politica, but also the country has evolved to become a segregated state divided between economics as element of politics and organisation as element of economics. The struggle in the shift from the first to the second has - in spite of Wallace and others like Marshall - increased since Eisenhower to a point where it is becoming increasingly of interest among the various human sciences to place bets on how long the country will exist in its current state.

Unless ofcourse the actual population manages to punch through the veil of - what essentially is - marketing of all the special interests that treat country and people alike - as resources.

Slightly off topic, it might be an idea if folks took some time to really study sources of information as well as methods and historic developments before engaging in debates stateside. Very often I find it a bit sad that there is a strong element of people not being able (somehow) to seperate themselves from preconceptions that really come forth out of what is called participatory networks - aka seperating themselves first from perspectives of selective interests and approaching topics without the typical perceptions attached.

A fun example is a documentary series by Oliver Stone, the untold history of the united states. For those who's networks do not show that documentary, I'm sure that even in the US it can be found using "other" methods. Readily verifiable information, sources and perspectives. Yet while stateside people tend to jump to debunk, it is interesting to note that in most other places in the world the information contained within is simply part of a much more objective educational curriculum. I can't recall the number of debates I had with the father of a great friend of mine on topics like the airlift campaign to berlin during the blockade who insisted that the city could not even get any food, while the markets and supply was just plain open

[Ocram's Razr 964]

Preferably the national income tax should be raised so rich people would not move to low tax states. WA for instance has never had an income tax. I also support a greenhouse gas emissions tax at the national level.

--Ocram

[A Nonny Moose 8,261]

Well, well. Some interesting stuff so far.

The problem with the current money system is that it is backed by thin air. You can no longer walk into a bank and demand specie for your bank notes and expect to get it in any large amount. This is how banking started in the Renaissance, but it has now become totally corrupted. Since it is a lynchpin of the capitalist system, one wonders how long such a fantasy can endure in the face of natural events.

Legal systems declaring bank notes as legal tender notwithstanding: Laws can only stand when they are enforceable with the acquiescence of the populace.

[flyer2359 92]

The most recent 'Fiscal Cliff' deal didn't do anything to help the United-States (economically and debt wise speaking), that's for sure.

What I think really needs to be done:

-Cut defense spending by 10-20% (would save more than $100 billion)

-Raise taxes on the top .6% to 45% (I know that sounds high, but the majority of them would be making millions every year to begin with). This alone would raise more than $500-$600 billion.

-Raise middle class taxes by 1 to 2%. I know people may not agree with raising the tax on the middle class, but it's going to have to be done in order to get serious about deficit reduction. and balancing the budget.

Doing all of those things would allow the U.S. to begin paying off the deficit.

Unfortunately I don't see any of this happening as money comes more and more into play with today's politics and the parties becoming more and more right wing economically it seems in the United-States. Plus Obama made tax rates permanent for the next 9 years (I think that's just on the middle class though).

I'm just on the outside looking in though since I live in Canada but I figured I'd offer my opinion.

[macvirt 361]

Well, well. Some interesting stuff so far.

The problem with the current money system is that it is backed by thin air. You can no longer walk into a bank and demand specie for your bank notes and expect to get it in any large amount. This is how banking started in the Renaissance, but it has now become totally corrupted. Since it is a lynchpin of the capitalist system, one wonders how long such a fantasy can endure in the face of natural events.

Legal systems declaring bank notes as legal tender notwithstanding: Laws can only stand when they are enforceable with the acquiescence of the populace.

Currency had backing actually, for a very long time. From Assurya to Babylonian days all the way forth to the dark ages after the fall of Rome and the demise of the banks of Constantinople up to the late 19th and early 20th centry, where the last incarnation of a backed finance and currency system (what was known as golden standard balance) became a target of reform by the - back then - leading economies. Notably Great Britain, but also France and later the US finally leading the way to move the global monetary system away from it.

Correct me if I am wrong, but wasn't it Reagan in the US - the man who in spite of accomplishments is still heralded as a hero on both ends of the political divide - who moved the dollar away from the golden standard guarantee? Can't remember whether it was him, I do remember that he had the requirements revised for credit creation for private enterprises to a point where a simple concept like oversight became something between discouraged and even disallowed, something which was made part of policy instructions for the WTO and World Bank to follow and implement in their finance regulations & requirements.

[A Nonny Moose 8,261]

Actually it was Tricky Dick who messed things up with the final gasp of the Gold "exchange" Standard. Anyone calling this link is in for a long walk through fiduciary history. I was working for a chartered bank in the retail division when President Nixon stopped the world with this one.

[Jasoncw 11,843]

The coin is designed to avoid two major issues.

The first is that it would be horrible to default on our debt. It would be a financial disaster. And since it's so unprecedented, no one even knows exactly how it would work, and the more anyone thinks about it, they only discover more and more ways in which it would be devastating.

The second is that it's illegal according to the constitution to default on our debt. But at the same time according to the constitution, congress are the only ones who are allowed to raise the debt limit, and they may refuse to do so.

But there's a loophole, which is that at some point congress delegated the ability to the treasury to make platinum coins of any denomination. It was intended for commemorative coins but technically it could be used for this purpose. Congress also has the ability to undelegate this power, but that would require a certain number of votes which Republicans presumably wouldn't be able to find.

So the coin allows us to advert financial disaster, and not break the constitution. The reason it's a platinum coin is because that's just how the legal technicality worked out. But really it's just some clever legal work and accounting which allows us to raise the debt ceiling (and not default), do it legally, and without congress.

Now, something I've read which I think is a much much better solution than actually making the coin, is making a trade. The coin thing is totally silly, but the debt ceiling is also totally silly. The situation right now is that congress appropriates a certain amount of spending that the executive branch is forced to make. But the executive branch doesn't actually have control over the money itself.

It's like holding someone at gun point, and telling them that they have to go to the grocery store and buy a loaf of bread, and that if they don't you'll shoot them. And then at the cash register telling them that they're not allowed to pay for the bread, or else you'll shoot them. And that if you try to steal the bread from the grocery store, you'll also shoot them.

So the solution is that the president offers to sign a bill that would both revoke his ability to make platinum coins of unlimited denominations and abolish the debt ceiling at the same time. The ability to pay the spending that was appropriated would be implied, as you would normally assume it would be.

Congress and the country is free from this perpetual debt ceiling battle (remember that "the fiscal cliff" was actually the solution to the last debt ceiling battle). If congress wants to lower deficits or the debt they can do it through typical legislative means, just like they normally would have, before Republicans got the idea that holding the country's or even the world's fiscal and economic stability hostage to accomplish their one sided policy goals was a good idea.

[macvirt 361]

The coin is designed to avoid two major issues.

The first is that it would be horrible to default on our debt. It would be a financial disaster. And since it's so unprecedented, no one even knows exactly how it would work, and the more anyone thinks about it, they only discover more and more ways in which it would be devastating.

The second is that it's illegal according to the constitution to default on our debt. But at the same time according to the constitution, congress are the only ones who are allowed to raise the debt limit, and they may refuse to do so.

But there's a loophole, which is that at some point congress delegated the ability to the treasury to make platinum coins of any denomination. It was intended for commemorative coins but technically it could be used for this purpose. Congress also has the ability to undelegate this power, but that would require a certain number of votes which Republicans presumably wouldn't be able to find.

So the coin allows us to advert financial disaster, and not break the constitution. The reason it's a platinum coin is because that's just how the legal technicality worked out. But really it's just some clever legal work and accounting which allows us to raise the debt ceiling (and not default), do it legally, and without congress.

Now, something I've read which I think is a much much better solution than actually making the coin, is making a trade. The coin thing is totally silly, but the debt ceiling is also totally silly. The situation right now is that congress appropriates a certain amount of spending that the executive branch is forced to make. But the executive branch doesn't actually have control over the money itself.

It's like holding someone at gun point, and telling them that they have to go to the grocery store and buy a loaf of bread, and that if they don't you'll shoot them. And then at the cash register telling them that they're not allowed to pay for the bread, or else you'll shoot them. And that if you try to steal the bread from the grocery store, you'll also shoot them.

So the solution is that the president offers to sign a bill that would both revoke his ability to make platinum coins of unlimited denominations and abolish the debt ceiling at the same time. The ability to pay the spending that was appropriated would be implied, as you would normally assume it would be.

Congress and the country is free from this perpetual debt ceiling battle (remember that "the fiscal cliff" was actually the solution to the last debt ceiling battle). If congress wants to lower deficits or the debt they can do it through typical legislative means, just like they normally would have, before Republicans got the idea that holding the country's or even the world's fiscal and economic stability hostage to accomplish their one sided policy goals was a good idea.

Defaulting is hardly unprecedented in the history of nations. To be honest, it's been one of the most popular instruments of trade agreements over the millennia. Same for that dreaded topic of a forced credit crunch, aimed at decreasing the power of what effectively is virtual monetary value without backing in production, labour or resources.

I doubt the constitution is as big as a hurdle for any reform than the divide within the country though. To be honest, if there are two things which the US should put on the table for debate first it is a) the political divide between two sides who have become special interest groups of b) the fundamental shift in cultural, societal and legal organisation from economics as part of instrumentation of politics to politics as part of instrumentation of economics.

These are issues, which in the absence of external catalysts of (cultural, economic and other) impetus will have to be addressed. There is no prospect of a viable external catalyst in the next 50 years for the US to capitalise on for continuity. Not even in a political or military sense, unless ofcourse once again that is created. So what is an internal challenge cannot be addressed with external challenges (to distract, or utilise even in an economic sense) will continue to be just that: an internal set of challenges waiting.

Question is whether the populace will be able to step outside of the established boxes of participatory networks. It is very easy to slag off things like Republicans and Fox News, or Democrats and birth certificates. But Americans still watch that, and go by it. If that does not change, all that's left for countries on such roads in history tends to come down to "bread and games". Old recipee. Fails every time when tried for longer than the short term use.

Your alternative to coin, the trade analogy, I should mention is something quite a few think tanks have explored over the decades. The trouble is that due to the relations (legal and otherwise) between the states and their banks and the federal government and the federal reserve this is simply not possible. There's quite a few economists out there who are convinced that going back to that day where the US managed to seperate itself from that institute would really not be a bad idea. After all, it's been at the basis of every global monetary crisis since its reaffirmation in the years before what we today remember as the first fall in the interbellum. For the US government to even be remotely able to do such things would require fundamentally altering the relations with the Federal Reserve, and in practical terms putting an end to its current form of functioning and power.

By the way, this or that party holding this or that hostage is a bad thing yes. But, keep in mind that is not a typical US problem. Every imperial power across history has done that. I'm not saying it is right, I'm just saying that it is not unique. It is a cycle which countries engage in, which either only end through great cataclysms or through the populations no longer participating in the support networks of representations that continue that cycle.

The US has a bit of a similar problem in that regard as the UK once did, for example when it was busy holding a continental Europe hostage again at the forefront of yet another war when France was wondering about their agreements with the US "but what about your word, what about honour". This takes the form of a two party system, which really only masks a deeper issue: that of societal organisation across and by support networks and dependancies of ideologies. Look at it this way, how many Democrats or Liberals would change their votes on a basis of no confidence in system, as ones both Tories and Liberals in the UK (note, in the UK example it was a cataclys that forced the changes, multiple ones even, from the Boer war to WWI and ultimately WWII - basically 3 wars and still remnants of divide exist, go figure).

[A Nonny Moose 8,261]

Interesting posts, the last two. The legality or not of the US defaulting is moot. You can't make laws against things that are inevitable because eventually the tide must come in. Too much time and BS is spent on whether some major event is illegal or not. I suppose some character in congress will try to make south Atlantic cyclonic storms illegal next. I guess they've forgotten, or likely never learned, about King Canute and the tides.

Any of the proposed actions so far are inflationary.

As for the division of the states into the red and blue factions, an election was just held and the results are not even cool. What ever happened to the UNITED States of America? What has happened to the idea of the greatest good for the greatest number and the will of the majority? Have the Americans become that cynical? Or have they just lost their direction? Everyone tail on to this line and pull in the same direction or the ship of state will probably founder on the rocks that are all about.

[LexusInfernus 908]

Defaulting is hardly unprecedented in the history of nations. To be honest, it's been one of the most popular instruments of trade agreements over the millennia. Same for that dreaded topic of a forced credit crunch, aimed at decreasing the power of what effectively is virtual monetary value without backing in production, labour or resources.

It is not, but if the US defaults? The side effects of that could be quite nasty. The most important one would of course the fact that it would also bankrupt the political system. Everyone knows that the US is not even close to having to default, so would it suddenly happen, than it will be the result of Washington and the decision makers who screwed up big time. Also, their debts are not insignificant. A default might be a serious shocker to a lot of people who are expecting money from the US.

[macvirt 361]

Defaulting is hardly unprecedented in the history of nations. To be honest, it's been one of the most popular instruments of trade agreements over the millennia. Same for that dreaded topic of a forced credit crunch, aimed at decreasing the power of what effectively is virtual monetary value without backing in production, labour or resources.

It is not, but if the US defaults? The side effects of that could be quite nasty. The most important one would of course the fact that it would also bankrupt the political system. Everyone knows that the US is not even close to having to default, so would it suddenly happen, than it will be the result of Washington and the decision makers who screwed up big time. Also, their debts are not insignificant. A default might be a serious shocker to a lot of people who are expecting money from the US.

Nasty? Really? Look at it from a perspective of governance. Since the reaffirmation of the FED, the policies attached to what became known as the Marshall plan and later the use of the World Bank and IMF als instruments of policy, there are not that many governments who would not welcome a way out of the established dependancies on the US financial policies excercised. Simply put, nobody will mind a way out of what is commonly described as the "hostage principles" that are in place.

Not even if that means a credit crunch, or an outright devaluation of virtual monetary value. Particularly if done in a controlled manner. EU countries have a few centuries worth of historic experiences with such concepts Most of the 3d World debt deposits are part of those vast blocks of virtual monetary value floating around, they are really not going to mind getting rid of the control instruments attached to even just the interest payments for those. China? It would face substantial losses in strategic investments in developing countries yes, it would also have to write off several degrees of security investments in monetary funds in the EU (but also in Russia and the Middle East), but it would gain an absolute and de facto financial control over strategic financial interests of the members of Nafta (which includes the US). It would also force the policy instruments of the IMF and the World Bank to be decoupled from the current controlling participant member country, the US. East Asia, but also the Pacific would find itself scrambling to switch monetary couplings from the dollar back to a more diversified (and healthier) system of coupled currencies. Australia, now that would face some dire challenges, but it does have a position of luxury as a resource provider to those economic zones where labour is still linked to economic growth (for example China, but also many developing countries - unlike the US).

To be honest, the most tangible consequence would be that of the bankrupcy of the current participatory networks present in the divided US. Political system is just one aspect, symptom even, of this. Another element is media, but also mainstream US finance, and so forth. The irony is that the US would have to recreate an internal market directly tied to both internal consumption and production. Much like Germany for example after the second World War and the policies imposed by the Allies (with, let's be honest, great succes for that country). To be blunt, it would end up proverbially killing everything in terms of institutions and organisations, even cultural traits over time, of those elements that control the country today. At great cost yes, especially because so many industries in the US are subservient to that. Look at how funds are divided through the use of both state and federal government by economic organisations and enterprises. Even the military has become an economic entity to degrees far far worse than modern day Egypt or historic predecessors as for example Rome after Augustus.

The question that really should be asked is whether it is worth trying to adapt a system through governance which has historically demonstrated to have become nothing more than an extension of economics, which unfortunately directly means special / selective interests. There are good reasons why through massive and painful experimentation human organisation has come up with the idea of balance of power. In our modern times, politics is prevented from recognising that economics has become the 4th power next to the original trias politica constructs. Direct result of that is that this 4th power can by default only be in service of special interests in cycles of competition. With the direct consequence that on this scale, anything connected becomes - just like in business, what this really is - a resource, and is treated as such. The various Bush administrations for example were nothing short of pyramid schemes utilising a country as a motive resource. The Reagan administrations carried the same methods of directive organisation. To be honest, there has not been an exception to this since well before Eisenhower. What is sad, is not that people still believe the marketing, it's that what was once a dream for an entire world (the US was that example and inspiration until it chose to engage on the path of imperialism with blowing up the Maine) has become just that: marketing.

Look, defaulting will bring great costs, and turmoil, that should be clear. But this is not something that can still be done on a national level. For that the interdependancies between economic zones have become too intrinsically linked (notable exception: china, which prioritises a resource economy model much like that which enabled the first growth spurt of the US, which sadly has been forgotten long since and ditched in favour of credit constructs which do not really create tangible value at all, just debt - and debt is a control instrument in finance) so any such course change would have to take place on a supranational level.

But it can be done. It has been done, just in different times where the "world" was merely "smaller". But not in the format of simple defaulting, but in the format of adjusting the value of those monetary volumes which are not directly backed by or linked to actual tangible elements of value. And there lies the problem, those monetary reserves and blocks floating around, they are instruments of policy. Yes, things would get shaken up, but there are definite and clear productive results of such a course change, particularly for global prospects over long term. The trouble is that it would a) remove the ability to create wealth from declarations of debt and b) remove the basic of the political and economic balance of power as it exists in todays post WWII and Cold War world.

Defaulting is an escape card, which carries the risk of tainting the deck. But as I said, there are better ways of solving the structural issues. It is however a moot debate until that day where the country as a whole can shake itself apart from being stuck with tainted mirrors from this or that side and the traps of ideology. Human dynamics should never be put in fancy theory vulnerable to "I want to believe" and other syndromes. It should be taken "as is", step by step, with mechanisms attached to offset the pitfalls of human behaviour. It should just not be put to use as a means of economics / politics / selective interests / etc.

[Haljackey 17,332]

This video does a good job explaining the economic mess in the US:

I don't think its as gloomy as the video suggests. Government should cut spending on non-essential services and defense. Spending should be increased on programs with a high return on investment like education and NASA.

Raising taxes are a tough issue but should be at a point where they are competitive with countries that have a similar standard of living. Corporate and other taxes could follow this rule as well.

[hym 358]

I don't think its as gloomy as the video suggests.

Actually, that video does a very good job describing the situation. The reason people are clamoring for the government to get control of it spending habits is because the US is headed for default if it doesn't.

Government should cut spending on non-essential services and defense.

While that is nice, it stills misses the fact that welfare spending absolutely must be cut. If the US isn't willing to cut welfare spending, the only way to restore the balance of money flowing in versus out is a complete shutdown of the federal government and military. Neither of this are politically palatable.

Spending should be increased on programs with a high return on investment like education and NASA.

There isn't any money to do that.

[blunder 1,079]

The funny thing to me about the coin idea is no-one (on the news) mentions just how much platinum it would take to legitimately pay off the debt.

estimated debt as i type: $16.440 trillion

market value of platinum as i type: $52.33 USD/gram (yes i'm using metric. deal with it)

$16.44 trillion / 52.33 = ~314,160,000,000 grams of platinum

The density of commercially pure platinum at room temperature is 21.45 g/cm^3, so we would need ~14.646 billion cm^3, or rather 14,646 cubic meters of platinum.

Good grief

[Ocram's Razr 964]

They could make the coin any arbitrary size and any arbitrary value. That would mean that stealing this little coin would be extremely lucrative but damaging to the USA.

--Ocram

[Duke87 1,070]

The funny thing to me about the coin idea is no-one (on the news) mentions just how much platinum it would take to legitimately pay off the debt.

When you have a fiat currency, there is no requirement that the value of the metal in a coin match its face value. Indeed, the metals in pennies and nickels are currently worth more than the coins' face value, which has caused some problems. The metal of the quarter, meanwhile, I believe is only worth about 12 cents.

So they could make an ordinary size coin and declare it to be worth a trillion dollars. No problem.

[A Nonny Moose 8,261]

Discounting the foolishness over the platinum coin, let's think about what would happen if the U.S. did default. Most of the government debt is held by Americans, I believe. A lot of funds that are the support of widows and orphans would find themselves out of cash. This could result in a serious expansion of the welfare rolls in America. The worth of United States savings bonds would be in serious trouble.

The international repercussions for off-shore bond holders will be not nice, but in general, given that most countries don't put all their eggs in one basket, the recovery shouldn't take many years. Remember, we are really not talking about current account items that result from trade, but loans taken by the US by issuing bonds. There is too much American paper around, and it is time the US found the currency to buy a great deal of it back. As an investment vehicle, bonds of various governments are becoming moot.

And by the way, default means missing a payment on the debt interest.

[Haljackey 17,332]

Who's bright idea was it to go off the gold standard?

Ah well, maybe we can just create the platinum standard instead

[A Nonny Moose 8,261]

Who's bright idea was it to go off the gold standard?

Ah well, maybe we can just create the platinum standard instead

Since you asked. There was a lot of fault, but I think the Brits started the slide from grace.

Then some 20th century charlatans, ... uh ... economists, convinced governments that this could be done away with. JMK and JKG come to mind immediately. Specie is the only thing whose value doesn't change as the circulating currency floats up and down in inflation/deflation cycles. Uncut diamonds are a boy's best friend.

A return to a Gold Specie Standard would bankrupt almost every country because the fiat currency in circulation far exceeds the total gold in the world.

[LexusInfernus 908]

Who's bright idea was it to go off the gold standard?

Ah well, maybe we can just create the platinum standard instead

America's idea when they needed the cash to fight the war in Vietnam.

Aside from that, a gold standard would neither have prevented the current debt issue, nor is it a solution. And it would significantly slow down economic growth as gold is finite, therefor the cash is finite.

[A Nonny Moose 8,261]

Who's bright idea was it to go off the gold standard?

Ah well, maybe we can just create the platinum standard instead

America's idea when they needed the cash to fight the war in Vietnam.

Aside from that, a gold standard would neither have prevented the current debt issue, nor is it a solution. And it would significantly slow down economic growth as gold is finite, therefor the cash is finite.

Too true, but think about the rate of "growth" and ask yourself if it is sustainable?

[LexusInfernus 908]

Too true, but think about the rate of "growth" and ask yourself if it is sustainable?

Sure, if its handled with care. Without excessive risk taking and the creation of all sorts of weird products that make no sense if you think about it, it is perfectly sustainable.

[A Nonny Moose 8,261]

Weird products? You mean useless toys like smart phones? CES has just finished in Las Vegas and I can hardly believe the things that manufacturers are expecting consumers to buy. Of course, the sheep will consume this stuff avidly as soon as it can be had.

[Meg 368]

I wouldn't call the smart phone a useless toy. There have been many times that I've been out and about and needed to look something up. In the old days, we would just have to stop somewhere and find a phone book. or find a pay phone so we could call home and see if anyone there happened to be around when someone else happened to call.

Yes, we managed to live life for centuries without them and, yes, one could argue they are more a convenience than a necessity. But I wouldn't call them useless.

[LexusInfernus 908]

Weird products? You mean useless toys like smart phones? CES has just finished in Las Vegas and I can hardly believe the things that manufacturers are expecting consumers to buy. Of course, the sheep will consume this stuff avidly as soon as it can be had.

No, I meant financial products.

Stuff like smartphones are good to have.

[hym 358]

No, I meant financial products.

Weird product is a relative term, however. To my mother, "selling short" would be a weird product. To me, it would just be another investment method.