With the US economy booming, it’s morning in America again

[Thinking]

US only knows how to keep borrowing money at 36trillion debt therefore its economy is failing if it can't pay back.

See, the problem is that US is borrowing from "itself". And those printing the money are clueless about it as much as you and I. As long as dollar works as most traded currency, American debt means nothing,

 

[Yommie]

Lol what? Back in 1800s what qualified for a better life? I bet civil war was the best time to be around! Go Irish!

America peaked in the late 70s and the 80s. Back then Americans had energy and passion. Today's Americans are lazy socialists. Today there is no more good Hollywood.

 

[j_hungary]

Economist Steve Hanke: US still faces recession, warns economist before possible interest rate cut
One good indicator on health of US economy is value of gold, when its high it means the value of the dollar has fallen and people are moving their investments to this time tested safe haven.

View attachment 65718

Its currently at the highest its ever been. For me that's a worrying sign.

Gold strong does not mean dollar value has fallen, this article explains very well the relationship between gold price and US dollar strength

Is correlation between Gold and the broad US Dollar growing?

Price action in Gold is telling you that macro fund positioning is extreme, TDS commodity analyst Daniel Ghali notes.

www.fxstreet.com

Gold is a hold over investment, USD is a short-term exchange, both are at different level of trading scheme. The Marco Fund (or Marco Hedge Fund) example the article use is base upon global incidents (COVID, War in Ukraine and so on) while the US grow are solely based on US economic performance.

 

[lightning f57]

Gold strong does not mean dollar value has fallen, this article explains very well the relationship between gold price and US dollar strength

Ofcourse the value of the dollar has that's why you need more dollars for the same ounce of gold. Vs other currencies or comodities is a different thing. One uses gold for comparrison as after the dollar its the unofficial time tested reserve currency in the world.

 

[Thinking]

Gold prices do rise because of "inflation" but current rise has nothing to do with Dollar. Since Corona onwards, demand has pushed the prices higher. Currently China is leading cause of rise in gold price.

 

[j_hungary]

The US needs to revisit its economic model and control debt. Discourage use of credit cards for everyday purchases. People don't get paid? Why are they supposed to buy everything on credit terms? Why not use debit card? Control this bad habit.

lol, 36 trillion debt is not from any of the credit card or line of credit (like home loan, car loan or personal loan) Otherwise it's one hack of a credit card debt the American racked up.

Half of the problem for the US debt issue is that US have a non-responsible fiscal policy. This is really not as bad as it sounded, it just mean they can't (or rather, won't) balace the book. While the other half is because USD unlike most currency in the world, is also used as Forex.

USD have 57 or 58% share in the currency basket, which mean if things really reflected that way, the world is holding 58% of their forex in USD. If you are using it as forex, you essentially taking those currency out of their circulation, because you are storing them in another country. It does not goes into people hand for example , buying pajamas in Walmart.

The issue here is, you can't really have country like China, Japan or Australia to hand back the USD to you, on the other hand, you can't really print more to offset the USD other countries is holding, the solution is basically to jack rack up debt and push the settlement period. So you can "reuse" those USD without printing new bill or issuing new Line of Credit.

I mean, have you ever wonder why if you pay money from a bank account to another, it needed 24 hours to clear if both aren't the same bank, even if they are in the same country? I mean if we go by today IT standard, a buy order issue for the other bank and the sell order from your bank should be able to issue and communicate within hours, if not minutes. So it should be clear immediately like you would bank at the teller. But why the wait? That's because the bank you are paying to is looking for currency to buy and the bank you were using is looking for currency to sell, and they can't do it immediately. And that's why you have a day gap between a transaction. And you know if you ever done TT or international transfer, that time is lengthen to 2 to 3 business day, that is the time both bank need to buy and sell the USD in order to make the transfer. It's a constant game of cups and lids.

 

[j_hungary]

Ofcourse the value of the dollar has that's why you need more dollars for the same ounce of gold. Vs other currencies or comodities is a different thing. One uses gold for comparrison as after the dollar its the unofficial time tested reserve currency in the world.

again, that's a reflection point. Its4 dollars to buy a big mac today while I only need $3 to buy 10 years ago does not mean big mac is selling stronger now than it was 10 years ago.

Unless you link the price between gold and USD (or pegging), it does not reflect which one is stronger and which one is weaker, as they both reflect on different things

 

[LeGenD]

lol, 36 trillion debt is not from any of the credit card or line of credit (like home loan, car loan or personal loan) Otherwise it's one hack of a credit card debt the American racked up.

Half of the problem for the US debt issue is that US have a non-responsible fiscal policy. This is really not as bad as it sounded, it just mean they can't (or rather, won't) balace the book. While the other half is because USD unlike most currency in the world, is also used as Forex.

USD have 57 or 58% share in the currency basket, which mean if things really reflected that way, the world is holding 58% of their forex in USD. If you are using it as forex, you essentially taking those currency out of their circulation, because you are storing them in another country. It does not goes into people hand for example , buying pajamas in Walmart.

The issue here is, you can't really have country like China, Japan or Australia to hand back the USD to you, on the other hand, you can't really print more to offset the USD other countries is holding, the solution is basically to jack rack up debt and push the settlement period. So you can "reuse" those USD without printing new bill or issuing new Line of Credit.

I mean, have you ever wonder why if you pay money from a bank account to another, it needed 24 hours to clear if both aren't the same bank, even if they are in the same country? I mean if we go by today IT standard, a buy order issue for the other bank and the sell order from your bank should be able to issue and communicate within hours, if not minutes. So it should be clear immediately like you would bank at the teller. But why the wait? That's because the bank you are paying to is looking for currency to buy and the bank you were using is looking for currency to sell, and they can't do it immediately. And that's why you have a day gap between a transaction. And you know if you ever done TT or international transfer, that time is lengthen to 2 to 3 business day, that is the time both bank need to buy and sell the USD in order to make the transfer. It's a constant game of cups and lids.

American economic model is strange and people are asking questions. The US must have fiscal discipline and attempt to reduce its debt.

https://www.cato.org/blog/why-germany-should-preserve-its-debt-brake-us-should-adopt-one

 

[lightning f57]

again, that's a reflection point. Its4 dollars to buy a big mac today while I only need $3 to buy 10 years ago does not mean big mac is selling stronger now than it was 10 years ago.

Unless you link the price between gold and USD (or pegging), it does not reflect which one is stronger and which one is weaker, as they both reflect on different things

You could make that argument for everything of value today including stock markets.

Gold is one indicator of many which is helpful to see how the US economy is doing.

 

[BHAN85]

Everything is not money.

America today, compared to the America I grew up in |

www.paulcraigroberts.org

 

[j_hungary]

American economic model is strange and people are asking questions. The US must have fiscal discipline and attempt to reduce its debt.

https://www.cato.org/blog/why-germany-should-preserve-its-debt-brake-us-should-adopt-one

Well, strange as you say, US economy works on said model due to a lot of different factor, one factor in particular is political partisanship. Kind of like every other election issue, you have 2 parties that don't want the issue solved by the other and politically tanked their policy. We saw that in build better bill and the immigration reform bill.

Can the US solve its debt problem? Of course, it's not going to be overnight, and it's not going to be easy, but it's doable, but nobody wants it to be solve because it gives credit to the other party.