I’m not an economist, but I need one to explain to me how recovery from the recession has begun in the US given the recent third-quarter GDP growth announcement, because at the moment I don’t believe it to be true.
Living in China for the past year, I’ve seen few visible signs of a global economic recession and if I saw news that China had increased its third-quarter GDP, and had begun a recovery of sorts from the recession, I’d probably believe it. Why? It’s interesting to make some comparisons;
Where China has savings, the US has debt and lots of it. Debt seems to pervade all levels of US society, whether individual, business, financial or government.
Where China builds houses by the hour, many in the US are facing foreclosure and stories continue to surface of ghost towns and suburbs across the US.
Where shopping malls in China are full to the brim with spend-eager patrons, there are stories of many malls in the US that are either empty or bankrupt.
Where the Chinese Yuan is undervalued but relatively stable, the US dollar has fallen dramatically against most major currencies in recent months and seems to be struggling to achieve stability.
Industry in China is buzzing along as it usually does, while industry in the US has taken a slide, the car industry in particular.
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Unemployment in China is difficult to know for sure, but if we double the official rate for good measure, then it would be about 10%, which is also about the official rate for the US. But, and it’s a big but, the US unemployment rate is still trending upwards with losses of more than 250,000 jobs in September alone in the construction, manufacturing, retail trade and government sectors.
The media in China, albeit what it is, sings the single harmonious tune of the state’s desire, while the media in the US has deteriorated into a presentation of polemical noise, narrow-minded name calling and general distraction from the core issues facing the country at present.
So to summarise, how can a recovery be declared as having begun when there is enormous debt, rising employment, no sign of an industry boom to return real value to the GDP, a rising housing crisis, an incompetent media (the major outlets the reach the majority of Americans), missing trillions of stimulus money and a banking system that seems to be designed to continually and efficiently extract wealth from the American people?
There is apparently a “lag” between employment and GDP, they say. Yet with so many rising job losses, perhaps it’s time that economists call a spade a spade (some already have) and declare that rather than a recovery having begun, they are still deeply up the creek without paddle or their swimming togs?
It’s a fairly pessimistic overview, I agree. Perhaps there is a chance that all of this is simply an opinion rather than reality. However, if it is reality, then the US is on the verge of an economic catastrophe and headlines proclaiming the beginning of a recovery seem entirely suspicious.