...what is still underappreciated is that, if you look at the recovery in GDP since before the crisis, 83% of the increase is explained by higher prices. Only 17% is from an increase in demand. That explains the profit margin story. Companies have been able to pass on higher prices, even in the most discretionary forms of consumer spending. If you look at retail sales, actual units sold are lower than they were before the crisis. It's entirely an inflation story on the retail sales side. Consumers aren't buying more because they feel great. They are spending more because the prices have gone up. But now consumers are reaching their limits. Since June 2010, households have drawn down savings. But in the past three months, they've put $65 billion back into the cookie jar, which suggests that they've reached their threshold. Middle-income consumers are also adjusting to the new realities of living within a budget.
.jpg)
6 comments:
Roger,
Glad to hear that Walker Fire was involved in yesterday's Firewise expo. I thought I'd take a moment to brag a bit that my community, TimberRidge, here in Prescott was the first designated Firewise community in the United States. We've been active in maintaining our Firewise designation for about a decade now. Every year I breathe a sigh of relief once we make it to the moonsoons.
Roger,
can you recall what you based your decision to sell Telefonica back in 2008.
Tx
Jeff from nyc
The key in 2011-2012 has been to owen the correct stocks and avoid others. In 2009 it was buy galore. in 2008 was sell galore. Maybe as you sayed 2013 can be sell galore?
What do you think Roger?
Pomboy is scary smart but, to paraphrase Mark Twain, reports of the death of fiat currencies are greatly exaggerated. If nothing else there are way too many very large and very powerful apple carts that would be up-ended.
NB: I do expect the dollar to continue strengthening however: when one of the big three reserve/trading currencies is threatened, demand for the others increases.
There are always people from Timber Ridge at the PAUWIC meetings I attend every month. I had no idea it was the first Fire-Wise community--wow.
Jeff it really was as simple as it being an obvious conclusion from reading WSJ, FT and about six different blogs that I thought would understand that things were clearly going to be worse for Europe than for the US but that it would be bad for the US too.
7:01, it seems clear to me that the odds for a decline in 2013 are heightened for a combo of cyclical and political factors.
RW, not mentioned in the Pomboy interview (unless I missed it) is that there is not enough gold to back the dollar unless they devalue the hell out of it.
Roger, it's potaato vs. potato, but I was thinking gold would have to be inflated to at least several hundred thousand bucks an oz to make a global hard currency regime work which would make current gold holders (and some central banks) really, really happy
...everyone else not so much, particularly when they discovered that credit was limited to savings and, eo ipso, could no longer be extended to everyone who needed it even if they were qualified.
Post a Comment