Sunday, August 07, 2005

When should we start being really scared?

As an non-economist, when should we start being scared?

1) We have a household savings rate of 0%.

2) Huge deficits in both current account and government, to the tune of several hundred billion a year.

3) A spookily-flat yield curve (my bank will loan me at <6% for 30 years, but will borrow from me at ~3.8% for just 9 months!), which says that some huge amount of long term money is amazingly optimistic.

4) A real-estate market in areas that is so horribly bubbled that tax-adjusted interest, property tax, and HOA/maintinence is vastly more (30%+) than rent.

5) and a government in total denial.

When should us normals start being really, REALLY scared? As Kent Brockman asks on the Simpsons: "Is now the time to panic?"


Anonymous said...

Holy SHIT you were right about the housing bubble. haha. Good Job. Go trade stocks.

nsk said...

Considering the rise of Asian powers, particularly China, if America were smart it would seek to create an Atlantic Union with the EU, Canada, and maybe Australia and NZ as well. However, even with the Asian threat over our heads (bu threat I mean that they will outproduce our industries if we don't find anything more valuable than Big Macs and copyrighted software to produce), USA still sees EU as an economic competitor.