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alstry (34.92)

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May 11, 2009 – Comments (5)

BEIJING, May 11 (Reuters) - The United States risks a Japan-style lost decade of growth if it does not take aggressive action to stimulate its economy and clean up its banking system, Nobel Prize-winning economist Paul Krugman said on Monday.

"We're doing half-measures that help the economy limp along without fully recovering, and we're having measures that help the banks survive without really thriving," Krugman said.

"We're doing what the Japanese did in the nineties," he told a small group of reporters during a visit to Beijing.

He said it was not clear that China would suffer sub-par growth as a consequence of the fallout of the present crisis.

"I'm mostly worried that the U.S. and the euro zone will have Japanese-type lost decades," he said.

http://uk.reuters.com/article/governmentFilingsNews/idUKPEK5258120090511

The BIG difference is Japan was able to export its way to no growth and its people had little debt!!!!!

If we continue down the same path....Japan would be a good result......PREPARE....DON"T FEAR!!!!!!!!!!!!!!!!!!!!

5 Comments – Post Your Own

#1) On May 11, 2009 at 12:39 PM, jddubya (35.16) wrote:

"A second stimulus is becoming clearly urgent. They need a very, very strong stimulus," said Krugman, a Princeton University professor and a New York Times columnist.

How do you interpret Krugman's comment?

What words of wisdom outide of "prepare" can you come up with based on this comment?

Pay down debt with your own money so that it can be used to finance this stimulus?

Are you agreeing or disagreeing with this comment?

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#2) On May 11, 2009 at 1:05 PM, SolarisKing (57.99) wrote:

The single sentence shows no context, but i could interpret that as. . .

'those that thought the problem was over are now seeing it's just beginning. "a second stimulus is needed" and that still won't fix things because they aren't spending the money the right way'.

Asking alstry to pick a stock for you is like asking a yogi which medicine to take. He's just going to tell you 'get up early and take a walk'.

I know that the end may be far from here, but the absolute hegomony of america was fabricated by forces that won't apply as fully in the future. So long time or short time, it's gonna' change.

I hope it takes a long time, because i could be more ready, but i really don't see a way to borrow yourself out of credit, especially if almost everyone is in debt. We just don't need more houses, offices, or cars, for a few years. And that says alot about concentric contraction.

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#3) On May 11, 2009 at 2:11 PM, outoffocus (22.75) wrote:

I thought TMFLomax had already cornered the "zombie" blog market.

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#4) On May 11, 2009 at 3:21 PM, alstry (34.92) wrote:

jd,

That is the $64K question right now that the Institute is wrestling with.....

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#5) On May 11, 2009 at 3:29 PM, alstry (34.92) wrote:

Denninger beginning to pick up on the FACT that America is shutting DOWN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

State Sales Tax Revenues tell the story.  California is absolutely cratering, for example:

Sales taxes were $452 million lower (-50.9%) than last April, and personal income taxes were down $5.7 billion (-43.6%).

Fifty percent?!  FIFTY?

California is responsible for thirteen percent of the total US GDP and if it were an independent nation it would be the tenth largest economy in the world.

The idea that we can have some sort of economic recovery while the sales tax receipts - which are a direct measurement of consumer activity - are down by half is pure insanity.  Where is the economic activity that is going to create this "recovery"? 

And let me remind everyone - sales tax receipts are not a lagging indicator, they tell you what is going on right now.

http://market-ticker.denninger.net/archives/1030-The-Economic-Tsunami-Is-Curling-Over.html

We may have to put Karl on the Board of the Institute of Alstrynomics.

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