Bad October

The ISM index fell to 51.2 in October, down from September. A recent Study due to be out soon suggests that the Outsourcing of White Collar jobs will only increase in the future. The Housing market is slowing down, and Construction spending is down as well. Nouriel Roubini provides a good Post showing that Corporate Profits had only about an 8.5% growth in Q3–this still pre-inflation scaling. How did We get here?

This article states all Central banks are getting worried about the rapid growth in the Money Supply. First, I would like to say that the threat is very real, the U.S. economy already suffering from the excess flow of Cash. Excess funds without real Investment potential will vastly inflate the Markets–Stocks, Bonds, Commodities, and Real Estate. The Bubbles created hamper normal Business Profits, raise Consumer Prices, and inflate the Cost of Government social programs; even if the Bubbles do not burst to the detriment of All. I wish to thank Sybil’s Star for the link to the article. Where does the flow of Cash come from?

Mark Thoma presents a good Post on Populism. The worries of the Democrats are real, but everyone stills misunderstands the rise of Inequality. Almost all of the Those growing Rich hold an intrinsic position in the Export Trade, not matter the manner of such involvement. Why is the Export Trade so important in the factorization of Inequality? Because American Exports extract economic profits from the Goods which they trade; coming through the usage of Patent rights, monopoly of markets, capacity to fulfill Good quantities, or mastery of the Distribution system. Foreign Consumers cannot track the actual Production Costs of American Producers, while the U.S. Government has no interest in monopoly controls in the Export Trade. The trouble resides in the fact that increasing Inequality raises domestic Consumer Costs for Goods and Services, and therefore, American labor outside the Export Trade endure a falling Standard of Living.

The huge flow of Cash comes from the Export Trade, but has no position in the American economy in which to be soundly invested. The excess cannot be absorbed by Consumerism of the SuperRich, though their attempt to do so raises Real Estate Costs and some degree of Consumer pricing overall. The Cash Flow invasion of Markets generate the greatest threat, and Labor demands to keep up with the Standard of Living propel Outsourcing. lgl