US vs. Europe

[Riverwind]

I read this fascinating article The Economist that really skewers the widely held conceit that the American economy is inherently stronger than the economy of 'Old' Europe. The article is interesting not only because it contradicts the widely held beliefs among American thinkers but also because it appeared as a lead story in a magazine dedicated to promoting laissez-faire capitalism. The article is available to subscribers only but here are some quotes:

The main reason for the dollar's strength has been the widespread belief that the American economy vastly outperformed the world's other rich-country economies in recent years. But the figures do not support the hype. Sure, America's GDP growth has been faster than Europe's, but that is mostly because its population has grown more quickly too. Dig deeper, and the difference shrinks. Official figures of productivity growth, which should in theory be an important factor driving currency movements, exaggerate America's lead. If the two are measured on a comparable basis, productivity growth over the past decade has been almost the same in the euro area as it has in America. Even more important, the latest figures suggest that, whereas productivity growth is now slowing in America, it is accelerating in the euro zone.

So, contrary to popular perceptions, America's economy has not significantly outperformed Europe's in recent years. And to achieve this not-much-better-than parity, America has had to pump itself full of steroids. Since 2000 its structural budget deficit (after adjusting for the impact of the economic cycle) has widened sharply, while American households' saving rate has plunged, causing the current-account deficit to swell. Over the same period, the euro-area economies saw no fiscal stimulus and household saving barely budged.

http://www.economist.com/opinion/displayst...y_id=E1_RPVPTSJ

[Charles Anthony]

Are you suggesting that countries need more market intervention to stay afloat?

Things are a little more complicated but they may be even worse than suspected. The whole world may be in for a shock.

Death Knell of the US Dollar...

When the forces of globalization are let loose, as they have been, this is actually a natural and inevitable process, as orders and work simply move to the lowest bidders. Europe and the United States are uncompetitive and will be sidelined by the powerhouse economies of China and South East Asia. The Chinese and other trading partners with the US are already rotating out of dollars and into Dinars, Euros, commodities generally and Precious Metals at an ever increasing pace. As we already know, this has been a primary driver for the commodities boom. The recent attempt by the United States to maintain its dominance by brute force - a big reason why Iraq was invaded was that it was planning to sell its oil in Euros - is right now, quite literally, running into the sand, and it is now only a question of when, not if, the helicopters arrive on the rooftops to evacuate the last of the embattled US service personnel, like in the film "The Killing Fields", although a last wildly dangerous attack on Iran still cannot be ruled out.

321gold.com

[Technocrat]

I read this fascinating article The Economist that really skewers the widely held conceit that the American economy is inherently stronger than the economy of 'Old' Europe. The article is interesting not only because it contradicts the widely held beliefs among American thinkers but also because it appeared as a lead story in a magazine dedicated to promoting laissez-faire capitalism. The article is available to subscribers only but here are some quotes:

The main reason for the dollar's strength has been the widespread belief that the American economy vastly outperformed the world's other rich-country economies in recent years. But the figures do not support the hype. Sure, America's GDP growth has been faster than Europe's, but that is mostly because its population has grown more quickly too. Dig deeper, and the difference shrinks. Official figures of productivity growth, which should in theory be an important factor driving currency movements, exaggerate America's lead. If the two are measured on a comparable basis, productivity growth over the past decade has been almost the same in the euro area as it has in America. Even more important, the latest figures suggest that, whereas productivity growth is now slowing in America, it is accelerating in the euro zone.

So, contrary to popular perceptions, America's economy has not significantly outperformed Europe's in recent years. And to achieve this not-much-better-than parity, America has had to pump itself full of steroids. Since 2000 its structural budget deficit (after adjusting for the impact of the economic cycle) has widened sharply, while American households' saving rate has plunged, causing the current-account deficit to swell. Over the same period, the euro-area economies saw no fiscal stimulus and household saving barely budged.

http://www.economist.com/opinion/displayst...y_id=E1_RPVPTSJ

Read the same article (my mommy buys me a subscription to The Economist every year... not kiddin for damn near a decade now (b-day present)... couldn't ask for anything better ) very very very interesting.

It does not look good for Canada though.... with are economy being so closely tied to theirs. Ahh well America is really all that special... it has just been really good at marketing itself... unfortunately the marketers got complacent and the government got more incompetent

Remember when the world sort of loved the USA?! Hell i do... so much for the big global USA love in.

[White Doors]

I read this fascinating article The Economist that really skewers the widely held conceit that the American economy is inherently stronger than the economy of 'Old' Europe. The article is interesting not only because it contradicts the widely held beliefs among American thinkers but also because it appeared as a lead story in a magazine dedicated to promoting laissez-faire capitalism. The article is available to subscribers only but here are some quotes:

The main reason for the dollar's strength has been the widespread belief that the American economy vastly outperformed the world's other rich-country economies in recent years. But the figures do not support the hype. Sure, America's GDP growth has been faster than Europe's, but that is mostly because its population has grown more quickly too. Dig deeper, and the difference shrinks. Official figures of productivity growth, which should in theory be an important factor driving currency movements, exaggerate America's lead. If the two are measured on a comparable basis, productivity growth over the past decade has been almost the same in the euro area as it has in America. Even more important, the latest figures suggest that, whereas productivity growth is now slowing in America, it is accelerating in the euro zone.

So, contrary to popular perceptions, America's economy has not significantly outperformed Europe's in recent years. And to achieve this not-much-better-than parity, America has had to pump itself full of steroids. Since 2000 its structural budget deficit (after adjusting for the impact of the economic cycle) has widened sharply, while American households' saving rate has plunged, causing the current-account deficit to swell. Over the same period, the euro-area economies saw no fiscal stimulus and household saving barely budged.

http://www.economist.com/opinion/displayst...y_id=E1_RPVPTSJ

Read the same article (my mommy buys me a subscription to The Economist every year... not kiddin for damn near a decade now (b-day present)... couldn't ask for anything better ) very very very interesting.

It does not look good for Canada though.... with are economy being so closely tied to theirs. Ahh well America is really all that special... it has just been really good at marketing itself... unfortunately the marketers got complacent and the government got more incompetent

Remember when the world sort of loved the USA?! Hell i do... so much for the big global USA love in.

Not sure what you are erading into this, btu to me it says that America is doing better than Europe just not to the degree as previously thought. If you see the collapse of America in there it is because you want to.

[PolyNewbie]

The USA is rapidly becomming a nation of servants, CEO's, lawyers and politicians. Soon everything useful will be produced in China using the natural resources of the USA & Canada.

[Led Boots]

The USA is rapidly becomming a nation of servants, CEO's, lawyers and politicians. Soon everything useful will be produced in China using the natural resources of the USA & Canada.

And Santa 's coming in a couple of weeks!