Is the American economy going to crash?
Answer:
Here is what one writer says:
http://www.kitco.com/ind/wiegand/jun2820...
From our point of view, Mr. Venkatesh’s most important point is the United States has crossed the threshold; a line in the sand from which there is no escape. His example is “The basic structure of the American economy has a deficit of the U.S. Government at 4% of GDP and the household sector 6%, which are offset by a domestic savings of 3%, largely from corporates, leaving a substantial national deficit of (7%) to be covered by capital flows from the rest of the world. The current account deficit of the United States for 2006 is estimated to be in excess of $850 billion. This approximates 7% of GDP. Surely, even for the U.S, this in unsustainable.”
What makes you think that?
Hope not, it would seriously affect the world economy. Most economies are linked in some way to American economy.
Things are certainly going to get interesting when the boomers retire and we end up with more people collecting social security than paying in. The other consideration along these lines is that they will also be cashing in stocks, mutual funds, pensions. There is going to be considerably more money leaving the investment markets than entering.
Don;t even ask about the effects of China and India. Yikes!!
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