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Titan International Inc. Message Board

  • jimturner54321 jimturner54321 Dec 20, 2004 12:39 PM Flag

    "Getting So Much Better " (part 1)

    "Getting So Much Better All The Time"
    The Sovereign Strategist Update:
    "Into the final stretch of the year and neck-deep into the most important shopping season of the year, the economic folks are starting to worry. Retailers aren�t reporting much in the way of good news and even Walmart is complaining. I say if you can�t sell bucket loads of cheap imported garbage to folks whose sole pastime is buying bucket loads of cheap imported garbage, it�s time to worry.

    I don�t worry, but for those who do, consider that we�re now into the fourth year of this so-called expansion. We�re past the peak and about a year and a third from the end, based on the average length of past expansions. Did you notice the peak as it went by? Not the kind of stuff to write home about and statistically, it�s supposed to only get worse from here.

    This all fits in quite nicely with our prognostications several years ago that the U.S. economy was likely to embark upon a sustained period of sub-optimal growth, neither here nor there, not terribly ugly but not likely the stuff of inspiration for poets and songwriters either. Others have called it "muddling through" and that seems to be about what it is.

    Still no terribly strong economic data and not much cause for merriment on the jobs front. We get a bit of good data one month followed by a contradictory report the following month. What is this sort of tepid activity laying the groundwork for? Probably more of the same. Hence the "muddling through."

    Obviously the consumer isn�t dead yet. But he�s also not laying the foundation for a big boost in spending anytime soon. Uncle Al has seen to it, via ridiculously low interest rates, that the economy never got too bad and no one was forced to rein in much of anything, least of all spending. Hence the abysmally low U.S. savings rate of 0.2%. And hence the lack of resources with which to sustain an expansion.

    Some might call the economic stimulation a good thing and when viewed from the perspective of today�s "instant gratification society", perhaps it was. But avoiding economic pain now by stripping away wealth and replacing it with IOUs is not the recipe for long-term economic success.

    We all got away with a mild recession. Our children are not likely to have it quite so good as Greenspan�s economic chickens will inevitably come home to roost someday. Those chickens will be coming back from overseas, by the way, each holding a foreign claim on U.S. assets in their beaks, as more than half of our debt is now owned by foreigners.

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