Economy Up-Tick

chisueMay 4, 2013

I think I have a handle on the economy. Before the Recession, our street hummed to the tires of the UPS and other delivery services. After the housing bust...silence. I am seeing the trucks more frequently again. I trust this more than the speculation on Wall St.

UPS has stopped at our door twice recently, and will be back again soon. DH got some soft kid loafers. Our Westie got three cases of his special-diet canned dog food.

I've ordered 15 tins of Twinings loose teas: Earl Grey, Lady Grey, Darjeeling and Prince of Wales. (We have a pot of tea most afternoons.) Twinings has a Mothers' Day special with 20% off. My discount more than covered my shipping cost.

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jannie

I've seen the UPS truck on my block three times this week, once was for a vacuum cleaner I ordered from Kmart online. So handy to be able to shop online and get things delivered within days.

    Bookmark   May 4, 2013 at 11:21AM
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joyfulguy

We're just postponing the inevitable.

When an individual goes deep in debt ... s/he either has to pay up ... or go bankrupt. Eventually.

The U.S. used to be a great a great manufacturing nation. Much of the manufacturing has been "offshore"d ... and now we're bringing in temporary workers from abroad ... with one of the results being our own workers will be less demanding of wages, plus benefits ... pensions ... and working conditions.

Many haven't had a wage increase in several years ... but the prices of (most?) things has risen.

The U.S. used to be a big creditor nation ... but too high spending, including military adventures, has produced major debts. Now it's a major debtor nation.

The U.S. used to develop large numbers of patents, resulting in royalty payments coming in from various parts of the world, and their percentage of that total has been reducing ... and a number of entities in the world are copying their patents without paying royalties, in recent years.

Governments have a privilege that individuals lack ... they can print money. Which the U.S. ((consortium of banks that own the?)) Federal Reserve has been doing ... hand over fist.

Now, a number of entities that used to buy U.S. bonds have been cutting back on it, fearing that they'll be repaid in heavily devaluated Dollars ... or a specified number of ounces of gold, which tends to hold its value in inflationary times.

It used to be that worldwide purchasers of, e.g. oil, had to buy U.S. Dollars, the world reserve currency, as the British Pound, or Swiss Francs were, to do it, but in recent years a number of nations have been paying for oil directly, and there's a strong movement afoot to find other means of paying while conducting international business.

The days of the U.S. Dollar being the world's reserve currency are numbered ... and U.S. people are in for a shock when they travel abroad, offering U.S. currency ...

... to have it spurned.

ole joyful

    Bookmark   May 4, 2013 at 12:43PM
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dedtired

I think my neighbor gets a UPS delivery every day. She is a single mom with three kids and a full time job, so I guess there is little time to shop in stores. She must have a lot of stuff in that house because there is a lot going in there.

Interesting correlation between the economy improving and the frequency of the UPS truck!

    Bookmark   May 4, 2013 at 1:10PM
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fran1523

Believe it or not there is a manufacturing uptick in the U.S. However this does not mean increased employment because newer factories are so technologically sophisticated that fewer employees can do much more work. They also are very highly trained.

    Bookmark   May 5, 2013 at 9:13AM
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yayagal

Well said joyfulguy.

    Bookmark   May 5, 2013 at 11:27AM
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drewsmaga

Thank you, Ed, for educating us!

    Bookmark   May 6, 2013 at 12:57AM
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jemdandy

Interesting idea, counting the no. of deliveries.

I use a different metric, but is based on the same idea. I live only a block away from an east-west railway. It carries only frieght traffic. I note that when the economy perks up, the number of trains per day also increases. Its not so much the number of trains, but the number of rail cars that count.

    Bookmark   May 6, 2013 at 1:23AM
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jmc01

"Now, a number of entities that used to buy U.S. bonds have been cutting back on it, fearing that they'll be repaid in heavily devaluated Dollars ... or a specified number of ounces of gold, which tends to hold its value in inflationary times."

Who is cutting back?

    Bookmark   May 6, 2013 at 6:18AM
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chisue

Ed -- So...you're saying people abroad would prefer a Euro over a US Dollar?

I think of Gold as a speculator's game. It's certainly illiquid.

    Bookmark   May 6, 2013 at 9:44AM
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joyfulguy

China.

Using previously-bought U.S. bonds (that their gov't. got a major chunk of when we were buying so much more consumer stuff that they made than they were of stuff that we made) ... to buy gold.

We used to be "Citizens" ...

... then, for a number of years, it was "Consumers" - remember how the Bush encouraged us, in his speech just after 9 - 11 to go out and buy stuff, to not let them get us all constipated, as far as buying stuff was concerned ...

... and recently it seems to have become "taxpayers"!

It seems to me wise of those of us in our two countries to buy some stocks of corporations with a base in different currencies, especially the less risky ones.

In a time when there are fewer long-term jobs/careers, and the ones that are available offer fewer wage increases and benefits, plus guaranteed pensions having become far fewer on the horizon, instead of using most of our income to put into consumer stuff, we should be moving an increased portion of it/tem into assets that will earn for us as long as we have them, and provide income in our later years (especially if we get stuck with a permanent layoff earlier than we'd anticipated) so that we don't have to chew our fingernails, wondering how we'll cover all of the essential expenses.

Don't want to be either a street person or have to go back to work at about 80, thanks (and thankful that I'm not in such a bind)!

ole joyfuelled ... with a bit o' help from some saved/invested dollars (in addition to the pensions - on which I've been able to live, thus far)

P.S. Plus, on actual income of about 50K (we have to puff our taxable amount up some) had more federal credits than needed last year to reduce income tax to zero ... and provincial (including the Health Levy that's hard to avoid) to under $100. I don't have real objection to the Health Levy, as most of our health costs are covered.

I have some moral compunctions about it ... but figure that the charities make good use of the dollars, perhaps more so than the govts. would (less sure of the political contribution results).

While some express surprise about the size of the contributions of some of us who practise such ...

... our real cost is the difference in amount that it would have cost us had we given little to charity/political and paid the substantial taxes that would have resulted.

o j

    Bookmark   May 6, 2013 at 5:42PM
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rosemaryt

The economy is a sick puppy, currently being propped up by unsustainable levels of debt. One out of five American families are on relief/welfare/the dole, whatever you want to call it.

That doesn't even take into account the hemorrhaging from Medicare and Medicaid and other government programs.

America is like the family that lost its job 18 months ago but is maxing out the credit cards and lines of credit to keep up appearances.

This is not sustainable.

If nothing else, China is going to stop lending us money at some point.

    Bookmark   May 6, 2013 at 6:26PM
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jmc01

according to the US Treasury, China's holdings of US Debt have pretty steaily increased. yes, their gold holdings have increased, but how much of that is due to the fact that citizens are no longer prohibitd from holding gold?

    Bookmark   May 6, 2013 at 10:23PM
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chisue

Ed, I like your progression chart of political terminology: Citizen to Consumer to Taxpayer. Right now the NRA is trumpeting Patriot. LOL

I'm not saying the increased number of UPS trucks on my street means more consumer spending is a GOOD thing, but I think it is an accurate guide to trends -- along with jemdandy's freight car count.

Auto companies are having a great year. That may continue if the average car on the road here is 11 years old. *Somebody* is employed -- or bartering with unreported income.

    Bookmark   May 7, 2013 at 12:22PM
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Cynic

You missed an important thing Joy(3/4)ful! "Governments have a privilege that individuals lack ... they can print money."
While technically accurate, in reality many to most individuals can effectively "print" money. Produce it anyway. It's called credit. Credit cards, "Ready Reserve", mortgages, loans, etc. And most use it very much like the government. Buying things they can't afford and don't need but because of the need to fight their own "cold war" (keeping up with the Jones') or having to have the latest iPhone, the newest SUV or Crossover even though they never leave a paved road or see a snowflake. And of course have to take the annual vacation, go out to eat and more. And when the loan can't be paid, credit card is maxed out, just produce more. Get a second mortgage or get another credit card! Our grandparents to great-grandparents must be spinning in their graves over the priorities our generations are showing. It's out and out shameful to see a small family with $100k+ income living paycheck to paycheck these ways. (And yes, it's their choice but irresponsible nonetheless.) And how is a government going to deal with a constituency who is this irresponsible?

it's interesting the delivery truck and freight car thoughts. Along the same lines if one watches a "letter carrier" now going back to carrying packages, it's also interesting. However, people still insist on their toys so the deliveries are going to keep coming. What I find refreshing is the stock market well over doubled what it was 5 years or so ago. Also seeing the housing market turning around. It was on the news recently that it's now become a sellers' market again in real estate and watching some housing prices where I would like to move supports this. Foreclosures are down. Traffic jams are up. Does this mean more people driving to work? And/or more people driving to go spend money? More semis on the road too. A friend was coaxed out of retirement because they needed truck drivers. Not definitive of course, but just (as Rod Serling used to say) "submitted for your approval..."

Chisue, the "Patriot" comment is priceless! And so accurate!

    Bookmark   May 9, 2013 at 12:35AM
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chisue

Cook County, Illinois is seeing MORE foreclosures every quarter. Here, the courts have to be involved in the process, so there is a backlog. It's been a 'ghostly presence' for over a year while these properties waited in the wings. It's one reason this RE market has not recovered as it has in other former RE boom areas -- where the foreclosures have already washed through. When the Chicago area is clear of these, it will probably begin the same scary trip to boom-land that some of the rest of the country is entering already. Hold on to your (tinfoil?) hats!

Does anyone know what percentage of the US economy is believed to be unreported, untaxed income -- sometimes barter?

    Bookmark   May 9, 2013 at 11:30AM
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joyfulguy

Somewhat sorry to have produced such a heavy rainstorm to throw cold water on your parade, chisue.

o j

    Bookmark   May 9, 2013 at 3:18PM
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