Thursday, May 1, 2008

Is it a recession or not?

Bush says "No, it's slow growth."

I say, if you look at what is happening with the figures, the overall gdp that measures what the economy is doing, you get a .06% growth rate. Yes, very slow growth.

But, if you look behind the numbers, you will see that those numbers are buoyed by one factor. The dollar is so low that exports are increasing. People overseas can buy American goods on the cheap and they are beginning too.

Thats a silver lining to the economy.

But, are you in the export business?

At the moment, me neither. So, what are the other numbers?

If the GDP is boosted by exports and what we see as a slow growth economy includes the figures from increased exports, then the economy at home, must be way down.

So, we are in a recession at home, but there is a little more money coming from outside. Basically, we are not pouring our money like a flood to the outside world as fast as we were before. Though we are still in a trade deficit with the outside world that is staggering.

Recession = yes. Unless you are an exporter taking advantage of a demolished dollar.

In a year the dollars the exporters earn at home could cycle back into the economy and be spent on other things and effect other businesses, but, well that would be a year in recession for most.

Bejamin Feinblum

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