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(Click to enlarge.)American Economic Rebound
If the unemployment rate gets lower than 6%, there will be a chance for President Mr. Barack Obama gets reelected in 2012.
If it hangs around 7 to 8% or settles below 5%, Republicans will take the helm of the presidential election race for 2012.
Yet, China might start a counter-rocking turn, causing unexpected volatility in the global money market or even going bankrupt with a huge trade deficit, ironically.
PART I: Substantial Recovery of American Economy?
The financial state of American consumers looks getting improved.
http://econompicdata.blogspot.com/2011/02/something-sustainable.html
Rather, the above figure shows how terrible it was around 2009.
Yet, it has not fully recovered to the pre-Lehman shock era.
However, in order to realize this rebound, a huge amount of money infusion to the market and the public was needed from the central bank or FRB, like in the case of Europe.
http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009/07/27/
(It is notable that Japan was not hit hard by the Lehman Shock itself. But, it suffered a drastic decrease in export to the U.S. market in the wake of the 2008 Wall Street Crisis.)
Anyway, the present tranquility in the American and European financial state is supported by big money additionally released to the market and the public by the central banks and FRB. It is not an extension of steady growth of economy, mainly, through activities in the industrial sector. But, it is due to huge supply of money so as to fix problems on the books in financial institutions of America and Europe.
Yet, such extravagant money supply seems to have succeeded. The point at issue lies here. Huge money delivery from the central banks has not had a devastating impact on the whole economy and society in the U.S., Europe, and the world.
So, why? Or, a more decisive crisis is waiting in near future?
PART II: Unnecessary Development & Competition
First of all, the industrial and agricultural supply power mankind has has reached a level where every one can enjoy easy life.
Factories and plants in the U.S., Japan, Europe, and China can provide any necessary goods to world consumers.
Agricultural fields in the U.S., Australia, Canada, Brazil, and so on can provide enough foods for world consumers.
Without further development of technology and business competition, the world suppliers have capacity to provide enough goods for those needing them in the world market.
However, there are costs and expenses needed to produce them. Entities engaged in production need money. They sell their goods at certain prices. But, how do consumers get money to buy those goods with? Yes, consumers should be also engaged in production of goods to get wages. If this simple relationship is well balanced, there will not be any bubble and burst or catastrophe, if technological innovation and business competition are pursued within an allowable range.
There are more than six billion consumers in the world. Till each of them comes to enjoy a wealthy life like a rich American does, companies and businesses in the world can expand their operation. For this purpose, they need investments and funds. They have to cover costs of expansion and development of their production capacity. Basically, the global industrial and agricultural sectors need money. And, in turn, the money they acquire will be distributed among workers and consumers through payment of wages. This regime today still has huge room to accept big money.
In addition, indirect investment into the production capacity is actually done in the money market, such as the New York Stock Exchange. Multiplied transactions of the indirect investment money make their own sphere, further expanding the scope where money can move around.
In this way, the huge money supply by the central banks and FRB since the 2008 Financial Crisis has been absorbed in the market without bringing about catastrophe to the global economy.
So, it is natural that America calls for G20 immediately after the 2008 Financial Crisis to settle the matter globally, since G20 consists of most of global consumers and suppliers of goods.
It is not any heroic act of the U.S. It is not any super theory devised in FRB. It is just walking to saturation of the needs. It is a process toward all-out realization of American Dream all over the world. But, those who want to be rich, very rich, and super rich by sacrificing the poor and making the poor poorer will surely destroy this scenario. Their greedy will surely cause collapse in the great journey of mankind.
Accordingly, this future ominous possibility makes the recovery of the American economy look dull.
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Thousands of German businesses have been operating in Russia in these years.
That is a key to the recent recovery of the Russian economy.
But, 20,000 Japanese businesses have been operating in China in these years.
That is why China increased its GDP so rapidly and Japan continued its deflation era.
The U.S. is separated from Japan and Germany over big oceans. But, if China is situated where Canada is and Russia is where Mexico is, even the U.S. will suffer grave deflation, since cheap labor forces and cheap materials will flow into America in a larger quantity.
Yet, it must be better for Germany to help Russia and Japan to help China, in a global scope.
It is so, since it conforms to the teaching of Jesus Christ.
[News on Japan: Japan panel finds no link to vaccines, deaths: Report
http://www.canada.com/health/Japan+panel+finds+link+vaccines+deaths+Report/4401948/story.html]
Luk 3:10 And the people asked him, saying, What shall we do then?
Luk 3:11 He answereth and saith unto them, He that hath two coats, let him impart to him that hath none; and he that hath meat, let him do likewise.