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Thread: US economy downfall

  1. #41
    Senior Member KingKong's Avatar
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    Gold Market Manipulation and the Real Value of Gold?

  2. #42
    Senior Member Greenstar's Avatar
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    Re: US economy downfall

    Revelations of N.S.A. Spying Cost U.S. Tech Companies

    SAN FRANCISCO — Microsoft has lost customers, including the government of Brazil.

    IBM is spending more than a billion dollars to build data centers overseas to reassure foreign customers that their information is safe from prying eyes in the United States government.

    And tech companies abroad, from Europe to South America, say they are gaining customers that are shunning United States providers, suspicious because of the revelations by Edward J. Snowden that tied these providers to the National Security Agency’s vast surveillance program.

    Even as Washington grapples with the diplomatic and political fallout of Mr. Snowden’s leaks, the more urgent issue, companies and analysts say, is economic. Technology executives, including Mark Zuckerberg of Facebook, raised the issue when they went to the White House on Friday for a meeting with President Obama.

    It is impossible to see now the full economic ramifications of the spying disclosures — in part because most companies are locked in multiyear contracts — but the pieces are beginning to add up as businesses question the trustworthiness of American technology products.

    The confirmation hearing last week for the new N.S.A. chief, the video appearance of Mr. Snowden at a technology conference in Texas and the drip of new details about government spying have kept attention focused on an issue that many tech executives hoped would go away.

    Despite the tech companies’ assertions that they provide information on their customers only when required under law — and not knowingly through a back door — the perception that they enabled the spying program has lingered.

    “It’s clear to every single tech company that this is affecting their bottom line,” said Daniel Castro, a senior analyst at the Information Technology and Innovation Foundation, who predicted that the United States cloud computing industry could lose $35 billion by 2016.

    Forrester Research, a technology research firm, said the losses could be as high as $180 billion, or 25 percent of industry revenue, based on the size of the cloud computing, web hosting and outsourcing markets and the worst case for damages.

    The business effect of the disclosures about the N.S.A. is felt most in the daily conversations between tech companies with products to pitch and their wary customers. The topic of surveillance, which rarely came up before, is now “the new normal” in these conversations, as one tech company executive described it.

    “We’re hearing from customers, especially global enterprise customers, that they care more than ever about where their content is stored and how it is used and secured,” said John E. Frank, deputy general counsel at Microsoft, which has been publicizing that it allows customers to store their data in Microsoft data centers in certain countries.

    At the same time, Mr. Castro said, companies say they believe the federal government is only making a bad situation worse.

    “Most of the companies in this space are very frustrated because there hasn’t been any kind of response that’s made it so they can go back to their customers and say, ‘See, this is what’s different now, you can trust us again,’ ” he said.

    In some cases, that has meant forgoing potential revenue.

    Though it is hard to quantify missed opportunities, American businesses are being left off some requests for proposals from foreign customers that previously would have included them, said James Staten, a cloud computing analyst at Forrester who has read clients’ requests for proposals. There are German companies, Mr. Staten said, “explicitly not inviting certain American companies to join.”

    He added, “It’s like, ‘Well, the very best vendor to do this is IBM, and you didn’t invite them.’ ”

    The result has been a boon for foreign companies.

    Runbox, a Norwegian email service that markets itself as an alternative to American services like Gmail and says it does not comply with foreign court orders seeking personal information, reported a 34 percent annual increase in customers after news of the N.S.A. surveillance.

    Brazil and the European Union, which had used American undersea cables for intercontinental communication, last month decided to build their own cables between Brazil and Portugal, and gave the contract to Brazilian and Spanish companies. Brazil also announced plans to abandon Microsoft Outlook for its own email system that uses Brazilian data centers.

    Mark J. Barrenechea, chief executive of OpenText, Canada’s largest software company, said an anti-American attitude took root after the passage of the Patriot Act, the counterterrorism law passed after 9/11 that expanded the government’s surveillance powers.

    But “the volume of the discussion has risen significantly post-Snowden,” he said. For instance, after the N.S.A. surveillance was revealed, one of OpenText’s clients, a global steel manufacturer based in Britain, demanded that its data not cross United States borders.

    “Issues like privacy are more important than finding the cheapest price,” said Matthias Kunisch, a German software executive who spurned United States cloud computing providers for Deutsche Telekom. “Because of Snowden, our customers have the perception that American companies have connections to the N.S.A.”

    Security analysts say that ultimately the fallout from Mr. Snowden’s revelations could mimic what happened to Huawei, the Chinese technology and telecommunications company, which was forced to abandon major acquisitions and contracts when American lawmakers claimed that the company’s products contained a backdoor for the People’s Liberation Army of China — even though this claim was never definitively verified.

    Silicon Valley companies have complained to government officials that federal actions are hurting American technology businesses. But companies fall silent when it comes to specifics about economic harm, whether to avoid frightening shareholders or because it is too early to produce concrete evidence.

    “The companies need to keep the priority on the government to do something about it, but they don’t have the evidence to go to the government and say billions of dollars are not coming to this country,” Mr. Staten said.

    Some American companies say the business hit has been minor at most.

    John T. Chambers, the chief executive of Cisco Systems, said in an interview that the N.S.A. disclosures had not affected Cisco’s sales “in a major way.” Although deals in Europe and Asia have been slower to close, he said, they are still being completed — an experience echoed by several other computing companies.

    Still, the business blowback can be felt in other ways than lost customers.

    Security analysts say tech companies have collectively spent millions and possibly billions of dollars adding state-of-the-art encryption features to consumer services, like Google search and Microsoft Outlook, and to the cables that link data centers at Google, Yahoo and other companies.

    IBM said in January that it would spend $1.2 billion to build 15 new data centers, including in London, Hong Kong and Sydney, Australia, to lure foreign customers that are sensitive about the location of their data. announced similar plans this month.

    Germany and Brazil, where it was revealed that the N.S.A. spied on government leaders, have been particularly adversarial toward American companies and the government. Lawmakers, including in Germany, are considering legislation that would make it costly or even technically impossible for American tech companies to operate inside their borders.

    Yet some government officials say laws like this could have a motive other than protecting privacy. Shutting out American companies “means more business for local companies,” Richard A. Clarke, a former White House counterterrorism adviser, said last month.

  3. #43
    Senior Member ManojKumar's Avatar
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    Re: US economy downfall

    derelict detroit

    The cost of policing the world (self appointed police officers)
    The cost of Iraq and Afghanistan
    The cost of superpower.

  4. #44
    Senior Member Mazea's Avatar
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    Dollar sinks deeper after poor US data

    TOKYO: The dollar drifted lower in Asia on Monday as a string of disappointing US data last week put pressure on the currency.

    The greenback sank to 101.30 yen in afternoon Tokyo trade from 101.45 yen in New York Friday afternoon.

    The US unit briefly fell to 101.23 yen in earlier trade, its lowest since late May.

    The euro fetched $1.3643 and 138.24 yen against $1.3646 and 138.45 yen in US trade.

    Market reaction was muted after Japanese data showed factory output rose a smaller-than-expected 0.5 percent in May from a month earlier after a 2.8 percent fall in April.

    The dollar's downturn came as US Treasury yields fell.

    "US interest rates continue to languish on the back of consistent buying of Treasurys, which is keeping the dollar down," Hiroyuki Fukunaga, chief executive at Investrust, told Dow Jones Newswires.

    Dreary data on the US economy prompted market players to flee to Treasurys as they sought safe investments but expectations are that the Federal Reserve will keep ultra-low interest rates well into 2015.

    On Thursday US consumer spending data for May showed a mere 0.2 percent increase from April, but adjusted for inflation, spending actually fell 0.1 percent.

    News of the weakness in consumer spending, the main driver of the US economy, came a day after the government slashed its first-quarter gross domestic product estimate to a 2.9 percent contraction.

    Investors are now waiting for the release of manufacturing data Tuesday, the European Central Bank's monetary policy meeting Thursday and US jobs data on Friday.

    "We expect the ECB to leave rates unchanged" at the upcoming meeting, Credit Agricole said in a note. The bank cut rates in June in a bid to fend off deflation as price rises remain minimal in the eurozone.

    The dollar was mostly lower against other Asia-Pacific currencies.

    It dipped to Tw$29.86 Monday from Tw$29.88 Friday, to 43.62 Philippines pesos from 43.79 pesos and to 1,012.17 South Korean won from 1,013.75 won.

    It also declined to 60.04 Indian rupees from 60.14 rupees, to 32.45 Thai baht from 32.47 baht, to 11,942.50 Indonesian rupiah from 12,103.00 rupiah. But it rose to Sg$1.2490 from Sg$1.2486.

    The Australian dollar slipped to 94.22 US cents from 94.37 cents, while the Chinese yuan traded at 16.33 yen against 16.28 yen.

  5. #45
    Banned alihamza's Avatar
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    Re: US economy downfall


    What do you think of Austrian economics, and Peter Schiff's predictions?

    Found this really interview with him:

    Peter Schiff: US Economy ‘Screwed Up,’ Stock Market a ‘Bubble’ (+Video)

    Epoch Times: Mr. Schiff, what’s your view on the U.S. economy at this moment?
    Peter Schiff: I think it’s a disaster. Very few people perceive just how big a disaster it is. Most people think the U.S. economy is recovering, maybe a bit more sluggish than they would like. People talk about a jobless recovery. But the reality is it’s not a recovery at all. We are not recovering from anything. The country is getting sicker.

    The U.S. economy is really all screwed up. It’s the result of mainly monetary policy, but fiscal and regulatory policies are part of the problem. I think the major part of the problem is the central bank. The central bank is basically trying to accommodate bad fiscal policy, bad regulatory policy. They are trying to provide a stimulus to the economy to negate the sedative that is being applied by the government. But it’s actually making the problem worse.

    Epoch Times: So what’s the problem?
    Mr. Schiff: One of the problems we have in America is that interest rates are too low. We don’t save enough, we spend too much, we borrow too much, we don’t produce enough. So we have these huge external imbalances where we borrow from the rest of the world. We have to import goods, because we don’t invest in productivity.

    We are not producing the goods. But all this is done to try to maintain the illusion of health, so Americans can keep on spending. So politicians can actually pretend the economy is getting better. But all we are doing is actually covering up the symptoms. Beneath the surface, the economy is actually deteriorating. Eventually it’s going to collapse.

    Epoch Times: Why?
    Mr. Schiff: There is a limit to how much artificial stimulus we can have. There is a limit to how much money the world is willing to lend. Because once they are coming to terms with the fact that we are never going to pay the money back, they are not going to want to send us their savings and send us their production if we can’t pay for it.

    But we got this phony bubble economy that gets bigger and bigger. People focus on the stock market. They say, “Well the stock market is going up that must mean the economy is getting better.” No it doesn’t. There is just a lot of cash, a lot of inflation created by the central banks. So they are able to inflate a bubble in stocks or in real estate, but they are not able to generate legitimate economic growth.

    Epoch Times: So that’s why people feel different about the recovery?
    Mr. Schiff: It doesn’t feel like an economic recovery to the average American, because it’s not. We are not getting the type of prosperity that would come from real economic growth; we are just getting a bubble.

    And when people are speculating in the stock market, it doesn’t create real wealth. On paper for some. But we are not building factories, we are not producing more consumer goods, we are not creating good jobs, we are just inflating a bubble. And we are delaying the day of reckoning, which is relatively close at this point.

    Epoch Times: What does the day of reckoning look like?
    Mr. Schiff: Right now we are consuming what other people produce. So somebody has to do the production. The question is: Why is the world so willing to let America enjoy the fruits of their labor? When are the people producing those goods going to want to consume the goods themselves?

    Now right now, they are content to accept our IOUs [debt], because they figure “well we are going to spend them in the future.” They think they are building their future; they are saving dollars that they can spend in the future. Of course they don’t realize that the dollar is not going to have much value in the future, so there will be almost nothing to buy.

    But I also think that most of these developing economies are under the false impression that their economic growth, the success of it, lies in their ability to export—it doesn’t. The key is production.

    And people forget that nations don’t export just to export. They don’t export to create jobs. You export to pay for your imports. And if you are not importing anything, then there is no reason to export. Because what people want are consumer goods.

    So you either produce them yourself or you trade for them. But to send your consumer goods out and have nothing in return, except Treasury bonds, our trading partners aren’t benefiting. We are benefiting because we get to consume things; we did not produce anything to pay for it.

    Epoch Times: That can’t go on forever right?
    Mr. Schiff: When the world figures out that we conned them and they are holding a bunch of worthless IOUs, they are going to stop exporting. It doesn’t mean that they are going to stop producing goods. It just means that their own citizens will consume them. Which will be better for them, but that’s when the party ends in the U.S. Because without the world to supply us with the goods that we don’t produce, there is almost nothing to buy.

    If there is almost nothing to buy, it doesn’t matter how much money consumers will spend. There is nothing there, it’s just inflation. All our policies are about putting money in the pockets of consumers. But money doesn’t do you any good if there is almost nothing to buy. And where is this stuff coming from? It’s coming from the productive efforts of people outside of America.

  6. #46
    Think Tank 1Badmaash's Avatar
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    Re: US economy downfall

    Schiff is right that the economy is getting sicker and there's no "recovery" (except in the bullsh!t of Obama and the US mass media). He is wrong about the causes. Monetary policy is not the culprit -- it's just a means to camouflage weakness. The weakness is coming from elsewhere -- from things that Schiff does not understand and which are not part of his worldview. US economic weakness is because US industrial strength is no longer there. US industrial strength is not there because 1) oil prices are high (around $113 a barrel, compared to $20 a barrel twelve years back), 2) prices of all commodities are up in a resource-constrained world, and 3) global competition for the markets that are out there is ferocious; US multinationals can compete only by outsourcing production.

    The alternative is a national capitalism with high tariff walls (which existed for much of USA's history). But then Americans would have to reconcile themselves to a much lower standard of living and the fortunes of the billionaires and multimillionaires would mostly vanish into thin air. Right now the USA is living in a world of make-believe. How long this can continue, I'm not sure. The slowly growing lack of acceptance of the fist dollar in the rest of the world will probably be the thing that causes this make-believe world to implode. It's important to point that even this make-believe world is not a comfortable place for many Americans -- 46m are on food stamps and real unemployment is probably around 23%.
    The Following User Says Thank You to 1Badmaash For This Useful Post: bilalhaider

    Last edited by 1Badmaash; 3rd July 2014 at 12:35.

  7. #47
    Banned alihamza's Avatar
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    Re: US economy downfall

    Quote Originally Posted by 1Badmaash View Post
    Schiff is right that the economy is getting sicker and there's no "recovery" (except in the bullsh!t of Obama and the US mass media). He is wrong about the causes. Monetary policy is not the culprit -- it's just a means to camouflage weakness. The weakness is coming from elsewhere -- from things that Schiff does not understand and which are not part of his worldview. US economic weakness is because US industrial strength is no longer there. US industrial strength is not there because 1) oil prices are high (around $113 a barrel, compared to $20 a barrel twelve years back), 2) prices of all commodities are up in a resource-constrained world, and 3) global competition for the markets that are out there is ferocious; US multinationals can compete only by outsourcing production.
    Well, that is the criticism of Austrian economists: they do not appear to be "technically sound" when it comes to economics, or economic theories. But no one can doubt that Schiff did a better job predicting the real estate crisis than the Keynesian economists like Bernanke or Paul Krugman:

    Do you believe quantitative easing works?

  8. #48
    Think Tank 1Badmaash's Avatar
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    Re: US economy downfall

    The #1 priority for Americans should be to learn how to be poor. This means getting by without a car, without a suburban house, without flying on jets, without vacations that involve travel, with little or no dependence on a job working for a large organisation. As both Greer and Orlov point out, the US standard of living is going to implode -- the wherewithal to sustain it won't be there. We're only in the early stages yet.

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