Is America heading for recession: What do the tea leaves say?

Answer 1

I don't know what the tea leaves say, but I can offer you some facts. A number of factors might lead an economist to anticipate that America is heading towards a recession. These include:

1. Recent stock market falls
2. Very low value of the dollar
3. Decline in manufacturing
4. Extremely high level of spending on foreign policy
5. Massive budget shortfalls
6. Very high level of governmental borrowing, especially from China
7. Rapidly widening poverty gap
8. Balance of trade completely out of kilter

Seeing as all these indicators have become worse during Bush's tenure as a direct result of his policies, and he will be in office until 2008, a recession is certainly a plausible consequence. But it will probably bite just as Bush leaves office, allowing Republicans to blame the Democrats for the next eight years.

Answer 2

Old money and foreign monies need a profit. So raise the prime to prevent lowering of debt by increasing the service costs. Really get ahead and and expect a change in administration to lower the debt, so spin the unemployment rate and raise the prime some more, just for the joy of it.

Tea leaves say "Turn up volume, sit on helmet".

Answer 3

Yes they are.

The US dollar is tied to oil rather than the gold standard. The repercussions of this were first seen when a certain Mr Hussein switched from trading his oil in dollars to trading in Euros in 2000. At first the US laughed because €1 only bought $0.8 dollars. But then the bite began to strengthen as the Euro value gradually increased. Today €1 buys $1.3.

Now the US in keeping the oil trade in dollars essentially gets something for nothing on the internationals markets. They can import goods for next to nothing because everyone needs dollars to buy oil. Dollars are printed very cheaply and used to buy goods which are expensive. This is why the US runs a 48% trade deficit.

Secondly the value of the dollar is kept reasonably high and stable because every other country in the world uses the dollar as its reserve currency (to buy oil). That means that there are more dollars existing outside the US than within the US.

So back to Saddam. He was offering oil in Euros. The dollar was trading well against the Euro but then what happened. Countries started to swap their dollars for Euros because they could also buy oil in Euros. The dollar value suddenly began to decline. Bush had to stop this. After all his country was already laboured with an $8.7 trillion national debt. So he went to war and ousted Saddam and immediately ensured a return to the petro dollar.

Iran, however, have switched to trading in Euros. Notice the pressure suddenly being upped on Iran. Venezuela are considering this! Notice the pressure on them. Russia are also conducting some of their oil business in Euros and OPEC are actively discussing whether to switch to the Euro for all oil trading. This will happen. The Euro is viewed as a more stable currency and as the Euro zone grows it will become even stronger.

So when this all falls into place the dollar will become worthless. Everyone will cash in their dollars, a bit like the world calling in a huge bank loan on America. The US will spiral into a recession worse than the 30's and Conservatives will spend their time blaming Liberals for this when it was actually the Republican government that switched to an oil standard way back in the 70's.

So now you know why Iraq was invaded, Iran will be invaded and why pressure is mounting on Chavez and Russia.

Answer 4

right now with the stock market and international markets it's really hard to tell. Becouse the markets are in a correction which some say is long over due. But some investors are still jittery.

Answer 5

with liberals in charge...ABSOLUTELY...youd be absolutley amazed how many pelosi...ites think confiscatory tax rates will bring us out of deficit spending and ms. pelosi actually has a plan on the table that she feels will provide BILLIONS (her words) of dollars for farm relief by taking of new invesment energy credit for oil companies drilling in the us.
I also had one of my questions answered recently where one of the left wing extremists actually thought the clinton largest tax increase in us history was responsible for two surplus budgets(forgetting the reagan tax cuts of course). Liberals need to wake up soon, or god help us all.

Answer 6

Absolutely nothing, save this person had a cup of tea.