Lok Sang Ho

U.S. Hits Record Energy Efficiency

The financial tsunami is beginning to change commuting habits and forging a more energy efficient economy. But as Davewnmart says, much of the energy consumption and the pollution associated with American consumption has been offshored, to China in particular. We need to have an estimate of the energy efficiency for the goods consumed in America. Energy efficiency per $ of GDP produced is not very meaningful. GDP per capita tells us what we claim. A super-rich man sitting on prime land who reaps a lot of land rent claims high GDP. His lifestyle however may be extremely wasteful: huge mansions using up a lot of energy for heating and airconditioning; fancy yachts and private jets using up a lot of energy; etc.

Gas Is Cheaper Today than at Almost Any Other Point

Lower oil prices, lower mortgage financing costs, lower business inventories, more government hiring, firmer stock prices, a weaker dollar, all are lending support to the US economy. These are significant positive developments that WILL have positive impact on the economy.

Let's Just Say It: Print More Money

I agree with the spirit of your analysis. But how does money flow into the system? It goes into the system either as the private sector borrows from the banking sector and spends it, or as the government borrows from the Fed and spends it. If the private sector is not borrowing and the banks are not lending, the only way money can get into the circular flow is for the government to borrow and spend it, preferably on projects that are productive and beneficial over the long run. This is exactly what the government needs to do now. I advocated buying homes below the national median price from existing homeowners at the appraised market price as of some cut-off date to prevent housing prices from slipping further and damaging the economy, and I still think this is the best way to deal with the current crisis. I first made this proposal last October, and if the Federal Government had done as I said the US and the global economies would have been much stronger.

Let's Just Say It: Print More Money

I agree with the spirit of your analysis. But how does money flow into the system? It goes into the system either as the private sector borrows from the banking sector and spends it, or as the government borrows from the Fed and spends it. If the private sector is not borrowing and the banks are not lending, the only way money can get into the circular flow is for the government to borrow and spend it, preferably on projects that are productive and beneficial over the long run. This is exactly what the government needs to do now. I advocated buying homes below the national median price from existing homeowners at the appraised market price as of some cut-off date to prevent housing prices from slipping further and damaging the economy, and I still think this is the best way to deal with the current crisis. I first made this proposal last October, and if the Federal Government had done as I said the US and the global economies would have been much stronger.

Wall Street Breakfast: Must-Know News

The prognosis is quite positive in 2009 as the Fed and the Federal Government both adopt aggressive measures to contain the crisis. The approach adopted by the FDIC is yet another example of sealing further losses that I have commented on previously. This is working and will prevent the economy from an otherwise quite possible downward spin as portrayed by Roubini and others.

Has the Dollar Topped Out?

The US dollar is too strong. The yen is too strong. Today's Nikkei plunge is almost certainly due to the excessively strong yen. Free floating with capital flows that swing with a life of their own could be hazardous to the health of real economies. Wonder why the Bank of Japan and the Fed tolerate the unrealistically strong currencies. Certainly their weak economies and heavy debt load do not justify such strength. Japan's current account surplus had shrunk by a huge amount, and it is so export-dependent. The US already suffering from a plunge in consumption spending, certainly cannot afford to have exports undercut by a strong dollar. What are the central bankers up to?