perceptions_now

Scary Drop in Velocity of Money: Is Deflation Knocking?

1) "I would add that 78 million boomers and 37 million retirees just saw their retirement nest eggs hit. Some were in home equity and others in stocks that got hammered."

2) "Given that between the two, that is over 1/3 of our population, it is a huge paradigm shift in consumer thinking."

3) "Smaller homes, fewer discretionary items, more fear at investing in a rally, etc. This will be with us for years"

4) "While we could have a major additional down leg in the market, it would probably need a loss of faith in the global recovery." ========================
Jan,
1) Other age groups will have more time to re-group. But, this group will have insufficient time or NO time to recover the hit they have taken!

2) Yes, this a paradigm shift. There are those who say this is NO different to other economic slowdowns, but that disregards the facts. The US economy is in the process of lossing 2 of its 3 driving forces (of the last 200 years). With Oil & Population factors already in the process of Peaking, Innovation is now the last new frontier.

3) Falling Housing prices & lower Consumer demand are principal causes of this slowdown, or are they merely symptoms? I suggest that a rapidly aging population and a steadily reducing total population GROWTH RATE, may provide many of the basic cause behind many of the symptoms. Then, throw Oil, which Peaked around 2005 and there is a economic double whammy, of once in history proportions!

4) as you correctly point out, even though the US is still the pre-dominant Global economic force, if the rest of the world picked up, then all would be well.
That said, there are two major problems!
First, the US GDP is as big as the next 3 countries GDP combined, which means there is NO de-coupling likely, at this time.
Second, the rest of the developed world and including the BRIC countries, have the same major problems, Population Aging, slowing total population growth rates & Peak Oil!

So, leaving aside the spin of self-interested party's, THE QUESTION is, "WHAT IS THE CIRCUIT BREAKER THAT WILL RE-START ECONOMIC GROWTH?