tag:blogger.com,1999:blog-1527766217650773141.post2764253442172099122..comments2023-07-12T06:12:30.772-07:00Comments on Demand Side Transcript: Michael Hudson on the State of the Union - Part IIAlanhttp://www.blogger.com/profile/07323700324276425194noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1527766217650773141.post-9481110563223644432010-01-31T17:50:16.548-08:002010-01-31T17:50:16.548-08:00I agree completely with DL here. Though the carry...I agree completely with DL here. Though the carry trade may be more along toward its middle than near the beginning and the risks that it will unwind without warning are more than a little troubling.Alanhttps://www.blogger.com/profile/07323700324276425194noreply@blogger.comtag:blogger.com,1999:blog-1527766217650773141.post-35385308311087942412010-01-31T01:38:30.772-08:002010-01-31T01:38:30.772-08:00The recent GDP figures were primarily because of r...The recent GDP figures were primarily because of rebuilding of stocks, but that will not continue indefinitely. Businesses, if they are being sensible will maintain lower stock levels just in case. The average consumer is still deeply in debt and as you said has little capacity to spend when their incomes are falling and credit lines are being cut. The sensible ones are paying down any existing debt. <br /><br />I am glad to see that you see the risks of lower capital gains taxes. It lowered the tax burden on the financial sector and effectively increased it on the real economy. What is needed is a cap on domestic FIRE sector. As you say the are a drain on the rest of the economy, either through higher rents, charges or fees. <br /><br />The fact that the US carry trade has now started is a sign that the US economy is in serious trouble. This will increase inflation in the US as it depresses the value of the dollar, which while making the manufacturing economy more completive is insufficient to boost the rest of the economy. It also shows the lack of investment opportunities in the US. <br /><br />Bush ran with huge deficits for his entire term and failed to get the economy to create jobs, or have any wage growth either. That does end the deficits are inflationary theory. Yet the media failed to criticise this deficit.David Lazarusnoreply@blogger.com