A New Age Of Economic Prosperity.

Economics Episode 2

Today I will painting an economic picture much different from the one I outlined earlier, one of new hope and economic prosperity, one where a major break through will kick-start the economy and benefit the world. I think that the most likely kick-start will come from green technology. What makes me say this is that green technology already exists but it’s too expensive and too hard to manufacture for the masses. So in order for there to be a green technology boom green technology would have to be both cheap, so that the lower and middle class can buy it, and also easy to manufacture so that it can be cheap in the first place. If the U.S. could pioneer green technologies it would open up a world of possibilities, while some sectors of the economy would be hurt, mainly oil comes to mind, most sectors would stand to gain tremendously. Due to people wanting new green houses than it’s possible that the housing market could stabilize and maybe even start to gain back some of the ground it lost when the housing bubble popped.

With the housing market picking up people would have to start taking out more mortgages and as long as the banks give them out correctly the banks to could stand to gain as well. Car companies would get a major boost and depending on what type of green revolution this is so would battery makers. All this building and revolutionizing would result in unemployment being cut in half by 2020 and as long as the green revolution is sustained unemployment could be at record lows by 2025 to 2030. The tax revenue generated by this green boom could also help the US get back to normal debt levels by 2045. Another good thing that can come out of green technology is a clean environmental future, which can benefit not just the U.S. but also the entire world. But none of this will ever happen unless Obama invests in green technology today so that the US can pioneer green technology tomorrow. That’s one of the things I’ll be talking about next time when I discuss what the Obama administration can to do get us out of this economic slump. Until then this is Ian Mundy signing out.

A Rather Grim Scenario For The U.S. Economy In The Coming Years

Economy Episode 1

In the coming year to two years I think there is a very good chance we could see major inflation mainly due to the Feds printing too much money. In the coming six months I think that luxury items like computers, cars, phones and jewelry will continue to stay deflated as bad Christmas and black Friday numbers put a damper on the so called economic recovery. I predict commodities like wheat oil and almost all kinds of food to rise in price and become somewhat inflated. While that happens the fed will still be trying to prop up the economy with quantitative easing and other stimulus, which will result in more potential for inflation. The main question is when if we do get high inflation when will we get it? My guess is some in the coming two to three years possibly as soon as summer 2011.

 Another key question is what would cause the potential for inflation to turn into real inflation? If the scenario I outlined plays out I think the federal stimulus effort will work and the economy will rise and become healthily inflated again. But the Feds will get caught behind the times and continue to try and stimulate the economy. With all that money being printed up inflation is almost inevitable and as I said before would probably set in some time in the next two to three years with hyper inflation as soon as spring or summer 2012 I predict the housing market will bottom out some time in 2014 so we still have a long ways to go in that sector. Another question is how is the Fed going to react to this sudden rise in inflation? they will probably raise interest rates which will further deter investors from the market. In this scenario unemployment will flat line but when inflation sets in it will rise putting further blame on Obamas economic policy. It is my opinion that if the U.S. continues on its current path of major government Debt and economic instability the scenario I just outlined could be reality and might (under extreme circumstances result in the collapse of the dollar and economic woes far worse that a double dip recession.

Now it’s very possible that what I just said won't be the scenario that plays for the U.S. economy at all but the path we are currently on is unsustainable and if we want to jump start the economy in a big way we are going to need a big breakthrough which I will talk about next time. Until then this is Ian Mundy signing out.