patrick.net

Eliza says

Oh, and it would be really great if our students could graduate from university without crushing debt. College debt can lead people do do what pays well rather than what they love or what they are good at. Usually, interest in what you are doing results in better work. I’d like to see a change such that people who love kids can afford to go to college and then work as elementary school teachers, as opposed to taking a better paying job doing something they don’t care about at all. Etc, for every other underpaid profession. It would do wonders for the economy.

Start by reducing the ridiculous expectations that students have when coming to school now. I hope I don't sound like too much of a crotchety old fart here, but when I went to college WAY back in the 80's the dorms I was stuck in were shared rooms with 2-4 people in bunks, and only steam heating. If it got hot you stuck a fan in the window. We had no cable TV and no ethernet and only a shared kitchen and bathroom PER FLOOR. Now when I look at dorm "suites" with private rooms per student and a kitchen and cable and internet I see where a lot of the money is going. Some of the dorms here at UCD actually have POOLS in the middle of the group of buildings. I helped with "Student Move-in Weekend" and was surprised how many times I was asked to help some freshman set up their TiVo or other gadget. It's ridiculous to me how many colleges seem to have turned themselves into playgrounds. They do this because the students WANT it of course and because Mom & Dad will do whatever little Suzie or Sam wants.

masayako says

So, where you think the smart money should go?
michaelsch says

So, you think my explanation 2. is correct, but it’s still crazy. Consider this today’s report:
Consumer credit fell by $12B in August instead of the forecast of $10B.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aO13jMuWf0M4)
Yet, MasterCard rose today by 5.13%, VISA by 3.81%.
And again number of private bankruptcies rise daily.
This is insane.

I don't know. In fact, I need to decide on the strategy about my own savings.
That's why I ask these questions.
If we expect very high inflation it's probably the best to buy some commodities. May be silver.
If we are still in deflationary phase - fixed income investments.
If we believe in the sustainable long term recovery within a couple of years - stocks.

Vicente says

Do weapons count in our exports? I do not know.
I did find that nearly 15% of our export is simple commodities: cotton, corn, soybeans, etc. According to Wikipedia the leading export is “electrical machinery” but I’m not sure what that constitutes. I envision big machine tools, generators and transfomers but don’t actually know.

Sure, they do.

Here is an example of these exports, note no Japan on the list:

http://en.wikipedia.org/wiki/Arms_industry#World.27s_largest_arms_exporters

Michaelsch,

I assume there is some Federal agency report somewhere which shows all our exports and how it breaks down but haven't found a good document yet.

Just look at the way they report our trade deficit:
Here, for example:
http://news.bbc.co.uk/2/hi/business/8299682.stm
"Weak dollar improves US trade gap
Exports rose slightly on the back of the weak dollar while imports fell.
The dollar has slipped recently, with traders moving into other currencies as the global economy begins to recover.
Imports in August totalled $158.9bn, compared with $159.8bn in July. Exports totalled $128.2bn, compared with $128bn in July.
The slight fall in imports reflects a small reduction in demand for goods among US consumers. "
Looks good, right? Yea, but let's take a look at the details:
Here, for example: http://www.bloomberg.com/apps/news?pid=20601087&sid=aC.PdDWZb4JI
"Exports increased to $128.2 billion, led by a $496 million gain in sales of cars and parts, today’s report showed. Exports to Canada reached the highest level since November, in part reflecting the cross-border trade in autos. "
In other words, we moved more cars and parts between US and Canada, thus increasing both export and import.
OK, you would say, but that means that not counting this we would get to even lower imports.
However, "Imports fell 0.6 percent to $158.9 billion in August after jumping the prior month by the most in 16 years." This seams more like monthly fluctuation, than a real decrease. Indeed, import fell because we have imported much less oil in August than in July. But oil imports always peak in July and sharply fall starting mid-August. Right, this year it happened a bit earlier, btw it is not a sign of a good economy.
And here we are: "Excluding petroleum, the trade deficit widened to $14.2 billion from $14 billion the prior month. "
My conclusion: we had visibly lower imports, due to early seasonal fall in oil imports NOT related to weak dollar.
Of course markets keep going up on the "good news".
The following looks rather like a joke: "More than $2 trillion in government stimulus programs are reviving demand from Asia to Europe, ensuring American factories benefit from growing sales overseas as the dollar weakens."
So you need to spend $2 trillion a year to achieve what? Monthly increase in exports of about $0 billion. It would be funny, wouldn't it be so sad.