(http://www.ft.com/cms/s/0/2ef9698e-0fbf-11dd-8871-0000779fd2ac.html)
The saddest thing that ever happened to economics [and by derivation business reporting] was teaching the idiots algebra. They fell in love with equations and lost sight of the economic realities they were supposed to convey.
US has been living beyond its means since the late 50's. A half century of a world economy has at its base US over consumption and under production. We are now reaching the end of the cycle. The various major players are trying to find a way not to accumulate mountains of dollars while still keeping the US as the consumer of last resort. It doesn't work. The dollars have to go someplace. We have had going on two decades of rolling asset bubbles as those surplus dollars try to find a home. Japanese real estate, US dot com stocks, exotic financial instruments...at core the problem is the US balance of payments. To make this flood of hot money go away US has to be allowed to run a surplus. The problem is that no one wants to take the hit on employment and production.
Now a smarter world leadership cadre could cushion the fall. Our leader cadre worldwide is orders of magnitude dumber than the 70's when the WW2 generation [who still remembered from WW2 and the Depression just how far wrong it could all go] were running things. The current Boomer Yuppies are near clueless. We are rolling REALLY big dice here folks and the fools in charge haven't a clue. I had someone explain the current commodity boom as a peak oil thing. Uh huh. It had nothing to do with National Oil Companies, NIMBY greens in the US or two decades of lack of investment. This was an intelligent person who lives in the energy biz. Clueless.
Scott