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HSBC group chief economist Stephen King points to the stock market’s multi-year advance and the under performance of the (U.S.) economy as a growing gap between hope and economic reality by BOTH policymakers and households in his new book When the Money Runs Out: The End of Western Affluence.
King says "We’ve been wrongly budgeting for a return to 3.5% per year average real growth."
Ok lets look at some 50 year charts all with a start date of 1962 to see what the trend is. Down.
The shaded areas on the chart all touch Zero to 5% per year GDP growth at March 31/13 on the right hand % Y axis. All 4 developed economies have the same degree of slope down on lower highs and lower lows.
Australia gets the closest to policy desires but has dropped to 2.5%. Both the United States and Canada are under 2% and Great Britain is under 1%, way under.
If the housing inflationists want to keep chasing real estate prices higher, I suggest they start buying a lot of goods and services otherwise the GDP charts are going to continue eating away at employment, wages and income distribution.
Read the whole July 8/13 interview of Stephen King, by Michael J. Casey, The Wall Street Journal.
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'