Economic News Updates

February 27, 2020

US Prosperity in the Midst of World Recession/Depression in 2020

Trump virus news briefingPresident Trump’s virus news briefing on February 26, 2020

For 30 years, based on my economics model that ties the Kondratieff wave to cycles of development of physics, I predicted that the decade of the 2010s and the early 2020s world be a world recessionary or depressionary era. I think the prediction was accurate since in order to stave off depression, the world’s economies took on tens of trillions of USD in debt in the last 13 years. I thought the US was going to experience a downturn in the decade of the 2010s, but about two years ago, I realized that everything had changed. The world was still in the depressionary era due to all the causal factors inherit in this “technological acceleration” period of industry. But President Trump’s policy changes encouraging industrialization and reciprocal trade and the big energy and technology boom were signs that the American economy was resurgent.

So as I’ve been writing recently, an economic boom will happen in the US. It has been happening in the face of recession or low growth around the world in 2019. But now stock markets are tanking around the world. At the time of this writing, the US stock market is still a very high 27,000 or so points.

I think that the causal factors toward recession/depression still hold in the early 2020s: huge debts and automation of industry and services will cause more unemployment around the world. I described the causes in this 2007 Letter to the Editor of Infinite Energy and previously in 1989 and 1990 according to my economic model in my book.

Compounding the downturn now is the pandemic. According to CargoMetrics, China’s container cargo exports were about 60% below the pace of 2 months previously, and dry cargo volume of imports has decreased 40% compared to two months ago. Most of China or all of it is in some form of quarantine now. If they attempt to reopen factories now, this might actually make the virus spread faster. The economy is being destroyed.

Americans will have to either produce internally the products that were previously imported from China or find other suppliers such as India. It looks like the virus is spreading in Europe due to their open border policy. This will produce even more internal industrialization in the US, and cheaper energy and food might help Americans exports. To stave off famine, the Chinese might import even more agricultural products than the approximately 50 billion USD figure declared in the January, 2020 trade agreement. However, the pandemic spreads around the world, people around the world will consider the US as one of the world’s safe havens in 2020. So capital investment and technology transfer will continue unabated.

January 18, 2020

Evidence of the US Economic Boom in the Early 2020s

signing of the US China trade agreementSigning of Phase 1 of the trade agreement between the US and China

In my previous post in October, 2019, I said that an economic boom period might actually happen in the US and that there might be no recession in it during the next few years even though the world is still in an economic depression or deep recession period of this long wave as I described in 2007 in a Letter to the Editor of Infinite Energy and previously in 1989 and 1990 according to my economic model of economic depressions based on my paradigm shift theory as described in various articles and in my book.

I explained in the post below several months ago that this possible period of rapid growth and prosperity in the US is due to recent changes in the world economy such as the US energy production boom, American manufacturing advancements, and recent policies implemented by Trump. However, I think other advanced economies in the world may face a period of deep recession or depression including China and big mainland European countries.

The debt loads that the world’s countries took on during the past 12 years in an effort to stave off depression, stimulate their economies, and provide work and resources to their unemployed, such as the approximately 13 to 14 trillion added by the American government, did get the world out of the deep world depression, but the economies of the world are still in a long wave technological acceleration trough period caused by the process innovation in industry that leads directly to reduction of human labor, oligopoly formation, and high corporate debt loads as I predicted for this time in the 1990s.

In the speech at the signing of the US-China trade agreement, Trump said that with the opening of new pipelines, American oil production will surge another 22 percent. If this happens, US oil production may double or triple within the next few years. It is already far greater than any other country’s. Along with this, the US is having a big boom in ethanol production and other sources of energy.

The China-US trade agreement along with the USMCA agreement will increase this production boom in the US as industries move back and companies around the world relocate production to the US. That the stock market just surpassed the 29,000 point level on the day of the Phase 1 China trade agreement is evidence of the economic boom being underway as I predicted a few months ago.

However, other countries will probably be having recessions or depressions. The rapid advance of automated and robotic production will lead to higher labor unemployment in the next few years, and the advance in computer technology will also lead to the reduction of service and office workers in many countries.

Possible US Space Industrialization and Mining

US private rocket launchUS private rocket launch

If US private space ventures and NASA succeed in their announced plans of putting Americans on the Mars by 2023 or 2024 as Trump is planning and begin space mining and industry, this may add to US production in the next few years.

October 28, 2019

Economic Boom Possible in the US in the Next Few Years

There have been a lot of quick economic changes in the last few years since about 2015. On top of the already huge and quickly growing debt, the money creation, and the forces towards automation, oligopoly, and labor layoff associated with this technological acceleration stage of industrial development that we’ve been in since about the year 2000, President Trump’s policies are causing great changes in the world economy as America has become the leading energy producer and is reindustrializing. So I’m starting this “Economics News Updates” blog to describe what is happening for people.

Perhaps Recessions, Depressions Around the World and Prosperity in the US

chart of US oil production 2019

2018 US, Saudi, Russia Oil Production; 2019's Production Is Higher

I think many of the world’s economies will feel the effects of the deep recession/depression soon though the US and some other countries might prosper from this due to recent changes in the world such as the big US energy boom and manufacturing resurgence.

In 2019, the US produces about 40% to 50% more oil than does Russia or Saudi. The chart above is for 2018 production, and US production of oil in 2019 is even higher. It is expected that production will continue to increase as new oil fields, pipelines and other sources for oil are being created now.

The US is now the biggest producer of natural gas, and natural gas production is also increasing. Other sources of energy such as coal, solar, and nuclear are also increasing.

A deep recession or depression is unavoidable for most countries simply as a result of their debt creation and the nature of development of industry now that is primarily driven by process innovation, oligopoly formation, automation, robotization of production, and shifting away from the use of human labor for manufacturing and service work. The substantial debt creation temporarily staved off the recessionary/depressionary effects that began to be experienced around 2009 to 2015.

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