Erle Frayne  Argonza y Delago


Great and mighty is America’s economy! America can buy the whole earth and feed all the world’s people! Americans are the world’s wealthiest, they can buy any and all guys outside the borders!


What delusional arrogance from some demonic Pied Pipers! The USA’s GDP ended up at $12.5 Trillion last year, though some indicator massage could yield a higher figure of $13.5 Trillion (using Purchasing Power Parity or PPP). Measure this against the Gross World Product of GWP of $59 Trillion more or less, end of 2007. Estimates by experts is that the US contributes to 22% of the GWP, and ditto for the EU.


That figure of $12.5 Trillion, fellows, is simply the ‘nominal value’ of the US economy. Nominal and real are two different categories in economics. Granting that the ‘virtual economy’ based on financial speculation has been the one that raised values of commodities and services in the USA, the ‘nominal value’ is actually inflated, rendering the ‘real value’ at a much lower level.


Do recall when the stock market crashed in 2001. At that time, the psychological benchmark was 10,000 points at the Dow Jones. Each point in the Dow Jones then was approximately $1 Billion worth. A decline of 100 points means $100 Billion pared off from the economy, or at least the virtual economy. The stock market eventually crashed down to 7900+, which made my own hair rise with horror all over my body.


The stock market then stayed for a time at the 7,900-8,300 points, for couples of months, before it again steadily climbed. For simplification, let us use the figure of 8,000 points as the lowest level that the economy can crash down to, the rock bottom. That is around 77% of the 10,000+ benchmark more or less.


That figure, fellows, is the rough estimate of the ‘real value’ of the US economy. If we multiply 0.77 by $12.5 Billion, this yields $9.63 Billion. That’s the real figure, the real value, the real score of the US economy. If we convert this to PPP, this will rise a bit to $9.8 Billion more or less. The remaining balance of $3 Billion, to complete the $13.5B –PPP, is all ‘casino economy’ value, all speculative value and nothing more.


So now, going back to a previous question, where and how will the USA get funds to pay for $50 Trillion worth of debts? Do the electoral bigwigs in America possess with them the proper framework to comprehend and recommend practicable solutions to America’s ailing debt crisis and overall economic malaise?


I wish you American voters will do your own deep inquiries about the depth of your problems. The health of the global economy is being endangered by the impending US economic collapse, a fire that can easily burn out the EU as well (this fire had already begun there in fact). When both the EU and USA are in economic collapse or ‘fire function’, the entire global economy will catastrophically fall in deep quagmires.


[Writ 05 June 2008, Quezon City, Metromanila]

Explore posts in the same categories: development studies, economics, globalization, international business, News, politics, sociology

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  1. tallimar Says:

    personally, i think that’s only part of the bigger picture. not only is our (US) economy in danger, but it doesnt help that we continue to send our jobs overseas (to the point that all we have left are grocery stores and fast food). The american market was meant to be a competitive open trade economic model, but with all of the recent folds/mergers on top of exclusivity practices… for example, the only major ISP companies we have are AT&T and comcast. EA is trying to buy out take two (hostile takeover) while blizzard has merged with activision. news co. continues to buy out every news outlet that he can get his hands on (and the FCC practically hands them to mr. murdoch). without competition, we’ll be paying exorbitant prices for sub-par products and services that we cannot afford since we continue sending our jobs out of the country. on top of that, our government is involving us in meaningless wars (arent wars fought with an enemy? if so, then why are we fighting an idea?) while wrecklessly throwing the country into record breaking debts.

    meh, ive lost my train of thought. -.-

  2. Hahaha

    “Bro’s before hoes eh?”

  3. erleargonza Says:

    Copy comments. Talimar, nice info you shared here. Your feedbacks for your own country are very valid. I’m sure many Americans are very confused about the flow of events and the de-industrialization process, the continuing senseless wars, and share the same your opinion as yours. The mergers in the ISP category and telecom are very revealing, sooner or later there would only be just a single market player in that category just like Monsanto does for the seeds/seedling monopoly.

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