U.S. economic growth likely was much weaker than initially thought between April and June, hurt by surging imports and as rebuilding of business inventories softened, a government report is expected to show on Friday.
Gross domestic product now is estimated to have grown at a 1.4 percent annual rate during the second quarter, rather than the 2.4 percent estimated in the government's first reading last month, according to a Reuters survey.
While cracks in the façade of big consumption and government are beginning to show, the economic and financial structures that maintain it are still in place. As long as Americans consume more than they produce, they must issue debt (paper claims against future production) to balance the shortfall.
BIG CONSUMPTION -
Personal Consumption Expenditures (PCE) As A %GDP and Personal Consumption Expenditures As A %GDP Average from 1947:
BIG (GROWING) PUBLIC SECTOR -
Government Consumption Expenditures and Gross Investment (GCEI) As A %GDP Average from 1947:
The more debt America issues, the more devaluation of the U.S. dollar will be consequence of most, if not all, policy responses.
Source: finance.yahoo.com
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