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America's Economy

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AMERICA’S ECONOMY 1. America’s economy is remaking itself led by the private sector 2. Until 2008 growth relied too heavily on consumer spending and house-buying, both of them financed by foreign savings channelled through an undercapitalised financial system 3. Recoveries from debt driven burst always take a long time as households and banks repair their balance sheet. 4. NOW SCENARIO: * America’s houses are now amongst the world’s most undervalued (19% below fair value). * American banks have written off debts and raised equity faster than Europe because of the regulators * American capital ratios are among the world’s highest. And consumers have cut back, too: debts are now 114% of income from 133% in 2007 * EXPORT STRENGTH: The weaker dollar explains the decrease in trade deficit from 6% of GDP to 4% * richer China has become the third-largest market for America’s exports, up 53% since 2007 * American exporters are changing. Some of the products—Boeing jets, Microsoft software and Hollywood films—are familiar. But there is a boom, too, in high-value services (architecture, engineering and finance) and a growing “app economy”, nurtured by Facebook, Apple and Google, which employs more than 300,000 people; its games, virtual merchandise and so on sell effortlessly across borders * American manufacturers are recapturing some markets once lost to imports, and pioneering new processes such as 3D printing. * Net imports of oiil by America this year are the lowest and America should eventually become the next exporter of gas. * America is working its best on its shale gas reserves which has lowered consumers’ energy bills and, by displacing coal, carbon emissions.
BUT! the companies leading the process are so productive, they pay high wages but do not employ many people. They may thus do little to reduce

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