American the worst economy is the world, except for all the rest

Zero Hedge has a post suggesting that the US economy will likely lag the world in the coming recovery.


While I agree with their analysis superficially the reality is that next question to be asked is who is going to lead the world out of the recession. Obviously the US's economy is limping, but so to is Europe's. Their banks are equally bloated and they have disjoint fiscal policies, a more rigid labor market is structurally lower growth. China and the Japan are net exporters, not mention Japan's massive debt/GDP and aging population. How can they as exporters lead the world economy when by definition they will need demand to increase ROW for them to export to? And basically that's it. We're bad off but Europe is worse and Asian needs us to export to. I don't see anyway way for the global economy to improve significantly without the US recovering first. I don't think fundamentally our economy should recover anytime soon but the Geithner's PIPP ponzi scheme may work at least as well Greenspan's ZRIP and the can could be kicked a few more years down the road.

Zero Hedge: "CONCLUSIONS

Ok, so we know the US economy is going to be running on fumes and commodities are going to get expensive - so what? Both messages have been tossed off the cuff by numerous talking heads but looking at it analytically and then combining the two leads to a very scary picture of what's in store. More specifically, the lab rats at ZH headquarters are now working on thinking about what price level action is going to look like, and what that implies for us as citizens first and investors second. We want to caution that this is more complicated than it initially seems as the kneejerk reaction to 'commodity price shock' is 'stagflation' - however, it would be short sighted to toss out that old chestnut without taking into account the massive market manipulations and macro shifts we have seen.

As always, we welcome thoughts, comments, feedback, opposing publications. Additionally, any (good) pieces on price action movement/CPI predictions would be greatly appreciated - cornelius@zerohedge.com"