1. THE PRICE OF GOLD
According to stock market historian David Schwartz, Gold may fall in price to $ 900 per oz, or even $400 per oz.
"History repeatedly warns that prices typically return to the vicinity of their long-term support lines in the aftermath of a burst bubble...
"Between January 1975 and September 1976, the dollar price of gold fell by almost 50 per cent, and there was another big fall after the 1980 peak.
"If you trace the gold price back to the early 1970s ... you end up with a support line just below $400."
ft.com
2. DEBT
The UK and USA should not necessarily be worrying about levels of debt.
The UK had VERY high debts in 1816, but boomed, and reduced debt, in the century that followed.
Between 1949 and 1966, UK debt was mostly over 100% of GDP.
Yet growth was a healthy 3.19 % on average.
After 1966, when debt fell to between 30 and 90 % of GDP, growth fell to well below 3% on average.
ft.com
After World War II, public debt was higher than 90% of GDP in the USA and UK.
But growth rose and debt levels fell.
Slow growth in the UK and USA may now be causing debt to rise.
Spending on constructive things, such as infrastructure and educational improvements, can produce a positive return.
ft.com
2. DEBT
The UK and USA should not necessarily be worrying about levels of debt.
The UK had VERY high debts in 1816, but boomed, and reduced debt, in the century that followed.
Between 1949 and 1966, UK debt was mostly over 100% of GDP.
Yet growth was a healthy 3.19 % on average.
After 1966, when debt fell to between 30 and 90 % of GDP, growth fell to well below 3% on average.
ft.com
After World War II, public debt was higher than 90% of GDP in the USA and UK.
But growth rose and debt levels fell.
Slow growth in the UK and USA may now be causing debt to rise.
Spending on constructive things, such as infrastructure and educational improvements, can produce a positive return.
3. MANAGEMENT
The main thing that has gone wrong in certain businesses, and certain economies, is bad management.
"Prof Van Reenen and his colleagues suggest that around 70 % of international differences in GDP per person are attributable to differences in the performance of management."
Capital investment cannot explain growth rates
4. SKILLS
Many people in the USA and UK are unemployable, because they lack the necessary skills.
In Germany, more workers have the necessary skills to find work; and these workers are better paid; and there is a lower gap between rich and poor.
"Germany channels roughly half of all high-school students into the vocational education stream from the age of 16...
"More than 40 per cent of Germans become apprentices.
"Only 0.3 per cent of the US labour force does so...
"The US is underskilled.
"It has high unemployment at a time when there are 3.5m job vacancies...
"The average hourly cost of a US manufacturing worker is $32.
"In Germany it is $48."
Why the US is looking to Germany - FT.com - Financial Times
Lowering taxes is not the answer.
"Many states, such as Michigan and Ohio, are realising that what desirable investors most covet is skilled labour.
"According to the OECD, the US comes last out of 29 countries in terms of the work readiness of its high-school leavers.
"And 46 per cent of those who go to college fail to complete their four-year degree within six years...
"Almost half of Americans with a degree are in jobs that do not require one.
"Fifteen per cent of taxi drivers in the US have a degree, up from 1 per cent in 1970.
"Likewise, 25 per cent of sales clerks are graduates, against 5 per cent in 1970...
"The US needs to rejuvenate its community colleges, which offer two-year vocational degrees but are often starved of funds. And it needs to fall back in love with apprenticeships...
"Siemens recently had 2,000 applications for 50 vacancies in North Carolina. Only 10 per cent passed the aptitude test."
Why the US is looking to Germany - FT.com - Financial Times
