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Posts Tagged ‘GDP Richard Florida

Some perspective on GDP, and America’s ability to “come back”

This is much talk these days of the decline of the United States and a fundamental reshaping of relative world economic clout.

It is worthwhile to reflect on the current size of economies before such claims are made. This rambling piece from Richard Florida that I thought was going to deal with the decline of America, actually ends up making the case that the impacts on US cities will be significant.  Of that there is little doubt, but the example of Detroit may not be the best to make the point (the Phoenix example is a better one).

Detroit has had and survived at least four sets of signifcant rioting with manufacturing issues at the core, amplified by race issues.

This from the Pittsburgh News in Oct 1933 during the depression.


Indeed it is worth clicking through and reading of this particular event.

“A factory manager at one plant fired several shots as the mob approached the place, but said he aimed over the heads of the rioters”

What can I say.  The history of the US is all about survival and moving ahead despite setbacks – but I digress.  America cannot be “mis’underestimated.

Here is the GDP ranking of the world.  Bear in mind that 2% shifts in GDP are considered gigantic.  If the US economy reduced by an impossible 50% it would remain 50% larger than the next largest.  [I am aware that there has recently been reported a shift in the top 4 rankings, but the point I am making does not change]

Gross domestic product 2007 | World Bank

Ranking Economy US dollars [000’s]
1 United States 13,811,200
2 Japan                 4,376,705
3 Germany           3,297,233
4 China                 3,280,053
5 UK                      2,727,806
6 France                2,562,288
7 Italy                   2,107,481
8 Spain                 1,429,226
9 Canada              1,326,376
10 Brazil              1,314,170

There will be serious impacts, the economies of the world will be dramatically different after this event we are all part of, but i maintain the ability of the US to come back is unfathomable compared to the rest of the world. The nearest hope would be the EU if only by size, but while they try to re-architect using 20th century thinking, the US has little to fear.

I do worry about the debt levels in the world [The Great Unwinding], reflected in the banking system.  The pending impact of revaluation of that debt to accomodate new asset values will be enormous, and not seen since some of the events in the 17th and 18th centuries.   When the dust settles on that score there will be impacts on countries, exchange rates, and inflation/ deflation within those countries – impacts I am not qualified to predict, but they will come.

Written by Colin Henderson

February 15, 2009 at 16:41

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