Shadow economy

AGA7d

Physicists invented dark matter and dark energy when they cannot add things up. The shadow economy is not my invention but I think it is bigger than many thought.

First of all, we see the headlines of wealth-destruction, unemployment, wage stagnation, huge debt and debt payments - plus, there is almost no MEW (mortgage equity withdraw) and plunging consumer credit. So Davidowitz declared the death of American consumerism - which is, IMHO, a logic extension from the adversities facing the consumers.

However, the total consumer consumption, as tallied by the gov, is still quite high - at 2006-2007 level. WTH - what is going on? The answer lies in the shadow economy or the underground economy. "The underground economy refers to both legal activities, such as often found in construction and services industries where taxes are not withheld and paid, and illegal activities, such as drug dealing and prostitution." Of course, we have money channeled to the U.S. by the riches in other countries. So while the U.S has its own share of problems, it is still the destination of the riches in other parts of the world.

Please remember "Shadow economy" when you short U.S. market.

coexist

most from China?