US Economy In A Nutshell

When trying to understand the economy of the United States, it is not uncommon to be confused or perhaps misguided by newspeak rhetoric or arbitrary metrics that carry little weight towards making an investment decision. Containing the monolithic beast within an easy-to-understand figure should not be thought of as an arduous task, only achievable by financial talking heads and academic scholars. The US economy on a macroscopic scale should only be viewed as a commercially viable and profiteering business. Instead, we trick ourselves into believing that it is a peace-loving charitable entity, that involves itself with humanitarian aid and global conflict resolution. When in fact, every decision made is cold, calculated, and in accord to the proliferation of the nation's reign.

The illustration above shows a simplified variant of the US economy. The commodities market is the cornerstone to any financial market's success. Its role in the economic spectrum is to establish the value of raw products. The GDP is the market value of all manufactured products and commercial services. The quotient between the GDP and the commodity market index ($CRB) is the return-on-investment (ROI), which is a metric used to determine the profitability of the investment (product). The producer price index is a metric used to determine supply, and the consumer price index is a metric used to determine demand. The stock markets' role in the US economy is that of a manufacturer and distributor. Depending on the demand of a product or service, it will purchase up raw goods (commodities), convert them to finished goods or commercial services, and finally distribute them to the consumers (at profit).

Whenever profit is made, it is always taxed by the federal government and the remaining sum goes back to the corporate coffers that make up the stock market. The government's duty is to supervise, regulate, enforce taxes, and at rare occasions, offer relief to failing businesses.