One of the things I’ve been keeping an eye on is student debt, widely touted as the next bubble. As you can see in the following chart, student debt is at an all-time high, approaching a trillion dollars.

Recently, I’ve noticed some pushback on the notion of onshoring jobs. In particular, some economists I respect have noted that there’s little aggregate evidence of a systemic change so far. Most evidence is anecdotal, they say, and overall manufacturing continues to be relatively weak, despite some signs of strength.

I agree with that, but I don’t necessarily think it disproves the onshoring case. What we’re talking about here is a multi-year process, which will start slowly and then gather momentum—exactly as the offshoring process did. Second, in a time of global economic weakness, it’s hard to discern a nascent strengthening trend against a backdrop of much stronger global weakening. Third, we continue to see signs that manufacturing in the least expensive countries has its own sets of problems, which are becoming increasingly public.

Markets strong as real economy slows

A question I get periodically is whether the dollar is going to collapse. It comes in several different variants, but the crux is usually that, under the Fed’s policies, the value of the dollar has to decline since there are now so many of them in the system.

The most recent version of the question is whether the dollar will be replaced by the Special Drawing Rights (SDRs) developed by the International Monetary Fund. The answer is an unequivocal no, but the original question remains: Is the dollar going to collapse?

The deficit has dropped off the radar for a bit, what with the agreement to postpone debate about the debt ceiling and the generally improving economy, but recent events make it a good idea to check in and see where we are.

We’ve been talking about how the U.S. real economy, despite a second-quarter slowdown, continues to grow. The Fed by and large agrees, with several governors weighing in over the past couple of weeks to say that they see a sustainable recovery in place and that it’s time to start thinking about when and how to begin pulling back. You might be forgiven for thinking “Hooray!” After all, isn’t sustainable growth what we’ve been working toward for the past five years?

Although we do seem to have sustainable growth from multiple sources—housing, autos, and energy, among others—much of that growth is driven by current low interest rates, especially in housing. When the Fed starts pulling back, there is a reasonable possibility of higher interest rates, which will at least slow that growth.

Several data points have come through in the past couple of days that support some thoughts I’ve had for a while. I think it’s constructive to take a look at them to determine how we can expect the economy and financial markets to evolve in the near future.

Like everyone else, I have been affected by the terror attacks of the past couple of decades. I mourned those killed in 9/11, cried for the Sandy Hook children, and sat appalled at Oklahoma City, but the Boston attacks have hit home the hardest, literally. I have never been to Oklahoma City, never lived in New York, so as much as it hurt, it was abstract—removed.

Not this time. My wife and son easily could have been at the finish line for the Boston Marathon. They were at home, working in the back yard, but they could have been there. I have friends who work in that area and had gone down to see the race. I haven’t heard that any of them were injured, but it could have happened.

Several times over the past couple of months, I’ve mentioned that, while we certainly have an unemployment problem now, changing demographics will mean that the U.S., along with most of the developed countries (and China!), will eventually have a labor shortage. Hard to believe, I know, but then again, in 2005, most people didn’t believe that the housing market could ever go down.

I’ve also noted many times that part of the declining unemployment rate may be due to older workers retiring (to put it at its most favorable) or simply giving up on the labor market. As workers get older, a trend that is continuing, eventually they’ll simply drop out of the labor force in one way or another.

The economic stats just keep bouncing around. Although no single statistic is worth getting too excited over, the general trend of the data is pretty indicative, and what we are seeing is a decline in growth after the strong first quarter.