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Started 1 year ago by TomOver
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TomOver
herenowbeyond.org
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As I've noticed headlines during the past couple of weeks or so about an apparently faltering economic recovery, I recall watching a video online about 2 years ago in which the person predicted the world economy in general (with perhaps some striking national and regional variation) would falter then recover slightly, and then repeat the process over and over, with an overall descent over the next couple of decades into a permanent, global economic depression.

According to this person, a key cause of that process is peak oil, given that resource's importance to the world economy, not to mention our current industrially based food system.

Posted 1 year ago #
Core_Models
Columbus
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No.

Posted 1 year ago #
economic guru

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To answer your question, economic times are going to be extremely difficult for many years. It's not due to peak oil, it's due to the debt load people are carrying, governments and business.

Gerald Celente has made some very bold predictions in the past, all that have come true.

http://rawstory.com/rs/2010/0820/economic-forecaster-greatest-depression-coming/

The slow down is already happening right now all around the world. The Baltic shipping index is approaching all time lows again. It measures the amount of goods shipped around the world via cargo ships. It's usually the first indicator. It has been used since 1744.

Goldman Sachs says the end of the Fed recovery money is going to crush GDP growth, it's already slowing down.

http://www.businessinsider.com/chart-of-the-day-gdp-growth-fiscal-stimulus-2010-8

This is the scariest job chart ever witnessed by our generation, and more people and college grads come into it everyday.

http://www.businessinsider.com/chart-of-the-day-percent-job-lossess-in-post-wwii-recessions-2010-8

Der Spiegel, says the US middle class is being wiped out.

http://www.presstv.com/detail/139522.html

Ohio is looking down the barrel at an 8 billion dollar deficit next year. State funding for many projects are going to stop, be cancelled or put on hold. Many state workers will be let go from their jobs adding to the problem.

How we get out of this mess is anyone's guess. At least in the 1930's the US still had factories to employ people, we don't this time around.

It's going to get very ugly, very soon, be careful with your money and where you go and what you do.

You want the truth, this is it from my point of view, based on the best information available. I wish I could see it better, but reality is what it is.

Posted 1 year ago #
mellotron
Arena District
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In recognition of this weekend's softball tournament I'd just like to point out the tremendously fat lob pitch TomOver just served up.

Also, enlighten me. The list of 30 Dow Jones companies is in flux to maintain relevance. What makes the Baltic Shipping Index (boxes in crates on boats) such a robust measure of commerce for > 250 years?

Posted 1 year ago #
KingLincolnUrbanEnthusiast

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Until we and the US understands the need to focus on the longterm and A national concerted industrial and commercial policy to export and create healthy good paying jobs in the US we are doomed.

Corporate couldn't give a shit about the US - just shorterm profits and how to extract value from a "global" labor pool. We need US patriotism and a belief that we are the best and we should look out for the US, b/c no one else will.

We also are competing with 1 Billion Chinese Communists - every Chinese company is 51 percent owned by their gov't - Buy American when you can and stop buying all the corporate US/gov't BS....Why is our gov't NOT talking about the Communists (US Debt) - and the Chinese Communist/b/c they want us to be sidetracked by the BS - not undertstand how we are being played for fools! Free trade is not free and American companies and exports are behind the eight ball 99% of the time - even when we have the best products and the lowest costs we are systemically being discriminated against all over the world while our companies are flooding our market with junk and exporting our jobs (OUR FUTURE) financed by the IRS

Posted 1 year ago #
Bristol Bar

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That's only 1/2 of it; the other 1/2 is when the US consumer decides to pay more than $4.99 for a t-shirt. Those good job $'s flow down right into retail price.

Posted 1 year ago #
JimL2

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If it's "permanent" it's not a depression, it's a market correction. Or a Malthusian catastrophe. Or something. But "depression" indicates a rising action after the falling action.

Posted 1 year ago #
TaraK
probably at the coffee shop
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If only we could tax our pop culture export.

Posted 1 year ago #
econJoe
Victorian Village
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I don't think anyone has actually answered why this is happening, except the person with all the charts above who said it was about debt.

Economists know to an extent what is dragging on GDP growth in the United States, but they don't all agree on what problems to address first.

Americans are not in a position to forward the global recovery because they are trying to deleverage themselves (pay down debts). The countries who experienced current account surpluses (and, ergo, financial account deficits [i.e. they bought financial assets]) over the last fifteen years are in a good position to give rise to new consumers who are less leveraged. China, among them, has tried to maintain its pre-recession position though of growing by exporting. The Chinese government needs to focus on providing the social safety nets that Western countries provide their citizens, so its citizens can consume more without the worry of saving for personal crises. Currently, Chinese consumers are saving around 30% of their incomes, which is a very troublesome level of saving. As well, the Chinese government needs to stop pegging its exchange rate because, while long-term the real exchange rate adjusts to manipulation, the long term could take a very long time and a lot of suffering on the part of other countries' peoples.

As for what the American government can do, the Federal government can borrow more money to do another round of stimulus spending. Most economists agreed that the first stimulus bill was not big enough. The recession has caused an output gap of about $2 trillion, yet the stimulus bill was about one-fourth of that (or one-third if you count tax cuts as stimulus spending). Right now, there is too much saving going on in the world and not enough spending. Private investment is not nearly enough to soak up all the saving, so saved money is just sitting around. The government can borrow that money and spend it. This is what post-Depression macroeconomics is all about, yet Republicans have rejected it over deficit concerns. The truth is that fiscal austerity in a depressed economy actually reduces short- and long-term tax revenues. In a depressed economy, greater fiscal support is a boon to tax revenues.

I think it's pretty obvious that there are a lot of events culminating into the current economic situation. And it takes more than a message board post to explain it. This is material and data that economists digest everyday for years to understand.

Posted 1 year ago #
JonMyers
HCMC ✈
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Personally, I think 99.9% of people suck at predicting the future, including experts, economists or ordinary people. The reality is nobody knows.

What you can be assured of is that things will change and massive change can be sudden. Massive sudden change is inevitable.

If you're afraid of change, if you fail to adjust or evolve that's fine. You best bet someone else, somewhere will be happy to evolve and take your place and chances are they're willing to work a lot harder for your place.

Posted 1 year ago #
rus

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On the economic necessity of the stimulus...

http://www.city-journal.org/2010/20_3_social-science.html

In early 2009, the United States was engaged in an intense public debate over a proposed $800 billion stimulus bill designed to boost economic activity through government borrowing and spending. James Buchanan, Edward Prescott, Vernon Smith, and Gary Becker, all Nobel laureates in economics, argued that while the stimulus might be an important emergency measure, it would fail to improve economic performance. Nobel laureates Paul Krugman and Joseph Stiglitz, on the other hand, argued that the stimulus would improve the economy and indeed that it should be bigger. Fierce debates can be found in frontier areas of all the sciences, of course, but this was as if, on the night before the Apollo moon launch, half of the worldÃ¢â‚¬â„¢s Nobel laureates in physics were asserting that rockets couldnÃ¢â‚¬â„¢t reach the moon and the other half were saying that they could. Prior to the launch of the stimulus program, the only thing that anyone could conclude with high confidence was that several Nobelists would be wrong about it.

Posted 1 year ago #
econJoe
Victorian Village
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rus wrote >>
On the economic necessity of the stimulus...
http://www.city-journal.org/2010/20_3_social-science.html

In early 2009, the United States was engaged in an intense public debate over a proposed $800 billion stimulus bill designed to boost economic activity through government borrowing and spending. James Buchanan, Edward Prescott, Vernon Smith, and Gary Becker, all Nobel laureates in economics, argued that while the stimulus might be an important emergency measure, it would fail to improve economic performance. Nobel laureates Paul Krugman and Joseph Stiglitz, on the other hand, argued that the stimulus would improve the economy and indeed that it should be bigger. Fierce debates can be found in frontier areas of all the sciences, of course, but this was as if, on the night before the Apollo moon launch, half of the worldÃ¢â‚¬â„¢s Nobel laureates in physics were asserting that rockets couldnÃ¢â‚¬â„¢t reach the moon and the other half were saying that they could. Prior to the launch of the stimulus program, the only thing that anyone could conclude with high confidence was that several Nobelists would be wrong about it.

I think it comes off as more divided than it is. No economist disputes that greater temporary fiscal spending in a depressed economy will boost GDP growth. Economists just dispute whether we are in a depressed economy or whether in upcoming years the fiscal expansion will have reduced or increased tax revenues.

And, you're right, physics isn't like economics. That's because economics is a social science. Through the latter half of the twentieth century, there was a lot of physics envy in other disciplines. But most disciplines' experts now agree that it's pointless to try to make your field something that it's not. Economists will always have trouble predicting the outcome of taken actions because there are hardly ever data at the present that are fully complete and accurate. Humans are complicated. Who knew.

Posted 1 year ago #
Core_Models
Columbus
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Well, I don't have all the economics background apparently within this thread, but if a Depression is a continued decrease in real GDP...we aren't in one. The last 3 quarters have all had increases in real GDP.

Posted 1 year ago #
manticore33
Delaware, OH
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Humans are not complicated, we are irrational. Thus, perception bias on and how the same situation is present will cause us to react in different way and contradictory ways.

See, economies are so easy monkeys can do it:

Laurie Santos: A monkey economy as irrational as ours

http://www.ted.com/talks/laurie_santos.html

Posted 1 year ago #
myliftkk
Columbus, OH
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Core_Models wrote >>
Well, I don't have all the economics background apparently within this thread, but if a Depression is a continued decrease in real GDP...we aren't in one. The last 3 quarters have all had increases in real GDP.

By the textbook definition, right we're not in one. More concerning than a depression at least to some economists is the rising threat of deflation like that of Japan. Then on the other hand you've got the fiscal austerity bunch insisting on a double-down of economic pain to ward off what Krugman calls the invisible bond vigilantes.

Posted 1 year ago #
economic guru

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There is real problem with the government ability to give accurate figures.

Every quarter they release GDP figures only to revise them downward quietly months later, as they were supplying false information to the public.

http://blogs.investors.com/capitalhill/index.php/home/35-politicsinvesting/1950-q2-gdp-growth-could-be-revised-to-just-1-after-trade-data

Nearly every stat they release can not be believed anymore.

I do not think there will be a second stimulus coming, if the Republicans take control of the House or Senate, as is expected, they will not pass one. It is also highly unlikely that anymore unemployment benefits will be extended. So we're looking at what we have to work with. People with no money and no food tend to get desperate and do things they never considered before.

Best known motivational speaker Tony Robbins, who always looks at the positives of everything, has switched his tune dramatically in weeks.

http://theeconomiccollapseblog.com/archives/even-tony-robbins-is-warning-that-an-economic-collapse-is-coming

Now let's fire up another war this time with Iran, which will make Iraq look like a fun slumber party. They are armed to teeth and given their history in the Iran/Iraq wars of the early to mid 80's will fight to death. They will not give up.

http://www.zerohedge.com/article/israel-knesset-member-declares-we-are-preparing-war

Posted 1 year ago #
myliftkk
Columbus, OH
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Perhaps the Dems should trot out the old "Daisy" ad to ward off Republicans.

http://www.lbjlib.utexas.edu/johnson/media/daisyspot/

Might as well go full bore on the fear factor.

Posted 1 year ago #
economic guru

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Even the dems in congress are getting political.

Recent draconian cuts to people receiving food stamps; instead those funds now going to help finance school teachers and those receiving medicaid.

http://www.politico.com/news/stories/0810/40866.html

Teachers vote, and the elderly vote. Those at the lower end of the economic totem pole tend to vote far less.

http://www.springerlink.com/content/n9n3x86333l66062/

Posted 1 year ago #
economic guru

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Recent Wells Fargo economic survey of small business ( 100 employees or less).

This is the worst it has ever been. It's not zero, it's below zero. Which means they likely will terminate jobs and positions.

Since small business creates and hires 70% of all the new jobs, if they are so negative about the future, who is going to do the hiring ?

http://www.gallup.com/poll/141692/Wells-Fargo-Gallup-Small-Business-Index-Hits-New-Low-July.aspx

Posted 1 year ago #
Tenzo
Chicago Lakeshore
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myliftkk wrote >>

Core_Models wrote >>
Well, I don't have all the economics background apparently within this thread, but if a Depression is a continued decrease in real GDP...we aren't in one. The last 3 quarters have all had increases in real GDP.

By the textbook definition, right we're not in one.

By one of my Econ professors definition, we are only in a recession.

A recession is when you don't have a job. A depression is when I don't have one.

Posted 1 year ago #