Hard Light Productions Forums
Off-Topic Discussion => General Discussion => Topic started by: Unknown Target on December 24, 2011, 09:45:12 am
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So I've been looking all over the net, can't find any good, reliable source on this. Sites like Zerohedge keep talking about how we're going to get hit hard come next year, but from my view on the ground things actually seem to be coming around. That being said, a lot of the statistics simply say that things are bad, with 1 in 2 Americans poor or in poverty.
So what's everyone's thoughts? I could see us making it a little bit longer, but then that could just be the calm before the bottom drops out. Thoughts? Discussion?
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Euro. That's where the problem likely lies right now. And yes, the Euro's issues will definitely affect the US.
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Totally. But the way I see it, it looks like rather than collapsing, the Euro is more likely to reunify into becoming something more akin to the United States of Europe, in order to maintain stability. So again, I see things as getting more stable over the next few years. Whether that stability will translate into prosperity, I see that as the real question. If it doesn't, then we're probably going to see more measures like NDAA and SOPA being pushed through to try and keep power where power currently is.
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US is rebounding, Euro appears to be getting its crap together, predictions of 2012 recession are premature.
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Yeah, although the next year's going to be interesting in terms of european politics, I believe the worst is behind us. What might happen is that a few treaties get amended so that countries can leave the Euro without having to leave the EU as well.
I just hope we (we as in germans) can manage to not make things even worse by insisting that everyone follows our policies TO ZE LETTER; unfortunately, the next election is in 2013. One more year where Merkel can do even more damage.
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http://www.marketwatch.com/story/euro-zone-nov-pmi-points-to-further-contraction-2011-12-05
The Euro is headed for if not already in a recession. The recession will hit the US and Asia hard. How hard the US is hit is also dependent on American politicians to derail the weak recovery. China is headed for a slowdown and bad loans made during their stimulus package in 2008 could lead them to have a economic crisis similar to that of the West. Q4 of 2011 is just the calm before the storm methinks
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I've been listening to plenty of predictions and such over the last year or so, and the most likely scenario I've heard is that the worldwide policies that lead to the 2008 crash (basically, a decade or so of growth that was funded largely by borrowing across most of the civilized world) have put us pretty deeply into a ****hole. The 2008 crash should have caused a lot more damage than it did, a 1930s style depression wasn't out of the question by any means, but the governments of the world got in and nationalized a buttload of debt. This headed off the initial crisis, but also took away the economic capability of the taxpayer to buffer future, smaller shocks (not to mention destroyed the political capital of governments to intervene in big ways).
I'm not saying the Euro crisis is a "smaller" shock, exactly, but if 2008 hadn't happened:
a) The European governments in debt would probably have lasted a lot longer before their houses of cards came crashing down - not necessarily a good thing (see the size of the US debt for what happens when governments are seen as limitless sinks of security), but it would have meant the crisis wasn't happening in 2011 (yet). And even if it had occurred in this alternate, non-recession hit 2011:
b) The populations of the European nations not so badly in debt would most likely have been a lot more willing to help out their neighbours, without 3 years of slow growth caused by the banking crisis.
The point is that until nations, markets and populations recover both their nerve and their financial strength, every small crisis that comes along is going to be magnified into a much larger crisis, for no other reason than the lack of government (or market, or anybody's) capability to respond to them effectively. The result will very likely be a long period - the estimates I heard were around 20 years - of slow, patchy growth, constantly shaken by this or that new market instability. This euro problem is the first but it wont be the last.
So, predictions for 2012, then.
1) The Eurozone will shrink, but it wont break up. At this point, the smaller Euro nations are being held in against their own direct economic interests because they've been convinced that a breakup of the Euro is worse for them as part of Europe. But think about it. If, for example, Italy were to break away from the Euro and return to the Lira, they could devalue their currency, encourage tourism and promote exports - i.e. the standard feedback buffers that exist in every independent nation's economy. The problem, of course, is that the Euro is being held artificially high (in these nations) by stronger economies, most notably Germany. Of course, if the Euro were to break up entirely, the new German Mark would shoot up in value, since it would no longer be held down by its weaker partners. This woud hammer Germany's auto and manufacturing sectors, which are currently getting a boost from an artificially low euro. See the non-mining economy in Australia right now as an example - mining is keeping the AUD at US$ parity (or above), which is hammering manufacturing, and even mining wouldn;t be viable if it weren't for massive commodity prices.
2)Commodity proces will fall. Significantly, but not sharply, more like a gradual decline as demand drops. Year end 2012 I reckon we'll see coal and iron in particular down much lower than they are now. Oher base metals to, most likely. Currently, they're being kept high by demand in China (and to a lesser extent other big developing nations like India and Brazil). Why? Because, well, if China does have a major crisis, then all bets are off, but even if not, I think that a lot of the developing world's growth is still based on a pre-2008 paradigm, when it was simply assumed that the developed world would keep buying their stuff at massive rates. And since the 2008 recession had relatively little impact on them (Chinas annual growth dropped from 11 percent to 7 or 8 (and yes, I know this was somewhat inflated, but the fundamental strength was still there), I don't think the changes in the world really filtered through. Plus the boost provided by stimulus spending has only really run out in the last 12 months or so. But sooner or later, things have to bite. European austerity and American recession are already and will continue to have a negative effect on the sale of developing nation's products. This will slow growth in those countries, and the mad pace of building (which is what has drove the commodity prices up in the first place) will slow down. Short of true catastrophe, I don't see China falling into recession (they've been developing domestic demand enough that it will eventually be enough to keep them stable, and frankly they still make just about everything we use over here in the West - even if we buy less, we wont stop buying entirely).
There's a bunch of crap connected to that - our mining boom will slow down, and investment in exploration will drop off again, just as it did in 2008. Which is a prick of a thing for me, an exploration geologist (who was sacked along with every other geo in the company when the GFC got us). So thanks a lot northern hemisphere. But I can't be bothered typing any more, insomnia or not.
TL;DR
- The easy ride that the past few generations have had wont apply to us.
- 20 years of crappy economies
- You northern punks are going to get me sacked. Again.
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SUM:
The Second Great Depression
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No, I am pretty sure this won't end in hyperinflation, and a new world war.
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awww but i really wanted a world war. :(
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-snip-
SUM:
The Second Great Depression
No, that's the point. It'll probably never be allowed to get that bad, but equally, I don't see us globally pulling ourselves out of this for a very long time. The catastrophic crashes that led to the great depression probably wont happen - we've established the precedent for government intervention to stop things like that. But in future, we'll see the kind of half hearted, "low-risk low-reward" interventions that ensure that the damage will be limited, rather than prevented.
So no, no second great depression. More like the Japanese situation, but for the whole world - years and years of slow, low growth, dragged back into negative territory and minor recession every few years whenever a new crisis comes along.
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Firstly the Euro problem, that could put us back into recession. However, I think the big key is oil prices. If oil gets lower then I'd easily expect some modest expansion. The problem then lies on if expansion does occur, how fast will traders jump the price of oil once more. I think if oil prices once again head for that $4 a gallon mark, expect another recession just based on that. The recession may just be slightly negative growth, but the economy definitely will stall.
While everything is growing slightly, everything is still so shaky it wouldn't take much.
I do believe the world will face a nasty depression in the future. Everyone can buy off debt for so long, but with the core problems still not being fixed, it will fail. No matter how much bailing you can do and whatever the bucket size, as long as there is an hole in the hull, you will eventually tire and the ship will sink.
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Thing is, to get rid of a debt like these countries have, you really have to raise taxes and lower spending. But we constantly get stuck with politicians that only want to do one of those and spend all their time arguing over which one to do.
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awww but i really wanted a world war. :(
We know you did, nuke. We know. There, there. Don't worry, population pressure'll bring it about before too long. It'll be okay. You'll see. Everything'll work out in the end.
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US debt in 100 dollar bills: http://usdebt.kleptocracy.us/ (lol)
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Thing is, to get rid of a debt like these countries have, you really have to raise taxes and lower spending. But we constantly get stuck with politicians that only want to do one of those and spend all their time arguing over which one to do.
Yea, which is really too bad. Politicians also seem to be taking the opposite of what's needed; harsh austerity instead of spending and fostering new developments. I think it'd be cool to have a US Gov. program that's designed to efficiently and effectively connect like minded entrepreneurs from around the country.
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-snip-
SUM:
The Second Great Depression
No, that's the point. It'll probably never be allowed to get that bad, but equally, I don't see us globally pulling ourselves out of this for a very long time. The catastrophic crashes that led to the great depression probably wont happen - we've established the precedent for government intervention to stop things like that. But in future, we'll see the kind of half hearted, "low-risk low-reward" interventions that ensure that the damage will be limited, rather than prevented.
So no, no second great depression. More like the Japanese situation, but for the whole world - years and years of slow, low growth, dragged back into negative territory and minor recession every few years whenever a new crisis comes along.
I'd rather just take it all at once and be done with it.
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All I can say on this subject is I hope the worlds economy does NOT fail, or any country for that matter, I am already using wood to heat the house cause I can't afford both gas and heating oil, and food, and everything else I have to pay, any more and I will add my family to the homeless list :(
Unless the entire worlds govt come to an end and financial institutions totally shut down taking the credit companies with them and we go into the wild wild west again. then I'll thrive lie my ancestors did.
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Yea, which is really too bad. Politicians also seem to be taking the opposite of what's needed; harsh austerity instead of spending and fostering new developments. I think it'd be cool to have a US Gov. program that's designed to efficiently and effectively connect like minded entrepreneurs from around the country.
Spending and fostering new developments mh? Isn t that what everyone has been doing for decades everytime the economy hit a tiny snag? Isn't that what got us into the mess in the first place? Now we re at a point where governments quite literally can see the debt wall that they are about to run into... while the only alternative appears to be the cliff that our economy is already headed down all by itself :p
What is especially idiotic is that people by and large still think this "crisis" was something that suddenly developped and now has to be "fought" and "overcome". Idiots...
What we are dealing with now is very much the direct result of mismanagement that has been going on for decades, forget the easy outs and "swift recoverys"... and especially forget "business as usual".
Business "as usual" as practiced in the US over the last decades is the very reason that we are into this mess... so any return to "business as usual" would very much be the setup for the next big crash.
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What we've been doing for the past several decades is having the government borrow a ton and spend it on entitlements and the military budget.
What I was suggesting was that we have a more concerted effort to reducing regulation in ways to help new businesses start up and restart stalled industries (general aviation, for instance) , and bring private industry money to bear on the problem. I know this sounds a bit like GOP talking points, but I haven't ever seen them actually do what they say they're going to do.
But in the end all of what I'm saying is basically just meant to stem the blow. We're going to have to face the consequences of the past few generations' decisions, and we will have to grow a lot over the coming years to deal with what's about to happen to all of us I think.
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What we've been doing for the past several decades is having the government borrow a ton and spend it on entitlements and the military budget.
Yet... neither are the root of the problem. Compounding factors...
...but the economy would have run against a wall either way. The governments involvement only really matters as in that it "maybe" happened "a little bit sooner than later".
What is certain however is that if there was no government regulation (or government) at all (i.e. what all the free market idiots are lobbying for)... it would have happened a LOT sooner. :p
It's hilarious that that fact still hasn't sunken in and people are often still repeating "lower taxes" "less government" like a mantra... well guess what? .... That didn't work the last decades, it won't work now. It certainly won't fix the underlaying issue that causes the whole economy to finally go haywire. The most hilarious thing is that some people may now accuse me for wanting "higher taxes and more government" as if it was only these 2 alternatives with *nothing* else that the government can do that matters.
The government at this point (by choice or lack of alternatives, who knows) is a somewhat impotent bystander, throwing money at a forest fire when asked to because it can't imagine what else to do and doesn't wanna get "caught appearing" not to do anything.
What the US really faces is a systemic crisis caused through pervasive business practices that were never viable in the longterm.
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It's not that I don't agree with you, I do. I'm coming from the perspective where I see there being a lot to do locally to help areas get through this and what's coming up, but I'm stymied by laws and lack of support.