Look at it this way of it does get this bad you will be no worse off than anyone else.
You can only lose what your greed has allowed you to accumulate.
US to enter depression china to implode
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Look at it this way of it does get this bad you will be no worse off than anyone else.
You can only lose what your greed has allowed you to accumulate.
The times are different as well, today world economies are closer to each other than any other time.
We've also learned to live with technology and all those life's little luxuries , new car, plasmas, holidays etc and the most important, we haven't seen war and hunger so it is unlikely that people will batten down the hatches big time as they did in the 1930's.
Therefore, it's unlikely that we will have anything more than a recession.
This is text book thinking and i cant disagree with your logic from a theoretical point of view. However the world is more interlinked and dynamic than people give it credit to. Economic modelling has a deficiency in that, in order to model a particular action, it has to hold other factors constant ( i cant remember the latin economic term, something parabis). The real world doesnt opperate under such conditions, but is rather like a living organism.
One alternative poit of view:
1) US is facing deflation, so lets assume foreign demand for US debt falls, the US fills the gap by printing money.
2) This re-inflates the economy and restores confidence.
3) Devalued US dollar leads to decreased imports and increased exports improving the US current account deficit, further restoring confidence.
4) Foreign buyers of US debt re-enter the market enabling the US fed to stop printing money and reverting back to issuing debt instruments.
Economy starts to self adjust itself, private consumption as a % of GDP drops to a more sustainable level, government investment and export fill in the difference.
so your saying cuddlely toys are now going to be made in the "USA" ?
cuddly toys are the only exportable product available in the world. All im saying is that its a global world, hence things are much more complicated than economic models can predict with 100% accuracy. Thats why economists forecasts are wrong more than they are right. And the further into the future they predict the high the margin of error.
Circuit City goes broke after 60 years in biz.
In the US, Circuit City and Best Buy were the consumer electronic guys. 567 stores to close.
LL
http://www.bloomberg.com/apps/news?pid=20601087&sid=ao7Sc7m4zbRI&refer=home
In the US, Circuit City and Best Buy were the consumer electronic guys. 567 stores to close.
LL
http://www.bloomberg.com/apps/news?pid=20601087&sid=ao7Sc7m4zbRI&refer=home
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why do we need portable DVD players anyway?
Bluecard, I agree totally. A whole big chunk of the "US economy" seems to be "stuff" that nobody really needs. Walk around their retail malls. ALL the shops could shut tomorrow and life woud go on. They sell mostly crap & more crap.
LL
This is exactly what i was refering to about the world being like a living organism.
Just step back a moment and look at the big picture, consumers in developed nations have effectively spent more than they earned on private consumption. The market being what it is accomodated the increase in demand by increasing supply (more resources allocated to shopping centres, businesses focusing on imports to cater for the demand, retail businesses etc)
Now the increase in debt has been cut off (and worse still consumers are having to pay back that debt), so of course industries that cater directly to private consumption are going to contract.
The problem here is that because of the excesses of private consumption, this proportion of the total economy is unsustainably large and needs to contract to long term sustainable levels.
Because the world is so interlinked (its more like a global village now), those countries that are 'savers' and exporters are also imbalanced in that they have created export industries that are unsustainably large relative to the total size of their GDP.
Hence a bit like the 24hr bug, the world is regurtitating all the excesses out of its system.
This has happened numerous times over the course of history and is nothing to be alarmed about. The key is to recognise that time of change is upon us. Industries that were the key to riches in recent history will probably not be in near future years.
Instead of just prophetising D&G, its much more profitable IMOP to look at what are the future needs and wants. Being a capitalist society, profits have always been made by satisfying human needs and wants. The nature of these needs & wants will change during cycles (and there are cycles within cycles), but the profit motive and human greed to satisfy these changing needs & wants is constant.
in that case, any business offering half decent service with a smile (so that counts out the whole of WA) should do just great.
