The Bad World Economy & You
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- volomike
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The Bad World Economy & You
I worry about PHP programmers both employed or freelancing right now. Here's a crazy chart everyone should see:
http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&width=1000&height=600&preserve_ratio=true&s[1][id]=BORROW
(BTW, I turned off URL parsing on my post because it had problem with brackets.)
...followed by this one:
http://finance.yahoo.com/echarts?s=GBPUSD=X#chart3:symbol=gbpusd=x;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
The first chart is from the St. Louis Federal Reserve. Basically since the 1920's, everything was okay even in the Great Depression. When looking at billions, banks weren't dipping into the Federal Reserve so deeply, which might seem hard to believe. Then, look at what happens 4 months ago.
The second chart shows just how fast the British Pound is sinking against the US Dollar. It's sinking pretty darn fast, and much further than low points of the last couple years.
You know, before all this crisis happened, some have advised me to just pay down debts instead of investing because no reasonable investment would outdo the interest penalty of a debt. However, when you pay a debt, it goes to a bank. If the bank folds and goes bankrupt, another, larger bank buys it out. But if there are no larger banks to buy it out because they're hurt too, and if the government doesn't bail it out, then there's no debt, is there? Not realistically. I mean, if there are no employees to man the safes at the bank because they can't afford them and no government or larger bank will buy them out, all those house and car titles are free, in a sense.
And it's obvious that investments putting money in banks might be good for the banks, but I don't know how good it would be for you and me. So, I almost have an urge to purchase gold and keep it. It's no wonder that the Saudis are purchasing gold like crazy right now, which, by the way, causes gold prices to rise even more.
So, I don't want this to become a political flame thing back and forth. I just want to say to all my fellow PHP programmers, we're in a real pickle. Might be a good time to buy gold.
http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&width=1000&height=600&preserve_ratio=true&s[1][id]=BORROW
(BTW, I turned off URL parsing on my post because it had problem with brackets.)
...followed by this one:
http://finance.yahoo.com/echarts?s=GBPUSD=X#chart3:symbol=gbpusd=x;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
The first chart is from the St. Louis Federal Reserve. Basically since the 1920's, everything was okay even in the Great Depression. When looking at billions, banks weren't dipping into the Federal Reserve so deeply, which might seem hard to believe. Then, look at what happens 4 months ago.
The second chart shows just how fast the British Pound is sinking against the US Dollar. It's sinking pretty darn fast, and much further than low points of the last couple years.
You know, before all this crisis happened, some have advised me to just pay down debts instead of investing because no reasonable investment would outdo the interest penalty of a debt. However, when you pay a debt, it goes to a bank. If the bank folds and goes bankrupt, another, larger bank buys it out. But if there are no larger banks to buy it out because they're hurt too, and if the government doesn't bail it out, then there's no debt, is there? Not realistically. I mean, if there are no employees to man the safes at the bank because they can't afford them and no government or larger bank will buy them out, all those house and car titles are free, in a sense.
And it's obvious that investments putting money in banks might be good for the banks, but I don't know how good it would be for you and me. So, I almost have an urge to purchase gold and keep it. It's no wonder that the Saudis are purchasing gold like crazy right now, which, by the way, causes gold prices to rise even more.
So, I don't want this to become a political flame thing back and forth. I just want to say to all my fellow PHP programmers, we're in a real pickle. Might be a good time to buy gold.
Re: The Bad World Economy & You
Unless you're investing millions a bank is about the best (eg safest) option.
Re: The Bad World Economy & You
Money and wealth are overrated anyway. So, we have to postpone buying that new plasma screen and that second car for a while, it seems.
Are you going to be unhappy because of that?
Are you going to be unhappy because of that?
- Christopher
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Re: The Bad World Economy & You
I don't know exactly what that graph says, but I have two thoughts:
1. It is in unadjusted dollars and the economy is a lot bigger that it was.
2. The current Fed chief Ben Bernanke is famous for his analysis of the Great Depression. His main point is that it could have been avoided if the Fed had injected capital then, as it is now. The theory is that the problem in these situations is the liquidity of the banks. If that can be maintained then the system can slowly recover rather than crash.
Fortunately or unfortunately ... we shall all see ...
1. It is in unadjusted dollars and the economy is a lot bigger that it was.
2. The current Fed chief Ben Bernanke is famous for his analysis of the Great Depression. His main point is that it could have been avoided if the Fed had injected capital then, as it is now. The theory is that the problem in these situations is the liquidity of the banks. If that can be maintained then the system can slowly recover rather than crash.
Fortunately or unfortunately ... we shall all see ...
(#10850)
Re: The Bad World Economy & You
Money is the opposite of wealth, not by webster's definition but by any economist yes, tying our wealth up in negotiable instruments and bonds takes it out of the sustainable assetsmatthijs wrote:Money and wealth are overrated anyway.
-
brewstered
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Re: The Bad World Economy & You
Debt is modern slavery and it's no accident that the majority of people in the western world are afflicted.
- cloudybutnice
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Re: The Bad World Economy & You
Yes, I'm afraid most of us fell into the 'debt trap' when money was so easy to come by. Each days post brought offers of loans, new credit cards etc. Now the honeymoon is over and reality strikes. There's no such thing as a free lunch.
Having said that, the sun will still rise in the morning, and as my granny used to say "It won't always be dark at 7".
Having said that, the sun will still rise in the morning, and as my granny used to say "It won't always be dark at 7".
- volomike
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- Joined: Wed Jan 16, 2008 9:04 am
- Location: Myrtle Beach, South Carolina, USA
Re: The Bad World Economy & You
Here's another chart for you:
http://www.tradingeconomics.com/World-E ... Rates.aspx
The site is slow (what can I say -- lots of data + ASPX instead of PHP?).
When you look at the USA, its unemployment has shot up dramatically this year. Places with low unemployment appear to be the Netherlands, Denmark, Switzerland, the UK (a big surprise to me), and Japan. (Note recent Netherlands and Denmark data is found here.)
So let's add this up:
- Troops starting to come home probably in February 2009? This will make unemployment lines longer and affect the military supply chain eventually. I really don't think the USA can financially afford to keep the military machine going as strong as they have been.
- Retail sector doing awful now and will probably not meet expectations after Thanksgiving and during the Christmas season. I expect that major name brands will go bankrupt, which also affects credit markets, the retail supply chain, and the stock market.
- In the 30's, Congress could introduce the income tax and the social security withholding that gave them the cash to fund major works and infrastructure projects to get the economy moving again. There's no way Congress can raise taxes on the poor and middle class now -- not without a major revolt in the streets. Taxes in the USA are already high enough. The only way to fund major projects (like infrastructure) to move the economy again would be to raise taxes on the wealthy, pull from our gold reserves, sell federal land, pull from oil reserves, and to cut the fat out of the federal budget.
- In the 30's, many people had the skills to hunt/farm their food, not relying on government handouts. Not so now.
- In the 30's, hydroelectric power was introduced which had a tremendous effect in saving the economy. Later on, nuclear power was introduced and, again, a tremendous beneficial effect. Not so now -- not unless we build more nuke plants. However, it appears we just voted in a no-nuke president. It will take several years and billions of investment before alternative energy resources can come online to help the economy.
- Cerebrus Capital injected a lot of cash into Chrysler when they purchased from Daimler. And now that money has run out. So, I doubt very much any bailout from Congress will do much help at all. So, with or without the bailout from Congress, we can expect the Big 3 automakers in the USA to fold. This will have a devastating effect not only on the USA, but the world economy as well. And it will affect the supply chain and everything else that revolves around the USA auto industry, as well as create enormous unemployment lines. If these 3 fall, I expect USA's 6.5% unemployment rate to shoot to 12%, just as a wild guess.
- I think the mortgage crisis may widen. Take for instance me. I'm paying my mortgage okay. But let's say I wanted to not pay my mortgage. A lot of people are probably thinking that. I mean, they probably think they have the banks down on their knees and the government will bail out mortgages or introduce laws to keep people in their homes. I mean, right now, I bet I could call up my mortgage company, tell them I'm having trouble paying my mortgage, and I bet they would get hot and heavy with me to help me refinance at a ridiculous rate just so that I keep paying that mortgage. That's not good for the bank, but it's better for the bank than one not paying at all. A lot of people are probably thinking that. Some people might just walk away from their home, default on the loan, and just rent an apartment or condo for the next few years until their credit history recovers. I think this bailout creates a precedent that establishes a feeling of extreme chutzpah among mortgage payers, and this may widen the mortgage crisis even more.
In sum, wow, pretty bleak for the USA. The bankruptcy courts will have long lines. The National Guard might get called out with all the chaos. Besides throwing money into gold for a few years, it looks like some good options are to get up and move to Japan, South Korea, the UK, the Netherlands, or Denmark. My wife is a school teacher, and in Japan and South Korea these are in high demand right now and they pay well there. So, right now I'm in a wait-and-see mode.
http://www.tradingeconomics.com/World-E ... Rates.aspx
The site is slow (what can I say -- lots of data + ASPX instead of PHP?).
When you look at the USA, its unemployment has shot up dramatically this year. Places with low unemployment appear to be the Netherlands, Denmark, Switzerland, the UK (a big surprise to me), and Japan. (Note recent Netherlands and Denmark data is found here.)
So let's add this up:
- Troops starting to come home probably in February 2009? This will make unemployment lines longer and affect the military supply chain eventually. I really don't think the USA can financially afford to keep the military machine going as strong as they have been.
- Retail sector doing awful now and will probably not meet expectations after Thanksgiving and during the Christmas season. I expect that major name brands will go bankrupt, which also affects credit markets, the retail supply chain, and the stock market.
- In the 30's, Congress could introduce the income tax and the social security withholding that gave them the cash to fund major works and infrastructure projects to get the economy moving again. There's no way Congress can raise taxes on the poor and middle class now -- not without a major revolt in the streets. Taxes in the USA are already high enough. The only way to fund major projects (like infrastructure) to move the economy again would be to raise taxes on the wealthy, pull from our gold reserves, sell federal land, pull from oil reserves, and to cut the fat out of the federal budget.
- In the 30's, many people had the skills to hunt/farm their food, not relying on government handouts. Not so now.
- In the 30's, hydroelectric power was introduced which had a tremendous effect in saving the economy. Later on, nuclear power was introduced and, again, a tremendous beneficial effect. Not so now -- not unless we build more nuke plants. However, it appears we just voted in a no-nuke president. It will take several years and billions of investment before alternative energy resources can come online to help the economy.
- Cerebrus Capital injected a lot of cash into Chrysler when they purchased from Daimler. And now that money has run out. So, I doubt very much any bailout from Congress will do much help at all. So, with or without the bailout from Congress, we can expect the Big 3 automakers in the USA to fold. This will have a devastating effect not only on the USA, but the world economy as well. And it will affect the supply chain and everything else that revolves around the USA auto industry, as well as create enormous unemployment lines. If these 3 fall, I expect USA's 6.5% unemployment rate to shoot to 12%, just as a wild guess.
- I think the mortgage crisis may widen. Take for instance me. I'm paying my mortgage okay. But let's say I wanted to not pay my mortgage. A lot of people are probably thinking that. I mean, they probably think they have the banks down on their knees and the government will bail out mortgages or introduce laws to keep people in their homes. I mean, right now, I bet I could call up my mortgage company, tell them I'm having trouble paying my mortgage, and I bet they would get hot and heavy with me to help me refinance at a ridiculous rate just so that I keep paying that mortgage. That's not good for the bank, but it's better for the bank than one not paying at all. A lot of people are probably thinking that. Some people might just walk away from their home, default on the loan, and just rent an apartment or condo for the next few years until their credit history recovers. I think this bailout creates a precedent that establishes a feeling of extreme chutzpah among mortgage payers, and this may widen the mortgage crisis even more.
In sum, wow, pretty bleak for the USA. The bankruptcy courts will have long lines. The National Guard might get called out with all the chaos. Besides throwing money into gold for a few years, it looks like some good options are to get up and move to Japan, South Korea, the UK, the Netherlands, or Denmark. My wife is a school teacher, and in Japan and South Korea these are in high demand right now and they pay well there. So, right now I'm in a wait-and-see mode.
- Bill H
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Re: The Bad World Economy & You
Yeah, but the US number at 6.5% is bogus. Anyone who has been out of work for so long that they have given up and quit looking for work is not counted as unemployed. There are other gimmicks cutting that number down. No one knows what the real number is, but it's certainly 8% and possibly closer to 10%.
Re: The Bad World Economy & You
Maybe the outlook for web developers is not that bad. The economic downturn will be much worse for people with low skills working in factories for example. If you've been working on a conveyor belt for 25 years your prospect of finding new work is pretty bad. But if you have some diverse technical skills, business experience and have been dealing with clients you can always be inventive and find new ways to make some money. Even if it isn't enough to pay for that new SUV you wanted or that second plasma TV, my idea is that if your happiness depends on that you have bigger problems then not making enough money.
The simple fact is that the massive debt that has been build up has to be paid back sooner or later. So one way or the other everyone will go through a few difficult years. Hopefully the burden will be spread around in a sensible way.
And last, the current concept the world economy is based on (endless growth), is not sustainable. So sooner or later that model has to be changed. Maybe the current crisis is a chance to do that. Might be difficult to accept, but it's necessary in the end.
The simple fact is that the massive debt that has been build up has to be paid back sooner or later. So one way or the other everyone will go through a few difficult years. Hopefully the burden will be spread around in a sensible way.
And last, the current concept the world economy is based on (endless growth), is not sustainable. So sooner or later that model has to be changed. Maybe the current crisis is a chance to do that. Might be difficult to accept, but it's necessary in the end.
Re: The Bad World Economy & You
While I agree with you matt, the problem lies in the fact of the matter that you are absolutely right. It does not affect the upper class. Since we essentially "vote with our dollar" so to speak, the people who this is hitting home for don't get to have any say. Sure all you may loose is your cable television. For others it will be the 2nd car. For still other's it will be their house. How bad would it have to get before mothers are choosing which one of their children gets to eat and which ones die? This is how it is in a lot of countries.
I agree the rich should not worry about their plasma screens and SUVs, but at the same time the lower class is being hit just as hard if not harder. Don't be the frog that got boiled to death. I'm sure Obama will solve some of this
I agree the rich should not worry about their plasma screens and SUVs, but at the same time the lower class is being hit just as hard if not harder. Don't be the frog that got boiled to death. I'm sure Obama will solve some of this
- volomike
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- Joined: Wed Jan 16, 2008 9:04 am
- Location: Myrtle Beach, South Carolina, USA
Re: The Bad World Economy & You
Yeah, I've heard that if you chart people vs. food, people vs. electricity, etc., people lose every time and not too far down the line. I wonder what the studies would show now if they forecasted from here.And last, the current concept the world economy is based on (endless growth), is not sustainable.
I also read a great book called 1491. It explained how the massive civilizations of Indians lived on very little farmable land by creating milpas. Current scientists are baffled how the native americans (they prefer, actually to be called indians, the book explains) managed to get so much food from so little land, and they are studying it to consider technologies for the future. In the Andes especially they did extraordinary means to keep their civilization alive, requiring workers to constantly move up and down a steep mountainside at an incredible rate. These people were master farmers, way beyond our capability in some ways even today, and yet even they couldn't keep their civilizations from starving eventually. But they tried pretty darn hard. (Sidebar: One of the other controversial conjectures of the book was that the massive rain forests of South and Central America were a product of man, although it did qualify this and say there were arguments on both side of the table of this. You really should read this book if you're interested.)
Re: The Bad World Economy & You
Theres this show 30 days with Morgan Sperlock ( the dude from supersize me ). He goes and lives on some hippy farm and they grew all their own food, used solar energy, etc.. etc.. 110% off the grid ( they sold extra solar generated electricity back to the grid). They calculated their total footprint, still negative. That means if everyone on the earth lived completely off the grid like that we'd still screw up...
Like Carl Sagen says, we need to dedicate 10%+ to space exploration, right now I think its way less then 1% of the worlds resources goes towards it
Like Carl Sagen says, we need to dedicate 10%+ to space exploration, right now I think its way less then 1% of the worlds resources goes towards it
Re: The Bad World Economy & You
Have you watched "Zeitgeist: The Movie"?
There are 10 types of people in this world, those who understand binary and those who don't