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Discussion in 'Politics, Religion, Social Issues' started by Prof., Apr 1, 2008.
Is the United States entering another Great Depression? Find out here.
We are definitely in a recession, but I think it is a stretch to say we are entering another Great Depression. At least we are not now, maybe if the economic situation gets considerably worse. I'm not surprised that people believe so. Hell, you'll find people denying that we are in a recession - look at Bush's past comments when almost all economists were saying we were already in one, or just entering one. So, I'm not surprised people are going the other way either now.
recession yes. Could it be a pretty rough one, yes.
Some of the things in the artical are rather worthless. Unemployment hit it highest point in 2 years" for example is a useless argument because it not a long enough time span. Now 20-30 years a bit more useful.
it targeting unemployment is again stupid because it aways been figure that way.
Lastly the US is not entering one because the entire world is not entering one. Look back at history when the Great depression happened most of the world was in bad shape before hand and the US finally fell down with it.
The world would be entering a very bad depression if the US had that happen. To much of the world economy is tied to the US. Yes even the EU would be heavily effected. They relay on a lot of imports from other countries that heavily depend on the US.
*opens a can of worms* remember the economy of the 90's?
I hope the special effects are better this time around. Those monsters just weren't believable. The chase scene was boss though.
The 1930s saw unemployment of 20% or 25%, depending on who you read about those times.
What we are seeing at the moment is a deflation of incomes and asset values. Cities' tax takes are dropping; Vallejo, California, for instance has been discussing bankruptcy, and some Florida cities are in trouble. The decline in home values is commonly known.
For now, we're more in "stagflation", with declining real incomes and rising prices for consumer goods.
I guess the main difference between now and the 1930s is that today's causes are far more complex. Factors include Congress' energy bill with its ethanol component which is driving up the cost of food. Other aspects for food are that there are the drouth problems in some countries--affecting supply, and the increased demand in those developing countries which now have more money to spend on better diets. Oil costs are a mix of speculation, demand, and the falling dollar. We've often discussed the industrial jobs losses; those people aren't now employed at the prior higher wages--which means less disposable income.
Add to all that the credit crunch and lack of liquidity for the operating capital or investment capital loans needed to keep businesses going or for startup. I read yesterday of a several-billion-dollar communications deal which fell through because of an 18.5% interest rate for a $550-million loan. Those with money are avoiding risk in these uncertain times.
How much worse? I've no clue.
Boss??? Good lord! What decade are you from?
Like the term "recession" is not the term "depression" a matter of definition? have we reached the defined conditions for recession yet?
Have we? Show me where the US has had two consecutive quarters of negative growth.
By definition, you can't actually be in a recession until 6 months after it's actually started. Quite the connundrum, eh?
Most economists I've run across recently think it's highly likely we are in a recession, even if the technical definition prevents us from actually calling it a recession yet.
Both the Eurozone and USA are consumer economies. As long as the commodities and imports continue to be priced in dollars or currencies that shadow it the Eurozone should actually benefit from the USA's troubles, enough to shield it from the worst effects of what's coming.
As things stand though I don't think we're heading for a depression at all. The newspapers are overblowing the story to sell a few more copies and the markets are doing their usual over-reacting to the slightest bit of news. However, most of the world is actually in quite good economic shape and ready to absorb the reduction of asset values going on. The USA is definitely going to tip into recession, the UK and a few others are possibly going to follow, and global growth will slow.
But this is no 1930s.
I believe the official standard for depression is predicated on the number of stockbrokers that need to be shoveled off the Wall Street sidewalk. As that number stands at approximately zero, we still seem to be in fair shape.
I'm no economist, so forgive this rather naive view, but surely a recession isn't necessarily a bad thing? It looks like the economy of the past few years has been far too heated, with the prices just rising and rising and credit debt mounting, the economy needs to enter some sort of correction.
Forcing people to tighten their belts and banks to actually think about who their lending too can only be a good thing. Also, if it forces the price of houses down then good. Property owners have been enjoying the benefits of an overlong boom and now I hope its time for a previously excluded generation to have a chance of entering the market.
Unfortunately I've already suffered from this predicted (or happening) instability. I was accepted for a loan to pay my Masters fees last summer. Now that its actually come round to paying them, my banks informed me that they won't lend me the money (despite my unblemished credit rating). So obviously I'm f**ked.
A free market economist no doubt.
Looks to me like the CPI oughta be applied to the GDP. We'd probably have the necessary quarters of no-growth or contraction. It would be even worse if we used real inflation numbers...
With estimates as high as another $300 billion or even more of write-downs of bad paper, I don't think the media is exaggerating all that much. And with the Fed accepting junk paper for the loans, our currency will drop even more. Grade Z junk is junk, no matter who owns it.
FleurDuMal's problem is becoming commonplace. Lenders are avoiding risk. They're scared, and the fear is trickling down from the big financials to the smaller banks...
So are home values, employment figures, buying power, stock values, consumer confidence, and other factors.
Well, for some people it is. But I don't think it's quite as bad as it was in the 30's. It is bad though.
If we are in a 'Great Depression' with 5.2% unemployment, where does the Eurozone stand, with 'record inflation', and 7.1% unemployment?
Exactly where it stood before, since neither of these measures has anything to do with recession or depression.
We're nowhere near in any "Great Depression". IMO, the deal is, we're in a period of downward trends in employment and asset values, with rising consumer prices. "Stagflation". Now, how long the trend will continue, and how far to the bottom? Nobody really knows.
Seems to me about all anybody can do is shrug and figure that it's gonna get worse before it gets better...
Given the numbers about personal debt and lack of savings, a lot of folks are gonna hurt...
Since it is very difficult to have economic growth with high levels of unemployment, is there not some relevance to those measures?
The trend of unemployment in the Eurozone is still downwards. It has only stopped decreasing for one month.
As for inflation creeping up, with rising grain, rice and oil prices that's hardly a surprise.
Here's a nice quote from that article BTW:-
I've said this repeatedly here and elsewhere. Out of all the major economies the Eurozone is best placed to ride this storm.
The trend may be downward, but wait and see what happens when fewer Americans choose to buy expensive EZ luxury items, and take their vacations in the US or Eastern Europe, rather than EZ countries. If you think a US slowdown doesn't affect other countries, ask a Canadien about the current state of their lumber industry.
Soon, outsourcing to China will hit the EZ countries, as well. Even Dr. Martens are made in China now.
Extremely bad comparison. Canada is virtually totally dependent on the USA for its trade, whereas the Eurozone countries overwhelmingly trade with each other. Outsourcing in the Eurozone has also already occurred, some to China and India but mostly to former Communist states to the east. The same states that are now thinking about joining the Eurozone themselves.
Has it occurred to you there's a reason why the Euro is the currency the smart money is running to? Their exposure to the credit crunch is much lower than any other major economy, and due to the ECB's stringent requirements for Euro membership the economies of the member states are run with minimal debt and on sound financial footings. I wish the UK had joined the Euro. We'd be much better off for it.
BTW, Dr. Martens is a UK brand. They haven't been German since 1960.