World economy

Discussion in 'Off Topic' started by kerf, Nov 20, 2008.

  1. kerf

    kerf Guest

    I heard on the BBC tonight that 187,000 businesses in China have closed this year. This is looking more and more like a world depression not a recession. Deflation is occurring here as we speak, that's much worse than inflation. I wonder if the HT supply will be affected and if they are available what the pricing will be. Of course, we may not be able to afford them even if we can get them.
     

  2. SimpleSimon

    SimpleSimon Active Member

    The important questions to ask about that number are two: 1) How many businesses were founded in the same period?; and 2) what are the sources of the statistics?

    New start-up businesses fail, constantly, in any business environment. It is by far the minority which succeds well enough to last 5 years.
     
  3. bluegoatwoods

    bluegoatwoods Well-Known Member

    SimpleSimon makes a good point about making sure those numbers are in context.

    And the worst-case scenario on this economic shakedown are frightening. But worst-case scenarios are frightening by definition.

    So how do we figure out if this really is the big one? I don't know. But the signs aren't good. I sure looks as though actual deflation is becoming a reality. It's the first time in my life.
     
  4. Pablo

    Pablo Motored Bikes Sponsor

    I think humans can talk themselves into anything.
     
  5. SirJakesus

    SirJakesus Guest

    WooHoo! The big borrow and spend party is OVER!


    This is all by design. The instability in the markets and retarded ideas like the "service economy" are just ways for certain insiders to reap massive profits at the expense of everybody else. And, no, Obama isn't coming to our rescue. He's just another pawn of the international fractional reserve banking system that holds debt slavery over everybody including our government. He wouldn't even be able to bring back the soup lines unless he got a loan approval to do so. The whole system is corrupt. Turn off your TV and read some banned books please.

    Ron Paul warned of this, its too bad not enough people listened.
    Economic recovery in 3 steps. 1. Destroy the federal reserve and bring back the issuance of money to congress, where it belongs. 2. Loans should be made interest free, usury is morally wrong and will destroy our civilization. 3. Massively Reduce taxes, spending and all government bloat. This country was founded on self reliance and hard honest work. Why should we now encourage entitlements and the transfer of money from those who work to those who don't? There are too many problems to list here, it's just mind boggling to even think about how screwed up this empire is. Seeya on the way down!
     
    Last edited by a moderator: Nov 21, 2008
  6. Mountainman

    Mountainman Active Member

    business -- not knowing how rough it is

    yes -- I've heard that it's only about one out of four
    that still have their doors open after 5 years

    so many think
    that's cool I'll just open my own business
    not knowing how truly rough it is...

    as we ride that thing
     
  7. Happy Valley

    Happy Valley Active Member

    There is an old adage 'When the US sneezes, the world catches a cold'.

    The newly minted factory workers in China, with the recent taste of upward mobility still lingering, will only reluctantly return to small plot rice farming. And those will be the lucky ones. The PRC central committee is going to have it's hands full with that.

    Factories closing in China and yet a story today about a Chinese steel mill tripling iron ore orders.

    http://www.bloomberg.com/apps/news?pid=20601081&refer=australia&sid=ar8_dY1zxtz0

    It's tough going backwards and historically has often resulted in a ramp up to miltitarization.

    http://www.voanews.com/english/archive/2008-03/2008-03-03-voa63.cfm?CFID=68172489&CFTOKEN=18695241
     
    Last edited: Nov 21, 2008
  8. SirJakesus

    SirJakesus Guest

    If I were the Chinese I'd be ramping up for war too. When the economy tanks massive wars always ensue... and we've been spending more than the rest of the world combined on "defense" for decades now. The Russians have recently demonstrated that they shalt not be f&$ked with too. It's gonna get ugggggly. Guns, water and canned food folks :)
     
  9. kerf

    kerf Guest

    If the BBC report were the only indicator, I would be totally dismissive but it's not. The Dow is down to 1997 levels and unemployment is expected to be at 8% by the year end. This year was my best business year ever but at the end of Sept. everything stopped. I'm still in business but technically unemployed, without any unemployment benefits, of course. In my rage and anger, there have been some bright spots.

    Since it was announced, I've been unsure about the mortgage bailout, finely deciding it was a bad idea. The good news is it's not going to happen and I don't think it ever was going to happen. I believe the Administration has screwed Congress one last time and I think this plan for the 700 billion has been on the drawing board for a while as a double cross.

    In the ninety's, Japan went through a devastating deflation cycle, in which the government did nothing. Finely around the end of the decade, they made a massive infusion of cash into their capital markets, which broke the cycle and their economy straightened out. The Bush Administration sold this as a mortgage bailout because that was the only way they could get it passed. The caveat was, however, that Secretary Paulson had total unquestionable discretion as to how the money would be spent. They have begun to infuse this money into our capital markets and I believe that was the plan all along. I do feel better now that this has happened even though Bush had to resort to trickery to get it done.
     
  10. RATRODER

    RATRODER Guest

    You know all this talk about deflation,inflation,bailouts,politics makes interesting reading,
    but accomplishes about the same thing as scratching fleas on a stuffed dog.
     
  11. kerf

    kerf Guest

    Well, it's getting cold and a little interesting reading isn't necessarily a bad thing. While there are some political aspects to these issues, I will stay from partisan politics. In the current situation, I'm not particularly impressed by either party since there is plenty of blame to go around. Also, this isn't just an issue for the USA, as everyone around the globe seems to be affected. Anything that happens in the US markets, good or bad, should be of global interest because it will have global impact. This is truly an issue that we all have a stake in.
     
  12. SimpleSimon

    SimpleSimon Active Member

    Well said.

    As for capital infusions into the marketplace to stop deflationary cycles, well and good. There are two key factors missing in that equation as applied to the US economy at this time, however. The Japanese govt had the guts to wait till the cycle had nearly bottomed out before attempting the infusion, and when they did so they had the capital available to do so.

    Neither is true at this point in the US economy. We have barely begun deflation, and we DO NOT HAVE THE CAPITAL. Simple as that - the capital accumulated in 200+ years of building the biggest and most productive industrial economy in human history was spent in an orgy of credit abuse and exportation of our industry. Wealth comes from production - the combination of material and labor to create products worth more than the feedstock and the labor itself are worth individually. We have (some of) the feedstocks, and we have some of the labor, still. What we don't have are the facilities and the tooling to usefully bring the two together - we've sold virtually all of them.

    In the 1950's through the mid 1960's this nation could rather readily outproduce the rest of the planet combined in virtually every industrial process. With the creation of "The Great Society" programs of the 1960's we began creating a culture of entitlement, and rather than invest capital in modernization of industry we began exporting that industry on an ever increasing scale. By the late 1970's that process of de-industrialization was in full swing - selling capital assetts to fund consumer spending. For the last 30 years it has accelerated, and now the back wall of that storehouse has been reached, and we are faced with selling the racks and the light fixtures.
     
  13. arceeguy

    arceeguy Active Member


    I agree 100%. For us to rebuild and undue the policies of the past, we must reverse the "culture of entitlement" that government has fostered. We must make a "business friendly" environment here in the USA, and the jobs will come back. This doesn't mean tariffs and taxes to make imported goods expensive, but reasonable wages for manufacturing jobs that will allow workers to earn a decent living yet keep American products reasonably priced and still be profitable for the company. OSHA along with labor laws have made labor unions obsolete, so unionized labor should be outlawed IMO. Every employee, whether in manufacturing, management, or engineering should be working for the success of the company. What we see now is the result of labor and management fighting with each other for decades. Both making deals that were not sustainable in the long run.

    Americas "equal opportunity" for everyone has been warped to "equal results" for everyone, regardless of effort. This is a direct result of the entitlement culture you refer to. I think what we're seeing here is the "reset button" being pushed, and our economy going through some sort of a "reboot". Hopefully, we won't "blue screen" again for a long, long time. I for one am ready for some lean times. Glad I have no car payment and no credit card debt! Sucks that my wife lost her job, but then again, I lost mine in 2001 with the "dot com" bust. Sure we had some tough times, but I found another job and have other business ventures generating income also. Lesson learned was you need more than just a "day job" to really be financially secure.
     
  14. kerf

    kerf Guest

    I don't think we will see any drastic changes to the body politic but there is more work ethic than you realize. Small business accounts for most jobs and there is no bailout, no handout for them. Good business management will see them through and the economy will recover, when is the question. There is the underlying law, I call it Darwin's Business Law and you will see it in action in the upcoming months.
     
  15. arceeguy

    arceeguy Active Member

    I do realize that there are some very hard workers. And you are absolutely right that small businesses employ many of those workers. Problem is that our progressive tax code punishes those that produce the most - and that lop-sidedness is about to get worse, not better. Why? That "entitlement culture".
     
  16. kerf

    kerf Guest

    arceeguy,
    I am a small business, LLC to be exact. I don't pay any tax as a business, my customers pay every nickel. To my customers and all customers across America I say, too bad but I didn't vote for things to be this way.
     
  17. arceeguy

    arceeguy Active Member

    BINGO!

    When you increase the cost of doing business (through increased taxes, constrictive regulations, etc) the business passes those costs to the consumer and consumer costs rise.
     
  18. kerf

    kerf Guest

    Don't you just love inflation.
     
  19. Skyliner70cc

    Skyliner70cc Active Member

    Yep, the current tax code punishes productivity and self-advancement. I could easily earn 50-60k in overtime in my career field but the added taxes I would pay doesn't make it worth my while to be away from my family.
     
  20. seanhan

    seanhan Member

    Better Get those M/B's ready to go !!!
    As soon as Iran's nuke facility get's bombed there will be A all out war in the middle east that will result in the oil supply being cut off, so we will only have our own oil that we can't produce fast enough to match demand, So gas will be $ 10.00 a gallon of course most people will be unemployed due to the current condition that will get worse. We might even have to take the engine's off and start peddiling !!!
    "The Future so bright I gotta wear Shades" ( and a gas mask ) ...
     
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