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Your thoughts Gents?
Winners?
Lossers?
Mike
Winners?
Lossers?
Mike
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Re: What will life in the West look like in 2-3 years time?
winners: US, maybe JapanOriginally posted by Mega View Post
lossers: BRIC's
tossers: EU -
Re: What will life in the West look like in 2-3 years time?
I've said it before, but I'll say it again...I think the U.S., anyway, in 2-3 years will be like Houston 1989-1991. Because there are a lot of parallels.
I moved to Houston in 1975, it was in an incredible energy (oil) boom till 1982 or so. The boom lasted so long, most locals assumed the boom was here to stay. (kinda like the 2000's speculation and real estate booms).
Oil in 1981 peaked at $40/ barrel, and the assumption was that it was going to double again, i.e. business decisions were made on that basis. Things started slowing down in 1982-1983, after oil peak, but local expression was "Stay alive till '85". At first, business community could not believe we were in a new era (again, kinda like 2007-2008).
First local oil (oil exploration, then production cos.) businesses went bankrupt, then a real estate bust as people lost jobs and let their houses go into foreclosure (over 50% in my area). Big foreclosure period was really 1986-1988, like 2007 to 2009 seems to be.
Bad business and real estate loans destroyed the local banks and savings and loans, almost all went under or merged into other banks by FDIC. (we are there, 2008-2009).
By 1989-1991, the worst was behind us. But the local economy was low-key and subdued for years after that. There were jobs, but you had to hustle and have the right skills. And many of them were not oil-related, as there was an effort to diversify the local economy. And real estate prices in 1992 for used homes were in nominal, actual dollars the same prices as in 1981.
A moderate recovery was underway, but there was still a lot of residue left over from the bust. (This I think is our future for the next few years, a subdued economy that does limp along and function. But that will be a shocker for people used to the false boom of the 2000's. The infrastructure investments of the future will constitute the U.S.'s efforts at diversifying away from the FIRE economy).Comment
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Re: What will life in the West look like in 2-3 years time?
US winning in the Clinton-style economic revivalOriginally posted by Mega View Post
Aussies, Canucks, the Swiss and maybe Japan -silver medalists doing pretty good
Brits -bronze medal with some luck
Russia and especially China losers big time the rest of BRIC and alike pretty nasty
EMU as we know it today, gone for ever (the PIGS won't have anymore a place at the ECB round table)Comment
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Re: What will life in the West look like in 2-3 years time?
Hey, the BIS is in Switzerland: they wouldn't fk themselves, right?Originally posted by $#* View PostComment
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Re: What will life in the West look like in 2-3 years time?
That's one of the reasonsOriginally posted by phirang View Post
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Re: What will life in the West look like in 2-3 years time?
$#* - I go with your call the US remains relatively the stronger in the next two years, although it will be an ugly ducklings contest. If you imagine oil prices, and hence Russia's healthy balance of payments derived from energy are going to be in the doldrums in three years time I have a bridge in Brooklyn to sell you. :p Yet another glossy gadfly analysis IMO. Lots of good points in it though!
Meanwhile, Chinese vehicle registrations are up 40% over 2007 with the Indians probably looking at that stat with envy and hungering for just as much. :eek: What, and the olympics are over and the world in a catastrophic recession? :eek: ! And Mexico Cantarell, UK / Norway North Sea, Kuwait Burgan et. al. in accelerating decline? Maybe the short sellers in the dark OTC markets will keep the oil price down long enough to pauper the Russians, but I would not put one dime on that bet.
If you mean China GDP will limp along at 6%-8% in a worst case I might agree with you. Otherwise, I think you are going to be incorrect on China as well. Oil supply / demand will be in crisis mode in 3 - 4 years and this lights a fire under all commodity exporters as the oil price drives the entire CRB and CCI. Poor analysis on your part IMO - and I'm merely an amateur critiquing it!
Also, as far as I can discern here, Phirang endorses your call implying the energy and commodity exporter countries right alongside Russia will be dying on the vine here too? Don't know where you guys get the idea energy will be in a bear market in 3 years. It seems downright whimsical looking out at 2008-2014. This is not the first of your whimsical arguments - to my view anyay.
Originally posted by $#* View PostComment
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Re: What will life in the West look like in 2-3 years time?
I think that we are experiencing a great leveling. People will be living, and living well, on a lot less. The economic model for cars will be well on it way to shifting to optimizing utilization and not ownership. Boomer retirees will be moving into suburban ghost towns too far away from anything to be economically viable. Urban but green dwelling is and will be the next boom for people making money.
Agriculturally focused high technology will be the new thing.
Free markets as a philosphy will be decoupled from captilism.
Wall Street is done. A memory.
Local banking will come back. Invest locally, buy globally will be the mantra.Comment
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Re: What will life in the West look like in 2-3 years time?
thinking back on it...we had some pretty bad scares in the 1970s. I was a young sprout back then. But we had closing the "gold window" and USD devaluation, running out of oil scare, the Arab embargo, Vietnam, bad cold war stuff.
So the stuff that's happening today, I'm not sure it's worse really than what happened then. But there is always recency bias, the tendency to see recent events as more important, impactful, or extreme than past events.
I know the 1981 et seq recessions were really, really bad in Caly where I lived. And the 1970s were as well. PhDs pumping gas.
I know someone who got out of law school and couldn't get a credit card without her mom co-signing. And she had great difficulty finding a job even though she was from a prestigious law school.
If you wanted credit, they actually verified your employment! How's that for weird?
There was a time in Caly in the 1980s when they were offering newly built houses at no interest for the life of the loan just to sell them.
All this to say, we've been in bad spots before...Comment
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Re: What will life in the West look like in 2-3 years time?
that sounds awesome, hope you're right. I don't see the bailouts in current form leading to this path though.Comment
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Re: What will life in the West look like in 2-3 years time?
if the us can spend on deficit, why can't china? in my opinion, both economies are similar with respect to consumption, only that china both consumes and manufactures whereas the us mostly only consumes.
Originally posted by Lukester View PostComment
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Re: What will life in the West look like in 2-3 years time?
Touchring - China can spend it's entire 1.5 - 2 trillion hard currency reserves on building out infrastructure that it desperately needs, and which unlike America's mere "infrastructure refurbishment" in China's case is infrastructure that simply does not exist yet. Hence they will get a huge productivity boost out of that infrastructure spending which the US could never hope for.
The European nations which embarked on massive infrastructure buildout after WW2 enjoyed a colossal, internally driven boom that lasted for 20 years.
Anyone who thinks the Chinese will feel "hostage" to the US because they "won't know where to sell their US dollars without crashing the USD purchasing power" is dreaming in my opinion. Right now they face massive turmoil due to the US consumer market imploding, but the avenues to spend that pile of hard currency internally are many, and they all yield massive savings and competitiveness dividends - that feed straight back into China's rank and might in the world.
They would seem to me, much more plausibly closer to simply telling the US to take a hike by rapidly converting their dollar reserves into building out their nation and this would build so much internal momentum as to sail through a global recession. Why not, they need that infrastructure badly anyway!
They need not sell USD on the international markets, and thereby destabilize the USD purchasing power. In a pinch, they could simply acellerate their purchase of international hard assets and put the pedal to the floor completing their internal infrastructure boom at home - Look, in the final analysis, China can spend 1.5 trillion on nuclear energy plants alone, and by so doing gain a massive and direct future cash savings dividend right back from that expenditure alone.
That is called a "cash on cash" investment. And we think they are out of options and "held hostage" by their pile of hard currency?
Originally posted by touchring View Postif the us can spend on deficit, why can't china? in my opinion, both economies are similar with respect to consumption, only that china both consumes and manufactures whereas the us mostly only consumes.Comment
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Re: What will life in the West look like in 2-3 years time?
So, we're back to the same old beliefs....
Debts don't matter as you are arguing they just don't exist. I am aware of Pirhang's arguments in this regard.
We can just create money out of nothing...well believe the USA can...and it does
That despite there are no savings on which to build capital, that any stimulation will cause neither inflation nor extreme CAD's. And if CAD's these can be run into infinity.
That the US doesn't have to change anything except print a few dollars to spend on infrastructure
That the new printed dollars will be regarded by the world the same as after WW2 and will be accepted slobberingly gratefully by all resource (particularly OIL) holding countries
Plus ca change...plus c'est meme choseComment
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Re: What will life in the West look like in 2-3 years time?
Why speculate when you can see it?
Go rent the movies "Soylent green" and "blade runner".Comment
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Re: What will life in the West look like in 2-3 years time?
there's gona to be a bad shake out in china from all that overspending in unnecessary infrastructure like factories and commercial buildings (as opposed to power stations and transportation).
but as always the rich in china will benefit and reap even more wealth, it's the working class that will suffer as exports slow or decrease.
Originally posted by Lukester View PostComment
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