Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Why do you think we will have to deal with stagflation? I can understand a worry about inflation, but stagflation?
We will have limited or low growth because I don't see any reason for the country to grow. Many consumers were living beyond their means and continued to live beyond their means through the recession and we will continue to see foreclosures in residential real estate due to lay offs, cutbacks, debt, and lack of savings.
Commercial real estate is also failing. It experienced a slight boom in some areas after the nationwide plunge. A lot of commercial real estate was being propped up by first time business owners but a business can operate at a loss for only a certain amount of time. Small businesses are struggling and many have already folded.
Retail will take a huge hit in the 4Q. Many of the people that I have talked to also expect most retailers will have horrible earnings due to lack of disposable incomes. There are too many unemployed and underemployed to expect decent earnings.
I also expect travel to be down in 4Q. Hotels, gas stations, airlines, car rentals, and all other travel related businesses will not see the same amount of traffic they did during 4Q last year for the same reason retailers will suffer.
Auto sales will continue to rise as long as the clunkers program continues to pay up. When the well is dry auto sales will fall. We traded a moderate amount of long term sales for a large amount of short term sales.
Construction will not increase much at all because supply of housing and commercial real estate far exceeds the demand. I expect supply to grow at the same rate as demand (not much at all) leaving a large surplus of real estate on the market.
Some areas of tech will also take a hit. Less people will be spending $500 on cell phones and replacing PCs for more cores as they see their incomes shrink and the possiblity of becoming unemployed or underemployed rise.
Consumption of inferior goods will definately be on the rise but most of those goods are imported from Asia so we won't see much benefit from them.
Mortgages, taxes, credit cards, car payments, groceries, and insurance are chipping away at that disposable income. People that were saving before are probably still saving and people that were spending are probably wishing they had saved instead.
I don't see how legislators will pull us out of this. They would have a hard time if they had actually studied economics. Most of them seem to think healthcare reform is more important than fixing the economy so I don't expect them to pull us out of the downward spiral anytime soon. I hope I'm wrong.
Edit: Forgot to mention inflation. I don't see hyperinflation but I do expect high inflation (not over 10%).
We will have limited or low growth because I don't see any reason for the country to grow. Many consumers were living beyond their means and continued to live beyond their means through the recession and we will continue to see foreclosures in residential real estate due to lay offs, cutbacks, debt, and lack of savings.
What about the depletion of inventory. Companies cut so far down on production that they now have a problem meeting consumer demand. They pretty much have no choice but to increase production which means more hours and the more workers.
Quote:
Originally Posted by Majordomo
Commercial real estate is also failing. It experienced a slight boom in some areas after the nationwide plunge. A lot of commercial real estate was being propped up by first time business owners but a business can operate at a loss for only a certain amount of time. Small businesses are struggling and many have already folded.
Very true, but during a down turn is a good time to start a new business. Unfortunately for those that fail there loss is an opportunity for someone else to step in make money. The banks are starting to loan again to people starting small businesses.
Quote:
Originally Posted by Majordomo
Retail will take a huge hit in the 4Q. Many of the people that I have talked to also expect most retailers will have horrible earnings due to lack of disposable incomes. There are too many unemployed and underemployed to expect decent earnings.
Very well possible, but stagflation is high inflation and low job growth. Do you see the inflation in the near future so extreme? If so what is it that is leading you to believe so?
Quote:
Originally Posted by Majordomo
I also expect travel to be down in 4Q. Hotels, gas stations, airlines, car rentals, and all other travel related businesses will not see the same amount of traffic they did during 4Q last year for the same reason retailers will suffer.
I agree that travel and related spending will be down. I don't understand how anyone wouldn't have thought so before and how there is/was anything that could have avoided it.
Quote:
Originally Posted by Majordomo
Auto sales will continue to rise as long as the clunkers program continues to pay up. When the well is dry auto sales will fall. We traded a moderate amount of long term sales for a large amount of short term sales.
Thats a possibility, but cash for clunkers ahve definately provided stimulus to the economy. One can expect that the administration will enact fiscal and monetary policy necessary to combat this. I really don't see the link, as far as my opinion goes is that if americans are doing well financially they will spend and buy.
Quote:
Originally Posted by Majordomo
Construction will not increase much at all because supply of housing and commercial real estate far exceeds the demand. I expect supply to grow at the same rate as demand (not much at all) leaving a large surplus of real estate on the market.
The inventory is starting to shrink, but yes the market was very bloated, but that doesn't mean that other economic areas won't grow and either unemployment or inflation will slow and stagfaltion will not occur. Economics is not a predictable science, but how well you predict and respond to what occurs in the economy.
Quote:
Originally Posted by Majordomo
Some areas of tech will also take a hit. Less people will be spending $500 on cell phones and replacing PCs for more cores as they see their incomes shrink and the possiblity of becoming unemployed or underemployed rise.
ncomes have been shrinking since the early 70s and I see people living within their means as a positive for the economy.
Quote:
Originally Posted by Majordomo
Consumption of inferior goods will definately be on the rise but most of those goods are imported from Asia so we won't see much benefit from them.
I would love to see the manufacturing in this country take off again, but for that to happen we would have shrug off alot of corporate money in politics, so that isn't likely.
Quote:
Originally Posted by Majordomo
Mortgages, taxes, credit cards, car payments, groceries, and insurance are chipping away at that disposable income. People that were saving before are probably still saving and people that were spending are probably wishing they had saved instead.
Saving has been down for a long long time and is actually up now.
Quote:
Originally Posted by Majordomo
I don't see how legislators will pull us out of this. They would have a hard time if they had actually studied economics. Most of them seem to think healthcare reform is more important than fixing the economy so I don't expect them to pull us out of the downward spiral anytime soon. I hope I'm wrong.
I hope you're wrong as well, but omnly time will tell.. Most thought that Clintons policies were going to lead to economic disaster and the opposite happened. Thanks for the reply. I remeber when these good debates were more common here.
It's not "meaningless" and in fact is exactly the way recoveries work. Employment is a lagging indicator that doesn't turn around until a recovery is well underway. That's nothing new.
Home prices are not "falling at record levels" and in fact the opposite is happening. Home prices have stabilized in most areas and are even edging up slightly in some small pockets. There are always localized exceptions, but in general, the consensus of opinion is that the housing market has bottomed and is on the way back up, although slowly.
The good thing about this is we will know for sure next year at this time, won't we? We will know for certain whether Obama's fiscal policies worked or not if we see greatly lowered real unemployment rates.
I think the president wants to drag out both this opportunistic crisis mode and the recession and flip us right into inflation. this way his trillions in debt won't be so bad, and he can suck inflated money out of taxpayers, sort of like a tax increase to pay off the debt he is creating, without actually having to raise taxes.
I have been wondering how many people the health plan will cause to be unemployed. My husband says that no one is going to keep insurance for their employees when they can get it from the government. I hope he is wrong, but I fear that he is not. So at a time when we have high unemployment, the government does something to cause more unemployment.
If our economy totally crashes, does that mean that everything will end up belonging to the government? Some of us are smart enough to see what is happening. Yeah, you got your change. I prefer dollars myself.
The good thing about this is we will know for sure next year at this time, won't we? We will know for certain whether Obama's fiscal policies worked or not if we see greatly lowered real unemployment rates.
After his last fiasco at predicting where unemployment would be the administration has smartened up and is not talking about it anymore.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
