NationStates Jolt Archive

What do you think will happen to the US economy over the next few years? I'm bracing for a Great Depression scenario, but I'm not an expert of finance so I'd like to learn.

Also, what do you think will happen to economies in other industrialized countries, developing countries, etc?

IT WILL SET ON FIRE AND DIE (but more likely recover by about 2012, although since this will be the end of the world, bit of a wasted effort).

Moderate recession, not as bad as the Depression, but not nice at all.

Write off 2009, maybe even first quarter 2010.

Until all the losses are taken and the markets rebuild, nothing will change. Unfortunately, the US has reduced its manufacturing sector so badly that there really isn't much to export, so a fast turnaround is unlikely. There simply isn't another bubble to cushin the blow of the housing bubble.

And if this idea of a bailout for credit card debt happens, write off 2010 AND 2011. Because there's no way we'll have a recovering economy with the gov't continuosly taking taxes to give bailout checks. The country needs job, and I don't mean 20 hours a week at the casino or wal-mart jobs!

Obama has a chance. He has a VERY easy act to follow. If he goes for FAIR (not FREE) trade and doesn't raise taxes too much, the recovery could (barring any other big problems, like say, Korean War 2) be in full swing by the 4th of July or Labor Day.

Everything will get worse and worse, until the year 2012 when the only thing holding the U.S. together will be watching convicted prisoners at the world's lowest security prison compete in a (blatantly rigged) race while killing each other according to rules which make no sense whatsoever.
So sayeth the prophet, W.S. Anderson, who totally called the coming economic collapse.

Base case, I'd say we're looking at a moderate recession in terms of the severity of conditions but a "severe" recession in terms of its duration. Unemployment won't push double digits, but it'll remain elevated for a longer period of time; the same would apply to other economic indicators like GDP, retail sales, personal income, industrial production and so on.

Housing will definitely continue to be depressed for a while, dragging on GDP growth for at least another two years before slowly recovering. I think the huge amounts of fiscal and monetary stimulus pumped in to the economy will lead to relatively faster recovery in the banking and finance sectors, but that it will take time for that recovery to branch out in to other sectors of the economy due to the more conservative attitudes regarding lending and the imposition of new regulations. The first signs of recovery are definitely going to be visible in market volatility, followed by commodities and currencies, then the stock market, and lastly actual economic indicators.

That's how I see it. General economic decline at least until 3Q 2009, followed by a period of stagnation from 4Q 2009- 2Q 2010 followed by accelerating recovery in to a new business cycle from that point forward.

on the plus side, we have a housing surplus so the shanty towns will be rather nice neighborhoods in pleasant locations

*snip* I think the huge amounts of fiscal and monetary stimulus pumped in to the economy will lead to relatively faster recovery in the banking and finance sectors, but that it will take time for that recovery to branch out in to other sectors of the economy due to the more conservative attitudes regarding lending and the imposition of new regulations. *snip*

That's how I see it. General economic decline at least until 3Q 2009, followed by a period of stagnation from 4Q 2009- 2Q 2010 followed by accelerating recovery in to a new business cycle from that point forward.

If you suffer from diabetes then you can trick your system into functioning well for a short while by pumping it full of carbohydrates. In the long term however, this just makes the hyperclycemic crisis worse and longer. That is what I see the injection of stimulus, on the basis of unsecured credit, into the market as being. It was the worst thing that the government could have done - in the long term. But then governments don't do long term, do they?

This crisis will go on deepening and spreading, with occasional mild improvements, until it eventually forces the financial system to be rationalised and overhauled. Many many institutions will go under, millions will lose their jobs as a result, personal credit (mortgage, bank loans, credit card limits etc) will be much tighter and much much more expensive. People will have to live within their means.

Now the question as to whether this leads to Depression or just a very severe recession in the US depends on how good US citizens are at living within their means, and all the evidence to date is that they are constitutionally incapable of this.

If you examine the reference equity declared by institutions and look at just how dependable and real that equity is, you would not want anything to do with the financial system. When you build a huge edifice on quicksand, one day it is going to collapse - that is what is happening in the US, where the regulation of the financial system was, and still is, overseen by groups with vested interests in that system, where the International agreements on risk management where not accepted in their full form (Basel II) etc.

Moreover, the proposed US version contains certain provisions (e.g., maintaining the leverage ratio) that are designed to limit the reduction of capital in US banks implementing Basel II, and that would not apply to non-US banks.
Source (http://www.goodwinprocter.com/basel.html)


In short, the USA has to 'get serious' about tackling the problem of credit, or it will be a long and very dark financial winter.

I shouldn't worry-as new technologies develop, new markets will come into bloom. In actuality, given my own experiences, this seems less a dip in the economy than panic-mongering among the media to support their candidate. I know of no one whom has lost their job, nor any of the other implications of the seventies our economy was in the shitter. Quite frankly, this seems world-wide, as no one is bragging better economy, but I'll withhold judgement. Once the Misery Index resurfaces, I will reconsider...

In 2012, we'll still be recovering from monkeyboy's idiocies. >_<

I know of no one whom has lost their job

you should make more friends

you should make more friends

You assume the friends had a job in the first place

-10 to 20% from GDP, over two to four years. 12-15% unemployment. (Actually if you count unemployment the old way, it's getting up there already, like 9% ish I think.

That is the average for this type of thing.

Of course, this time it is global, and you have to factor in how corrupt congress is, so it will probably be far worse. I wouldn't be surprised if there was a 20%+ contraction in GDP and unemployment at 20%. (Though the latter possibly will not be reported, because they'll do the 'no longer looking' trick).

And of course it has the potential to go all last days of Weimar. Good times.

But in general I think it will do the country some good. People need to think long and hard about certain stuffs, and this will force them into it. Evolution, you can't stop it, you can only slow it down.

http://www.youtube.com/watch?v=PoxlzPGIPt4
well this pretty much explains it...

http://in.youtube.com/watch?v=wzH7AAiqGqs&feature=related
also other nations are rebbeling against u.s.a. sucking their countries bone dry for resources trough multinational companies...

Of course you can forget decoupling. That's a fantasy. Everything is circling the drain. The US is probably going to be one of the better places to be over the next few years.

The dollar will probably get uber strong too.

Cartoon guy opening a wine bottle insisted that we both knew what the market would do, okay, go up and down, and that I should worry less about that and more about where I got my advice-presumably from cartoon guys, I guess.

That's why I'm using Spongebob Squarepants as my financial adviser.

It will be slightly better then the 1970's unless Obama gets all Carter on US.