Is the economy screwed?

I have thought about that. That is what all those trade imballances really represent isn't it?

A net gain of goods imported over what is exported with the difference paid out with IOU's on future generations goods and services.

re: economy
yep, we're screwed. going deep in debt for consumer goods doesn't make sense, as it doesn't increase the productivity of the economy. going in debt to build a widget factory that makes widgets more efficiently makes sense. our debt boom of the last few years was for building large mcmansions a long way from where the jobs are, which with peak oil, will turn out being a huge misallocation of resources. Of course, bailing out the banks is even more stupid.

re: capitalism
only 2 ways I know of to decide how to distribute resources: capitalism, or having the state decide. If the state decides, then its subject to political manipulation (remember the stories from the soviet union, where some stores were reserved only for the elites? orwell was right, some people are more equal than others.) If the state sets the price, then it will almost always be too high or two low. If you make the price of bread too low to help poor people, then people will waste it, and feed it to chickens. It will also affect the motivations for grain farmers to grow grain vs whatever else they can grow. You can't control just one price without affect others, so then you have to control those other prices too.

--sgl

The economy isn't going to turn around any time soon. The worst is still ahead of us. Watch the market this week for a substantial drop.

I've been looking for a bottom of around $5000, but some say $3000. Predicting the bottom is difficult though. Too much extrapolation. We'll know when it's there when the indicators turn, but not before. It could take a while -- maybe even a year or two.

That said, when the market turns around don't look for the depression to turn around right away. The depression could stay with us for years afterward.

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Nice interest rates, if you can get someone to call you back for a loan. So far, we've had no responses, and others are reporting the same. My suspicion is, the sales are cash buyers. We meet all the requirements for getting a reasonable sum, but no takers. I think banks are lending to businesses right now, not individuals or homeowners.

If you have dollars turn them into hard goods, that you can use to produce.
America was built on production NOT ON CONSUMPTION (ain't that used to be a disease, that sapped the life from your body?, Well guess it moved from people to the USA at large)
The federal reserve (SECRET BANKER'S CLUB, NOT PART OF US GOVERNMENT)will just okay the printing of more worthless paper, bringing down the value of the paper you have stashed.
Now no matter what they do with the currency, your old diesel tractor can still plow the field, even if you have to make oil filters out of old cigarette butts and run on producer gas from burning wood or other material.
How about if they just do away with the currency you have stashed, outlaw it. Gives you X amount of time to trade it in for the NWO cash/ Bama money/Beast Mark?
Rock

The root of the problem is greed and people living beyond their means.

I would propose that this downturn is one of the best things for our country as a whole and is long overdue. Some people call it a "correction". I would simply call it "paying for past sins". Either way, we HAVE to go through this in order to survive.

This economy is going to force people (and hopefully the country) out of debt and will hopefully cause people to stop seeing credit as part of their net worth and quality of life. It will hopefully draw communities back together, will cause innovations in new energy development, and create new local jobs in local businesses. There are tons of obstacles to making this happen, such as changing federal and state laws which prevent successful small farming and the success of small business, but when things finally get bad enough, the policies will change out of necessity.

The loss of all of the major retailers is just the needed start of eliminating excess. Circuit City, Starbucks, tanning salons, kmart/sears. How much of what they sell these days matters and how can we justify in our minds spending $1500 on a tv, $4 on coffee, $100 on a tan, way too much money on bath towels with Martha Stewarts name on them??? All of these are symbols of our greed, and the sooner we get rid of them, the better.

Unfortunately, its like losing weight: it took years to put it on, and to expect it to come off in just a few months is unreasonable. It will take a period of sustained "correction" for us to get back to what really matters and what made this country the greatest on earth.

Irv

Trade in your money for..Ameros??? You can do anything you want but it's their ball. You're working on rented land, first they're taking the money then they'll take the land.

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The reason the real estate sales are up!!! Is they count all real estate transfers as a sale. So a Foreclosure is a sale. Wait till the "sales" figures come out for early 09'. It will be head spinning.

Commodity prices will go back up, but only because of the inflation that inevitably will be created as a result of all this money being printed and flushed into the economy.

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I saw something on television last night that said there were 55,000 jobs lost across the country in just a few hours yesterday. I don't think we can last long at that rate. I know 800 of those jobs were just a short distance from me.

Nomad

Interesting. The bank already owns the house. How can it be considered a sale when they repossess it?

The bank doesn't own it when you have a mortgage. They have a lien on the property and a contract that says you will pay so much a month or get out. LOL

I was blown away when I first heard this too.


And to the previous post about the Unemployment figures. The Feds. have changed the way the number is calculated. So right now I'm sure if one was using the 1970's way of calculating Unemployment we would be over 14%.

Don't worry. We haven't come even close to using one one millionth of the copper, iron, nickel and other resources. Not only that but what has been used can be recycled.

The current recession, even it becomes a depression, is just a blip. Out wait it.

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I was aware of the unemployment fudge figures. That's been going on for a long time. I was not aware of the foreclosures being counted as sales, however.

There are plenty of 'self employed' people around here, many more since the layoffs earlier this decade, and more every month.

The "bread basket" may be in trouble too. As a grain farmer we have only been able to ship a couple of loads of grain because there is a log jam of wheat on the market from last years high prices when most farmers dumped their entire crops on the market. Grain buyers are in trouble as they can't move the grain and they have contracts with a lot of people. We are hearing from fellow farmers up here that they aren't going to grow wheat this year because they still have bins full from last year- it just isn't moving. Also, many of the farmers who got high prices last year for their crops jumped on the credit bandwagon and bought equipment that they can't afford to pay for now as they can't sell their crops. So in short many farmers will go under this year- and as farmers feed the rest of the population this can mean shortages in different areas in the future. For those people who are capable of growing extra veggies and things for sale it may be beneficial to start a local farmers market in your areas as a way of earning an income and also providing fresh local produce to your neighbors. Just a thought.

Can you show where this is described? Reports around here seem to be based on Realtor sales. If all transfers are a sale, then our neighborhood would be on a great upswing since we have already had so many foreclosures. However, published numbers show sales are sluggish at best.

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I will look but it's been a long while since I looked that up.

That sounds bad.



That sounds bad too



Some folks are stupid.



I agree.

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after watching Glenn Beck today and the news past 6 months, I just want to say forget it. I have gotten so totally sick of our government I just want to do a drop out of society move. We are seriously considering walking away from our house.putting up a humble pole home..on our paid for land, have a garden ,some goats, chickens...and quit even trying to play the game. ITs not a fair playing field, When I see ther government giving itself more money for operating expenses..bailing out big business's while americans lose their jobs and homes., sink from medical bills, can't hardly afford to feed their families, all the extravagants spending of a corrupt political system put on the backs of the middle class and we are falling under the burdens...it po's me off.
Tell me..am I crazed to be thinking at 50 what so many hippies in the 60's thought? If ya can't beat em..leave em.?

Capitalism will take care of the scarcity of resources quite fine... those that can pay, will get goods, those that can't will have to do without.

Unfortunately, when oil gets stratospheric again and stays thataway, >90% of humans will have to stop consuming food. When oil runs out, most humans will too.

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