So are we looking at another recession, another stock market tumble?

[Argus]

Reading a few business pages on the weekend was not encouraging for any investor. Whether it's the Hindenburg Scenario predicted to come into play as early as tomorrow - or at least by mid September, the likelihood of a second huge wave of foreclosures in the US, or the growing combined deficts of the US government and states along with their underfunded medical and pension systems, pesimism seems to be growing. Growth is slowing, and there's no bright lights on the economic horizon that anyone is pointing to.

I know I've been pesimistic for quite some time, and have been gradually shifting over from equities to bonds, and I'm certainly far from alone there. It's ironic that the pesimism is causing people to buy US Treasury bonds given that much of it is due to that country's awful financing picture.

[Topaz]

Just who was it that said having a global ecomony was a good thing?? Good for who? Not the workers in North America, most have gone south to Mexico and the only way jobs would come back to Canada and the US is to have a law, if you export in, you have to make here in North America, the Auto Pact did just that but they got rid of it and now manufacturing sector is losing jobs and putting people on welfare. So if government polices are going to put people out of work then they better come up with the money to support them. Some of the workers that lost their jobs had to cash in their RRSP's to survive and some don't have anything left. Right now, nothing looks that bright for most average Canadians and Americans.

[Michael Hardner]

Just who was it that said having a global ecomony was a good thing?? Good for who? Not the workers in North America, most have gone south to Mexico and the only way jobs would come back to Canada and the US is to have a law, if you export in, you have to make here in North America, the Auto Pact did just that but they got rid of it and now manufacturing sector is losing jobs and putting people on welfare. So if government polices are going to put people out of work then they better come up with the money to support them. Some of the workers that lost their jobs had to cash in their RRSP's to survive and some don't have anything left. Right now, nothing looks that bright for most average Canadians and Americans.

The idea is that lower tariffs allow countries access to markets, and allow countries to specialize in what they're good at. There are winners and losers with global trade, but overall the costs of producing goods falls, so there's a general economic benefit.

The idea is that governments should see to it that the benefit is spread around. In Canada's example, it would mean that the government should help people retrain, relocated and generally adjust to move to those industries that do better under global trade.

[maple_leafs182]

For a while I was thing inflationary depression but I now think it will be a deflationary depression.

[Bonam]

I'd love another economic dip... just another chance to buy good stocks at rock bottom prices, now that I've got a lot more savings to do so with than last time.

[Radsickle]

I'd love another economic dip... just another chance to buy good stocks at rock bottom prices, now that I've got a lot more savings to do so with than last time.

Ever wonder whether these rumours are started by those who own the stocks or gold/silver and just want to create a `buying frenzy' to further their own gains?

[Bonam]

Ever wonder whether these rumours are started by those who own the stocks or gold/silver and just want to create a `buying frenzy' to further their own gains?

Shrug, I'm sure a lot of statements released via the media are finely tuned by their sources to achieve some end or another. One of many reasons to take everything you hear with a grain of salt, especially when it comes to economic forecasts (where usually no one has a clue even if they aren't trying to deceive you).

In regards to your statement, owners of stocks would likely want to stimulate, as you said, a "buying frenzy": that means putting out "rumours" that the economy is getting better and stocks are gonna go up. It is people who want a chance to buy at low prices, or hold short positions, that would want stocks to go down and thus put out negative economic rumours, in the hopes of creating a "selling frenzy". Whether this type of media manipulation is actually done to any substantial extent, I don't know.

Back to the topic, my opinion is people need to stop worrying about the recession and the state of the overall economy and instead just focus on their own lives, keeping their budgets balanced, putting away savings, doing everything they can to keep or find a job.

Edited August 27, 2010 by Bonam

[Radsickle]

and stop listening to the American AM radio pundits who tell you the world is coming to an end every week.

[Yesterday]

For a while I was thing inflationary depression but I now think it will be a deflationary depression.

I think I would rather a deflationary depression right now as opposed to an inflationary one. Perhaps my understanding is too simple but the cost of everything is way too high after the expansive late 90s into the 2000s and if the rumours for a reset for the US dollar are real the cost of living is going to have to come down. A lot. Not just in the US but for every country with currency tied to the US dollar. I have no doubt that it is going to be a ride from hell so hang on.

[Shakeyhands]

I'd love another economic dip... just another chance to buy good stocks at rock bottom prices, now that I've got a lot more savings to do so with than last time.

Speculation is what got us here in the first place in a lot of ways. It's something for nothing disease. Simplistic? Yeah, but it rings true.

[M.Dancer]

Ever wonder whether these rumours are started by those who own the stocks or gold/silver and just want to create a `buying frenzy' to further their own gains?

No....because the effect is to lower stock prices by having more sellers than buyers...it is a selling frenzy, not a buying one....and those who sell invest elsewhere.

The only ones who can gain in a selling market are those who are liquid...and those who are liquid will be very careful investing in equities in a bear market.

[Shady]

We definitely might be looking at another recession. American 2nd quarter GDP was revised down from 2.4% to 1.6%. If that continues, it might pull us down as well.

[maple_leafs182]

I think I would rather a deflationary depression right now as opposed to an inflationary one. Perhaps my understanding is too simple but the cost of everything is way too high after the expansive late 90s into the 2000s and if the rumours for a reset for the US dollar are real the cost of living is going to have to come down. A lot. Not just in the US but for every country with currency tied to the US dollar. I have no doubt that it is going to be a ride from hell so hang on.

Well there is a lot of bad credit out their right now, I think there will be a lot of defaults coming up which will shrink the money supply causing deflation. Then again if the US government keeps bailing out companies and stimulating the economy, I could see inflation happening.

[Yesterday]

Well there is a lot of bad credit out their right now, I think there will be a lot of defaults coming up which will shrink the money supply causing deflation. Then again if the US government keeps bailing out companies and stimulating the economy, I could see inflation happening.

What I am concentrating on is the discrepancy involving the inflow/outflow sheets for the US last year coupled with the 9% reduction in currency velocity (contraction?). Put that together with the fact that the outflow sheets are not showing true a true balance due to the fact that inflow sheets are showing enough movement due to private investment to offset the real outflow balance which if the paper I listed on the Boom thread is correct a massive outflow would cause a major velocity disruption. I think it might be, which would explain the government push to hide and/or discount the velocity measurement of M3 at present. I don't know though if I understand this correctly or not. This outflow issue would in my opinion be a bigger factor in the true shape of the US dollar than anything. To see this reduction in velocity in the face of so much government spending. Makes me wonder why. I wonder if all the gold/asset (non-debt) backed currency the banks can procure for lending to the government is tied up in backing up US federal international debt and all the fiat money being used in the bail-outs is having an effect in part on the inflow sheets as banks (private)use it to purchase good assets off the fed balance sheet to show movement and to use for loans to keep some semblance of currency movement across the country. I have a good imagination...

I kind of wonder if in part the price of gold is reflecting this outflow volume, in order for the US to handle the outflow requirement they are trying so hard to hide, the price had to skyrocket. Sort of like the IMF situation?

[bush_cheney2004]

and stop listening to the American AM radio pundits who tell you the world is coming to an end every week.

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[Peter F]

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[Yesterday]

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>><<>><<>><<>><<>><<>><<>><<>>.^^^^^VVVVV^^^^^VVVVV.<<>><<>><<>><

[Yesterday]

I am really curious about the ability of the IMF to call a standstill. The ability to stop creditors from pulling credit on a country while it restructures itself to handle the crunch. I really have to wonder if this is not what we are looking at in the US.

Things like the trillion dollar callable payment owed to the IMF by the US give the IMF a vested interest in US finance and it should be impossible to guarantee the US member standing in the face of such a huge balance of back payments owed to them.

In my opinion, watch the IMF for signs of resolution before you think we are headed to safer waters. It would surprise me, a pleasant surprise, to see much change till we see the member standing revision that is supposed to happen next year.

I find it an interesting scenario that banks in both the US and here in Canada are calling for more bail-out money. To me that is a big sign that the standstill is still in place.

Edited August 28, 2010 by Yesterday