Where do you see our economy going in 5 years? - Page 2

[mar123]

Very interesting thread. One thing though about oil. We will not see shortages anywhere near that soon. The current leak in the Gulf, if not stopped would gush hundreds of millions of barrels of oil for 7-10 years. it is the largest find ever in US waters and there are more like that. Harder to get to, that is true, but the reports the oil companies use to project for the future do not show any type of reduction at all.

[A&A]

Originally Posted by mar123

Very interesting thread. One thing though about oil. We will not see shortages anywhere near that soon. The current leak in the Gulf, if not stopped would gush hundreds of millions of barrels of oil for 7-10 years. it is the largest find ever in US waters and there are more like that. Harder to get to, that is true, but the reports the oil companies use to project for the future do not show any type of reduction at all.

Supply won't keep up with demand. Even a little difference between demand/supply will cause havoc with our economic system.

[mar123]

I have to disagree with that; I think it will. Between the investments in alternative energy combined with the oil available, this is not what will harm the economy. That doesn't take into account the current moratorium on drilling- THAT will cripple the economy b/c that areas provides 30% of our energy needs.

[amma_mama]

Speaking as an economist by profession (in other words, I know as much or as little as anybody on what the future holds ), I think that we have made it through the major shock but potentially face a "lost decade" of slow growth and general economic malaise. Not catastrophic but not good news either. The required belt-tightening (for individuals and businesses) may turn out to be positive as our previous path of debt and overconsumption was unsustainable. The US will also need to come to terms with the changing

Responding to a PP, we will NOT run out of food. Some foods may become less affordable as people tighten their belts, but there is enough food production globally - politics and poor policies are what keep food from reaching people in need, not the lack of adequate production.

I do agree with the potential for crumbling infrastructure and this is where government can make a positive contribution to offset the future costs of current deficit spending - investment in public works for core infrastructure (hard and soft, the latter being health and education) will create jobs now and ensure that our country has a strong backbone that will promote a stronger and faster recovery, setting the stage for renewed growth and innovation.

We just bought our first house and are feeling confident of our own personal finances. DH and I are, fortunately, in a business that is not generally hard hit by the poor economy...it has actually generated more work in our area of expertise (we are both international development economists) as we work with developing countries to continue the positive path of economic liberalization in the aftermath of the global crisis. Our own country would do well to adopt the policies that our government (though the US Agency for International Development) pays us to advise for others.

[marimara]

Most Peak Oil theorists talk about how Cheap oil is coming to an end. There is oil, we just can't afford to get it. That will harm the economy. We've used up all the easy to get, cheap oil. Plus, as A&A said, demand is growing out of control worldwide. Try reading Jeff Rubin, he does a good job of explaining it in his book, Why your wold is about to get a whole lot smaller-Oil and the end of globalization. Here's a review of sorts of the book.

[~Boudicca~]

Exponential growth+increasing demand+costly and difficult to extract resource+crumbling infrastructure+too little investment in alternative energies early on= we're screwed.

That's my take on it.

[A&A]

Another article from the NY Times:

http://www.nytimes.com/2010/07/04/yo...e&ref=business

"The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end, he said. That unraveling, combined with a depression and deflation, will make anyone holding cash “extremely grateful for their prudence.”

[A&A]

Krugman says we're already in a depression:

http://www.nytimes.com/2010/06/28/op...ef=paulkrugman

[meandk0610]

i keep wondering (and not wanting to think about) how the drought will affect crop/vegetable/everything prices later this year. and what affect that will have on communities that are already seeing a large increase in the number of families on assistance and the lessening of families donating to food banks.

i'm also wondering why the BP leak doesn't seem to have any affect on oil prices. was that oil find not in development yet or are prices being controlled?

[bluebirdiemama]

Originally Posted by velochic

I don't worry about hyperinflation. Hyperinflation, the realistic definition of it, is something like 50% increase per month. In recent history that has happened in only a handful of countries. I lived in Russia during the 90's and even there, it wasn't "hyperinflation". It was simply high inflation. Dh is from Turkey and they had high inflation there in the late 90's/early 2000s. They had to keep reprinting money dropping zeros off of the lira. Again, just high inflation.

I was browsing the library one day, completely unable to find something light and fiction to read, and ended up borrowing, of all things, The Rise and Fall of the Third Reich.
I think the most accurate way to read current events is to look to history. "Those who don't know history are doomed to repeat it". Well, you only have to read the first 150 pages or so to see that everything we have done over the past several years, including the Bush admistration, is very, very, shockingly similar to what happened in Germany before the currency hyperinflated until it was completely worthless. It was during the chaos after the fall of the currency that Hitler took power.

My honest opinion is that (and the following is a fact) since the economies of the world were purposely linked together following World War II (to prevent another world war-- the theory being one country will not attack another if their economy depends on them) we are currently staying afloat. But IMO the whole thing is built up as a house of cards. Their is no foundation for the value of anything, there is only the value that people 'have faith' that there is. So, when the trust in the currency runs out, so does the value.
I don't know if it will be in the next five years, but I really wouldn't be surprised if it was, I see the American dollar hyperinflating to completely uselessness.

The precautions we have taken are basically just food and water storage, keeping some cash in our home, buying some gold and silver, and having means to make our own medicine--such as colloidal silver, and having healing herbs on hand.
I really want more than anything to buy land, and raise goats and chickens, and keep a garden, but we don't have the money. We would also like to invest in water purifying tablets, guns and ammo. We are trying to save as much money as we can, but really don't have faith that it will be worth anything in the near future.

[velcromom]

I don't think we are going to see things get significantly better for quite some time. I do know that no matter what the economy is doing, a family should always be prepared to be able to reduce spending in case of a layoff, injury, chronic illness, local natural disaster (here, we have wildfires and possible earthquakes). That means having a full pantry and a backup plan for each area of household management that doesn't rely on having a paycheck coming in. We're getting there. If I had a chance to buy a house in a nice rural area, I'd do it and work on making it as productive as possible with gardens, a well, food animals, etc.

If things stay the same, or even if they do get a lot better, being prepared means you are still ahead of the game and you have a healthy lifestyle to boot. If they get worse, being prepared means you will suffer less. There's really no downside to it.

[marimara]

So I've been thinking of this ever since I started the thread. I agree w/velcromom, things aren't going to get better anytime soon. I've been reading alot about coming Depression (if we're not already in it). Kind of like a Looong Depression, not so much sudden and catastrophic but long and drawn out. I've read Kunstler's Long Emergency and that is what I think it happening (minus the anti-southern bent he has). I described it to dh the other day like this:

Peak oil is happening
A recession is happening (possibly depression) worldwide
The Gulf Oil spill is happening
There is going to be a long drawn out recession/depression along w/peak oil and catastrophic emergencies like the Gulf oil spill, happening every once in a while. Sometimes the emergencies may overlap and it feels like it's hitting the fan. Hopefully there won't be any more big wars thrown into the mix. States can no long pay for things and people, many states are bankrupt. There is change in the air for sure, where it blows us nobody knows. Just be prepared for the worst.

[kittywitty]

This area I see as being more financially depressed. Jobs are gone, schools have laid off 20+% of teachers and aids, state is years behind paying their bills. I just hope it's good enough we can sell our house without taking a loss and move somewhere better with more job security.