The Economic recover: anyone willing to make a prediction?

[charles brough]

It would be enlightening to make a prediction in public, then check back later and see how it was shaping up in the real world.

 

Is anyone willing to make prediction of where the economy will go from here---and when?

 

If so, let's make our predictions and then, when we've finished, save the link (its under "tools" and then "page info") on our "bookmark" or "favorites" so we can check back in 6 to 12 months and see who has done the best.

 

Where the fun comes in is that people tend to have no idea what the economy will do, but when it turns around, they have marvelous hind-sight and are convinced they know it was going to turn around then ahead of time.

If we have it down and saved, we all avoid rationalizing. This alone will discourage some from making a prediction . . .

 

Here is my prediction:

 

"I believe the Dow Jones Industrial Average in the area of its lows between 8000 & 9.500. I believe the stock prices will go up steadily from this level soon, but that the general economic conditions will continue to deteriorate for the next approximate six months as the government spends money to reverse the trend. In the Spring, I believe commodity prices will start rising and, into the summer, business will start improving. I think the shortness of the downturn and the pace of the recovery will surprise everyone. Home prices will be rising and the mortgage crisis will be over. All the new money plowed into the economy to reverse the downtrend will, however, cause an accompanying increase in prices---so much so that we have hyperinflation."

 

As you all know, I could be very wrong on each count. So, lets see what we can come up with.

[Overdog]

I predict that by accepting the notion that a Corporation is too big to fail, the American people will one day wake up and find that they can no longer distinguish between Government and Corporation.

[Chiantiglace]

I predict that by accepting the notion that a Corporation is too big to fail, the American people will one day wake up and find that they can no longer distinguish between Government and Corporation.

 

Add Union to that mix.

 

They might all be fighting each other, and at a distance they seem to be different, but the truth is all three of them are doing everything in there power to destroy middle class.

[LaurieAG]

Is anyone willing to make prediction of where the economy will go from here---and when?

 

Hi Charles,

 

Considering that the G20 just announced that they would make the global financial system more transparent, among other things, why do I find it very strange that Fox Business, Bloomberg and CNBC on cable all refer to the DJIA instead of the DOW that they have been quoting for the past couple of years????

 

The last time I saw the plain DOW it was around 200-250 points below the DJIA, and that was only a couple of days ago.

 

The real value of the DOW should actually be about 5000 if you continue the growth rate from between 1987 and 1993 and project it towards 2008.

 

There's one way to tell if the G20 politicians are lying, check out Australias 'comedy hour' (commonly called question time by Australian politicians), if our politicians give up their childish avoidance of public scrutiny and responsibility in the next sessions of the 'comedy hour' then their might be a chance that they're telling the truth, unfortunately they cannot help themselves so I doubt it.

[charles brough]

Hi Charles,

The last time I saw the plain DOW it was around 200-250 points below the DJIA, and that was only a couple of days ago.

 

I really don't know what you are talking about. At least here in the U.S., the Dow and the DJIA are one and the same thing. Even looking in Google indicates nothing but that.

 

charles

[Moontanman]

Add Union to that mix.

 

They might all be fighting each other, and at a distance they seem to be different, but the truth is all three of them are doing everything in there power to destroy middle class.

 

Sadly i find I cannot argue that point. I do think that things will get worse before they begin to pick up and many will not get back to where they were before this crisis. I don't think we will see wide spread soup lines like in the great depression early in the last century but the middle and lower class are going to suffer in this one for sure. BTW can anyone define what it means to be i the middle class and or lower or higher class? I keep getting confused by where I sit in this system of classification.

[clapstyx]

I'm prepared to make a prediction that there will be a global currency meltdown within 12 months which will cause virtually all manufacturing in every country to cease. There are a several factors driving in concert to this conclusion which as they come into unison will cause an acceleration. We know already that the lifestyle promoted by commerce is super negative to the ecosystem and there is no way of avoiding a realisational crunch time. That process has been held back massively by the media and the disparity between the level of thinking they portray as normal and the actual public depth of thinking (vis a vis realisation acceleration speed). The impact on the level of economy of resource conversion into saleable commododity is going to happen when that disparity reaches a point where the two versions of reality become so mismatched that there will be an unsettling collision of greater consciousness where the only way out of it w

[LaurieAG]

I really don't know what you are talking about. At least here in the U.S., the Dow and the DJIA are one and the same thing. Even looking in Google indicates nothing but that.

 

Hi Charles,

 

It looks like the Australian cable guys all had the same 'problem' with their data feeds.

 

It also looks like a Gold Standard is the only way to fix the global financial system. With oil down to nearly 1/3 of what it was a couple of months ago, somebody, especially our democratically elected politicians, should be responsible for protecting us from the blatant gougers.

[charles brough]

Hi Charles,

It also looks like a Gold Standard is the only way to fix the global financial system. With oil down to nearly 1/3 of what it was a couple of months ago, somebody, especially our democratically elected politicians, should be responsible for protecting us from the blatant gougers.

 

 

But I sense you are not real predicting we will re-establish the gold standard, are you?

[Southtown]

I predict that by accepting the notion that a Corporation is too big to fail, the American people will one day wake up and find that they can no longer distinguish between Government and Corporation.

People? You think the people have anything to do with those decisions?

[LaurieAG]

But I sense you are not real predicting we will re-establish the gold standard, are you?

 

Hi Charles,

 

I read two articles the other day on stabilisation of the global financial system through a gold standard. For most of human civilisation over thousands of years there has been some form of gold standard in operation, where the central bank/treasury sets the transfer prices of goods and services to a common standard. Up until the early 1970's there was a gold standard in operation where the global currencies were linked to the US dollar through its relationship with the price of gold (around $35).

 

The main driver for a gold standard is that, of the 680 or so trillion of outstanding derivatives, a high proportion (2/3 or so) are related to currency values and interest rates, a good earner considering that these factors remain largely under the control of the reserve banks (a good earner if you don't actually work for a living).

 

While Allan Greenspan may have been trying to protect the US economy from economic fallout, his own 'stairway to heaven' (If there's a bustle in your hedgerow, don't be alarmed now:D) was a major contributor to the global problems we now face.

 

So a gold standard would help protect the global financial system by stopping the speculators from sucking the grease out of the bearings before the engine seizes (again).

 

I wrote the following 10 years ago (5th Oct 1998). Surely there must be a way to get a win/win situation (between the people and business not between the governments and the business i.e. the current status quo), and not by continuing the exact same poor policies that lead us into this mess in the first place.

 

'The plea of BeiBionn'

 

You can have your magic beans Jack,

your children are hungry and we need the cow back.

 

The lack of just terms and equitable or fair pacts,

expose all crooked beanstalks to concerted attacks.

 

Unless obsessive cycles are stopped in their tracks,

our towns will again be as flat as tacks.

 

You have been too trusting Jack,

your childrens futures remain black,

while current problems compound through lack.

 

Struggle earnestly against the pack,

repudiate rights to depreciatingly retract,

as giants fortress lie ripe for sack.

 

For only fair shares of the golden goose Jack,

will save beanstalks and giants from the axe.

[Cindy Gates]

We won't see signs of recovery until 2010, in my opinion.

[charles brough]

LaurieAG proposes a return to the gold standard---to which I agree. But, you know, it won't happen in our life time . . .

 

Cindy Gates is thinking in terms of 2010. Could be, but I think all this money being created and pumped into the system will mean that once the stock market begins to rise up from these levels, cheap money will pour in from all over the world buying up real estate and other now-low-priced assets.

 

What I figure is that monetary inflation has distorted the picture which would otherwise equate 1929 with our 2005 real estate boom peak and that 1933 bottom corresponds to our 2009 next year. At least it is an interesting comparison . . .

[Buffy]

Yes, but it seems to be based on the notion that the gold standard would result in greater stability of currencies, when the exact opposite is the case.

 

Anyone ever read William Jennings Bryan's "Cross Of Gold" speech?

 

If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold, :phones:

Buffy

[questor]

Economic recovery--3-8 years

Housing industry recovery-- 2-4 years depending upon location

Auto industry recovery-- 4-5 years. must redesign, retool, get union concessions as to salaries to ever become competitive in the USA again. The

bailout, whatever it is will not be enough. This industry may not survive as it is.

Banks-- more will fail, be aquired, be more regulated--limiting profits

Jobs-- unemployment will increase to 8-12%. Due to lack of education and training, we have a large number of people who may be unemployable.

Government -- will grow to try to handle all the chaos in our institutions and infrastructure. This, along with everything else will drive up taxes and further punish all businesses.

 

Economies can only function by a fair exchange of value between and among consenting parties. When the balance is skewed by trying to artificially ''even the playing field'', a time of reckoning surely follows. The very people who allowed and encouraged this debacle are now trying to lay the blame at the feet of others instead of admitting their mistakes and correcting the ideas that caused them.

 

We have elected a group of politicians who have historically elected to throw money at problems rather than make the hard but correct steps to solve the problems. All we can do now is pray they show enough toughness and insight to do the right thing for the country.

There is no good news out there and the worst is yet to come. The Dow fell below 8000 and I would not be surprised to see it at 6000 by next summer. More and more businesses are crying for bailouts and they don't even know how much they need to survive long term.

I hope to Hell I am wrong about this whole scenario.

[charles brough]

Yes, but it seems to be based on the notion that the gold standard would result in greater stability of currencies, when the exact opposite is the case.

 

Anyone ever read William Jennings Bryan's "Cross Of Gold" speech?

 

If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold, :)

Buffy

 

How eloquent, Buffy!

 

With the gold standard, you have deflations, you have pronounced economic cycles. This is where its value lies: it avoids the ruination of currency with hyper inflation. In the Roman Empire, precious metals ceased to be used and base metals were used as money. The inflation became so serious that the empire reverted to barter for periods of time. Paper money was substituted in the Chinese civilization. They had ruinous periods of hyper inflation. We are heading for hyperinflation also and I think we are in for a taste of it when we come out of this very expensive recession.

[Thunderbird]

I predict unemployment rates will rise to 12-17% within a year as company‘s fall to the way side or begin to hemorrhage job positions. Numerous and Massive infrastructure building projects will bring unemployment down to 8% in two years. New energy technology will bring down the unemployment to below 6% in four years.