<p>Just another economic crisis so far…if this crisis is compared to other bad ones…</p>
<p>[This</a> Time is Different, An Update Oregon Office of Economic Analysis](<a href=“http://oregoneconomicanalysis.■■■■■■■■■■■■■/2011/09/19/this-time-is-different-an-update/]This”>This Time is Different, An Update | Oregon Office of Economic Analysis)</p>
<p>Good post and interesting discussion. </p>
<p>I cringe, however, when I read about people comparing the US and other countries in terms of economic crisis. It won’t be the case in the next two decades, but the US has the worlds’ reserve currency. That means others value our currency as an asset all to itself. One of our exports is the US dollar. In other words, one of the assets we export is the dollar. Until the rest of the world realizes it is just another piece of paper and fiat currency, we can continue exporting paper and others think they are getting an asset. Once the dollar loses its reserve currency, we will suffer a true financial crisis much greater than any in history given the size of our debts and the weight those debts will cause.</p>
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<p>Not today though. The dollar is steaming north this morning while other asset classes get killed. It seems completely counter-intuitive but the dark side of the force is very strong.</p>
<p>The French banks have made loans that are 4 times the gdp of France…</p>
<p>Irish banks are probably worse…</p>
<p>The last I looked…US debt…business, government and people is less than 4 times GDP.</p>
<p>Very bad…worse than 1929…but not as bad as some of these other places…</p>
<p>I lived through several and this one seems the worst in my lifetime - in the previous recessions, there was still some level of hope and optimism given our diversified economy and the natural and engineered resource, research and development advantages that we had. It seems to me that we’ve many of those advantages (along with our manufacturing base) and that we’re headed in the wrong direction. In the past, we muddled through but there was hope for a better day tomorrow. I see far less of that today, even among people that are doing reasonably well.</p>
<p>I think this is the worst economy since the 30’s.</p>
<p>I am talking off the top of my head on the French and Irish banks…my memory could be faulty…</p>
<p>Loved the link at the bottom of the OP link to shop now for Manolo Blahniks. Har har. This one feels to me like the gas crisis with 3 hour long gas lines and like 1980 with the Reagan rolling recession in that it feels like the end of the world and we just can’t seem to see our way out. We hear it more this time I think because the news (CNN etc.) is more in your face and constant and the web allows more discussion and shall we say perseverating on the gloom and doom. Just because we can’t foresee what will take us out of this (what will be the next fad to bubble up) doesn’t mean it ain’t around the corner.</p>
<p>Just an observation from the trenches: I have a small business. I design and sell specially molded parts to a broad spectrum of manufacturers. At least 70% of what I sell is manufactured here in the US. Without laying off anyone, I was still able to run lean and mean through 2009 and 2010, our two worst years. This year is an entirely different story since virtually every one of our customers has been increasing their orders and schedule rates. Yesterday I increased our staff by 20%! We went from 5 employees to 6 employees!! Just sayin…things are at least looking up for us.</p>
<p>Nice, musicamusica…good stories are allowed. :)</p>
<p>Our unemployment rate in NH is 5.2%, we have a new high-end outlets mall coming in that will create 800 retail job in my town (and a lot of traffic), and this past weekend, Fidelity Investments had stickers on newspapers at the grocery store indicating that they were looking for CSRs. I’m a bit surprised that they would bother to go that route. There are help-wanted signs in some stores here. Our company reported very good earnings recently and I’ve been seeing a lot of new faces in the building lately. So I am aware of anecdotal good news.</p>
<p>The thing is that new unemployment claims are above 400K, week after week after week and we’re still seeing the odd mass layoff notices. The strength of the US dollar will become more of a problem for our exporters though it may mean that energy becomes cheaper for us.</p>
<p>BTW, if anyone wanted to do a stimulus, now would be a very good time. The US dollar has rallied ten percent and any stimulus but the Fed or the US Government would have a lot of cushion given the huge problems in Europe.</p>
<p>I’m watching copper prices right now - copper prices are a good leading indicator of where the global economy is going. Copper is down about 7%.</p>
<p>I think copper is a good indicator.</p>
<p>I guess lumber used to be a good indicator.</p>
<p>The 10 year is yielding 1.762 percent…wow…</p>
<p>Now savers and investors in bonds are really f…</p>
<p>This is a bad economy that may get worse and fall into a Japanese style long-term deflation if the government cannot provide stimulus. Yeah, that’s right, government spending. We need a lot of it to take up the slack that consumers used to provide. When lots more government money starts moving through the economy, more businesses will start hiring, home price will rebound more quickly, and people will start spending more. </p>
<p>The US can still borrow because our bonds are still considered sound, despite the recent credit downgrade. (After the downgrade bond yields have actually been falling–a sign that investors want our debt, probably because its still safer than the debt of many European countries now). Go in debt when the economy is down, pay it off when the economy recovers. It’s worked many times in the past and would work again.</p>
<p>But because of our dumb Congress and yes, specifically the debt-o-phobic Tea Party influenced Republicans, we won’t do what’s needed. (And that’s without considering that some of them just don’t want an economic rebound on a Democratic president’s watch.) Barring some spectacular unforeseen development, significant job recovery will probably take many years.</p>
<p>As someone who is 55 years old, and has seen a lot of ups and downs, I would say that this one is indeed different, because of the impact of China and India, which together have over 2 BILLION people.</p>
<p>My friend, who is an executive at a big company, says that the little secret politicians don’t like to talk about is that not only are people in those countries willing to work for 20% of an american salary, but that they do a much better job besides.</p>
<p>There will be some winners in America. For example, those who work in the aerospace industry will be winners, as Boeing sells more planes to China and India. But there will also be many losers.</p>
<p>Where does a kid who is not college bound get a job when he gets out of high school. In 1957, he would just drop by the local factory, and get a reasonably high paying job. Those jobs are now gone, by and large.</p>
<p>Neither the democrats or the republicans are telling us that these jobs are probably never coming back, and pretend that by simply spending money on stimulus, or cutting taxes, or raising taxes, the problem can be fixed. But those are just band aids.</p>
<p>Stimulus did not work last time because it was from borrowed money and not primarily directed at jobs that create other jobs. </p>
<p>We need to take proposed government spending on entitlements and shift that spending to activities that actually create long term jobs. We should eliminate increases in government spending that are based on inflation indexing. That means seniors will have to wait a few years to get any increase in benefits in order to share the burden. Take that money and other inflation indexed increases and spend it on construction jobs. This way overall government spending does not increase but the existing spending is better spent to help the economy. Unfortunately seniors will not go along with this because they are the greediest of all generations.</p>
<p>I think this economic is more severe than any I have seen.</p>
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<p>This has been - and continues to be - my major gripe. How much money do you need to last you the rest of your life when you can safely earn… .1% ?</p>
<p>"How much money do you need to last you the rest of your life when you can safely earn… .1% ? "</p>
<p>Yeah…I hear ya…</p>
<p>I work exclusively in the legal sector, but this downturn is in a class utterly by itself in our field. It’s different not just in degree but in kind. The Depression was probably as bad, but not many who were practicing law in that downturn lived to see this one, so it’s tough to compare.</p>
<p>Agree 100% with Big Daddy. Unfortunately, there is going to be not only no gov’t spending but gov’t cutting spending at the worst possible time. Watch economy plunge into the abyss and we will think that limping along like we are doing now as the good old days. </p>
<p>The stimulus didn’t work last time because most of it was made up of tax cuts. When will people learn that money doesn’t trickle down!</p>
<p>watching some health insurance companies fold, watching companies that will stop offering health insurance, looking at high unemployment numbers, seeing income drop to a level below 1996…not very encouraging. i wish i was more optimistic. i have never felt so glum about the prospects for a relatively speedy recovery.</p>