whats the forums view on the economy

[97guns]

just wondering what your take is on our economy. are we making headway like they say or are we spinning in the toilet?

[bjl584]

Hard to say. Right now the markets are pumped up with stimulus money. Look for a correction in the coming months.

As far as jobs, i read a report predicting 150,000 jobs added to the economy per month moving forward. Not enough to generate much growth, but enough to tow the line.

Things are delicate at best. A catastrophic event such as another bubble popping (think comercial real estate) or a terrorist attack could cause things to spiral downward again.

[DanielB]

In the short-term (next 1-3 years), I think things will be great and will continue to improve. We'll probably see unemployment at 6% at the end of 2012.

However, all we've done with continued stimulus and a weak-dollar policy is kick the can down the road. At some point, inflation will kick in - and with a vengeance. I'm not sure our economy can handle the ramifications of that. Too many people still utilize adjustable-rate mortgages and student loans without understanding the risks involved. Our cash becomes worth less and less in such an environment, which is a significant factor when considering our ability (or lack thereof) to pay for foreign goods.

Housing, itself, represents an interesting problem because inflation-adjusted housing prices are still 30% above where they were in the 1970s and 1980s...probably still too high for most buyers. In fact, I know prices are still too high to attract younger (23) prospective purchasers like myself.

Anyway, that's my take: short-term looks great, long-term is very scary. That's why I'm making the effort now to pay off everything I owe and sock away some serious cash.

[littleroc02us]

My economy has never been better, I have a good job, good salary, my wife is doing well, the stock market has been amazing for the past year. As for the US economy on the whole, I believe Gov't will continue to grow, which means more spending, more special interests groups, get ready to pay more taxes. Goods and services will start rising and interest rates will probably go up, inflation is revving up like a Harley. All I can advise to others is to put yourself in a good position financially for the next crash, greed doesn't ever stop because of a recession.

[GREENBACK]

I'm optimistic. Corporate profits are high and hopefully jobs will follow. We, inevitably, will have another downturn at some point. We always will have corrections. Hopefully the government will not impede growth with all their good intentions.

[Mr Nice Guy]

Ive been hearing a lot about getting into oil securities lately.

[Bookkeeper-For-You]

Anyway, that's my take: short-term looks great, long-term is very scary. That's why I'm making the effort now to pay off everything I owe and sock away some serious cash.

Yes, I agree with your kicking the can down the road analogy.

For one thing, I'm not convinced we are prepared to effectively regulate the financial industry, and I expect the reckless games to continue. Sooner or later they will crash the bus again. The government isn't much better.

This is a big subject, but my theory is that all the problems arise from their source in the human mind, and until we address the problem at the source, a pattern of chaos is likely to continue. Only the details of the story will change.

I see little chance we'll see this until a true calamity focuses our attention. Yes, this is dreary, but, the history of the human race is full of such collapses, and we've still found our way to here somehow.

[greenskeeper]

I see big time inflation coming in the next couple years. Or even a completely different form of currency for this country (or world) that is actually backed with something....maybe real estate, commodities, etc?

U.S. National Debt Clock : Real Time

[GREENBACK]

A couple of years ago all the talk was about the world's financial collapse. We have lots of problems but no collapse so far. I think this is mainly media driven. This wasn't 1929 again as so many predicted. We are much smarter with each recession and we'll continue to get smarter the next time. Real estate, joblessness, Inflation, name your problem...we've dealt with worse worse things.

[maat55]

I liken the economy to an engine. At this moment, the fed is priming the carburetor despite having a fuel pump going out.

Our economy has nowhere to go but stagnation or down. Once the government has spent the future propserity of the next couple of generations, we will see the natural demise of our economy.

The fundamentals of prosperity are completely distorted by government intrusions. None of this has changed and is getting worse. The natural course after an fed/government inflated bubble is to allow equilibium through deflation, which the fed is fighting to the death.

We are following the path we did during the Great Depression and that of Japans lost decades. The only reason the Great Depression ended was due to our country being the last man standing after WWII. This time, we have massive unfunded liabilities, current deficits in SS/medicare and medicaid and growing competition that is taking market share.

[greenskeeper]

A couple of years ago all the talk was about the world's financial collapse. We have lots of problems but no collapse so far. I think this is mainly media driven. This wasn't 1929 again as so many predicted. We are much smarter with each recession and we'll continue to get smarter the next time. Real estate, joblessness, Inflation, name your problem...we've dealt with worse worse things.

we have come out of it in the past by adding to our debt. Eventually those birds will come home to roost.

The financial collapse would have happened if we didn't inject trillions of dollars into it to keep it going. How do we pay for all those extra dollars we created out of thin air?

In the past, we weren't importing 70% of our oil to power our economy.

In the past, we didn't have a $13,000,000,000,000 in debt.

you get the picture, the game is different this time.

[rj.phila]

To me, the whole thing seems to rest on unemployment, and how well the majority of americans are doing. dow resurgence, coprorate profits, positive "growth", these are all not metrics i trust, or consider important. as the income disparity grows, we put ourselves closer to the problem that plagues countries like egypt.

one big x-factor to me is our massive imperialism, and what role it plays in pacifying/coercing other nations into things like accepting our debtor status, as well as accepting the USD as the currency of choice to trade commodities(i.e.oil). is it helping us kick the can, or will it prove to be a liability? its a hard thing to gauge, as the mainstream press HERE wont engage in this topic at all.

in a real-world way, as far as the people i know and MYSELF, it looks like this: if you made it thru the recession, you are going ok right now(im actually doing much better in my field of work than i did 2 yrs ago). if you got laid off or were on unemployment, you are having the same struggles you did 2 years ago. at least here in philly, thats kinda what my barometer looks like.

i DONT expect a massive correction in our currency to happen overnight, i.e. within days or even weeks. 6mo-3 years? hard to say; i feel its my duty to at least consider it as a possibility, and prepare for it. we've passed the 100% gdp/debt marker before, and walked it down(even though i think it is going to be MUCH harder to do this time, and we are rapidly walking in the wrong direction). it DOES concern me in the mid- to long-term.

i will say that a 12,000+dow and a 9.2%(REAL terms more like 12-16%)=something seems funny here. if an "economic recovery" can happen with the large majority of americans still hurting/not working, that just doesnt sound like a stable recovery to me.

one thing i think is VERY concerning is that for the last 2 years we had DEM majorities in house, senate, and POTUS. this is the party that consistently runs on populist rhetoric, i.e. "for the little guy". the legislative record of the last 2 years is DEFINITELY not in a populist or utilitarian nature IMO. if the D party isnt going to deliver on this, its not gonna happen in a 2 party system. in short, im not expecting legislation designed to impact a US majority anytime soon, late, or at all in the near future. this, again, is not good news to me.

[rj.phila]

In the past, we weren't importing 70% of our oil to power our economy.

In the past, we didn't have a $13,000,000,000,000 in debt.

you get the picture, the game is different this time.

100% agreed, making it difficult and IMPORTANT, i think, for americans to really think outside of the box, in terms of the spectre of possibilities/outcomes.

if there was an effective and rational way to be VERY long oil, not merely the corporations that deliver it, i would do it in a heartbeat right now.

[greenskeeper]

100% agreed, making it difficult and IMPORTANT, i think, for americans to really think outside of the box, in terms of the spectre of possibilities/outcomes.

if there was an effective and rational way to be VERY long oil, not merely the corporations that deliver it, i would do it in a heartbeat right now.

you could invest in an oil fund for delivery, such as USO

Personally I am big on physical gold and silver (more on the latter since the ratio is traditionally 1:10 which means silver is undervalued and should be around $130/oz comparative to gold)

This paper money idea has only been around for around 150yrs, what has always held value over the centuries?

[rj.phila]

re: greenskeeper-the USO's i looked into trade in a very high value per unit, and they are for delivery for a specific date, obviously. the nature of them isnt really what i would want to throw my wieght into, i.e. im less bullish on 200+/barrel oil in 6 months, than i am at sometime in the next 10 years.

i am with you on gold/silver, with some slightly different thoughts on this. A) what i like about gold is that is has backed so many currencies in the past, and thus seems a likely "default" medium for stored value around the world in an interim/transition period; i think this is a very important aspect of ANY currency. (as i understand it, if an SDR comes about that is backed by gold, its going to play a very useful role for alot of people around the world who arent happy about US monetary policy.)

one of the things that the "fiat money boogeymen" DONT talk about is that one of the most powerful aspects of a currency-from gold to yuan- is that it is a symbol that humans have agreed upon as a metric of value, and stored wealth. yes, a dollar holds no inherent utility to the human race(nor gold, other than its rarity),but the fact that we have all agreed upon its viability as a SYMBOL-for stored value primarily, is MUCH more powerful than any other aspect of it IMO. in short, we evolved to utilize symbols like these, and thus i dont think we are going to "go backwards" in terms of the function it plays in society. the problem to me is that the nature of the "contract" we all enter into by using and valuing USD is being modified by our own monetary policy.