Predictions for the economy 2009 and beyond?

**Rattanaburi** · 23-12-2008, 10:22 AM

Things aren't looking too good out there. The bad news just keeps coming. Is it a strange new economic world or just a bump along DOW 20,000. What do you think is in store for the economic world / investors in the coming year? Share your opinion. Let's see who will get it right. Make some picks for the coming year if you dare.

**good2bhappy** · 23-12-2008, 10:28 AM

USA will follow an Isolationist policy!

**Zephod** · 23-12-2008, 10:30 AM

I see a 3+ year global recession and we have yet to get anywhere near the bottom.

Peace..
Zephod

watterinja · 23-12-2008, 11:18 AM

Some analysts are already calling it one of the 3 worst years in financial history - 1931, 1937, 2008 - with 2008 being the worst by far in terms of wealth destruction. 1931,1937 were in the times of the Great Depression.

Interesting times lie ahead.

**Mid** · 23-12-2008, 11:22 AM

best option currently appears to be to return to bed till 2010

**Rattanaburi** · 03-01-2009, 03:45 PM

^ I kind of agree with that Mid. Friday markets were up but I don't think this is going to last. I just don't see too much working for the US economy at least.

**Thormaturge** · 03-01-2009, 04:04 PM

With the current head in sand approach to economic policy in the West, what I see is looming inflation.

The USA in particular, but also Western Europe, have to learn to reduce consumption in order to accommodate the rise of China and India. There isn't enough of everything to go around and the two emerging economies are sucking resources away from the developed ones.

Western governments will continue the illusion of wealth by allowing asset values to rise, and by even encouraging it. House prices will rise again and stock values will climb, all on the back of ludicrously cheap credit. This time the credit will be backed by the State since the banks aren't this stupid.

Inflation will rise spectacularly thereby stripping any true value out of the assets and leaving everyone worse off in real terms. The Dollar, the Euro and Sterling will all drop through the floor as interest rates are deliberately depressed in order to continue the illusion.

This is the world Obama is promising everyone, and it is what America voted for. Everyone else is following the new Messiah like sheep. O baa ma, O baa ma, O baa ma.

There are going to be an awful lot of very very poor pensioners in the next decade.

**klongmaster** · 03-01-2009, 05:16 PM

^Interesting analysis Thorms: where does SEAsia fit into this...is it possible for small countries like Thailand to steer their own course or will they be part of the flock?..

bkkandrew · 03-01-2009, 05:22 PM

I don't think I need comment as most know where I stand on this.

**MeMock** · 03-01-2009, 05:24 PM

Gold and Oil way way up.

**Thormaturge** · 03-01-2009, 05:35 PM

I think China will be back on a roll soon, fuelled by the funny money from the USA which will continue consuming the trash China has been manufacturing with money borrowed from the Fed. This time the US will be selling the family silver to buy rubber dog toys. US Treasury bonds will be the next worthless asset.

The USA has to eat and Thailand will happily continue exporting agricultural produce, so the Thai economy should hold up although with the Thai economy so closely tied to that of the US we will see inflation being exported here too. Price increases in the USA will cause prices to rise in Thailand correspondingly.

This should ensure the Baht - Dollar ratio remains broadly stable The question for Asia is whether small currencies such as the Baht can survive, and I do not believe they can. Speculators have shown us in 2008 just how much damage they can do, whether it be to commodities, banking institutions or economies. There must be a common ASEAN currency and I think it will be forced upon Asia to develop one. Meanwhile it may well become common to formally link currencies in Asia to the Dollar.

I look forward with eager anticipation to the eventual launch of the "Asean" as a currency to replace the Baht.

I will add coal to Memock's list. The USA generates half of its electricity from coal and China is building scores of new coal fired power stations. The rising price of oil will make it economicallyviable to clean up coal fired power plant emissions.

**mellow** · 03-01-2009, 06:12 PM

^ Do you really believe that the USA depends on Thailand for food?

**Thormaturge** · 03-01-2009, 06:21 PM

^
That isn't what I said. The USA does import agricultural produce, especially seafood, from Thailand and that is likely to continue. If anything Thailand has been increasing its agricultural exports by expanding into new markets so Thailand won't sink. The USA exports wheat which is of no interest to Thailand whatsoever. If the USA sucks money in from Russia and pays some of it to Thailand then nobody should be too upset.

In a perverse way I believe political instability suits Thailand since politicians don't have enough time to exert any real influence and commercial considerations fuel the economy instead.

**britmaveric** · 03-01-2009, 10:30 PM

Economy will be back in order around 6-1yr. Then it will be boom time once again for the yank economy... lower oil, and low gold prices. (teeraks beware)

bkkandrew · 04-01-2009, 01:21 AM

Originally Posted by britmaveric

Economy will be back in order around 6-1yr. Then it will be boom time once again for the yank economy... lower oil, and low gold prices. (teeraks beware)

When Brit speaks, we all know the opposite will happen.

**Lynn** · 04-01-2009, 02:09 AM

After reading the majority of the replies, I can tell that most of you don't have a clue of what is going to happen in the near (12 months) future. All I will say is to start saving money if you haven't yet and make a real budget for your living expenses...it is going to be rough for a while until the governments sort out their economies and things get back on track.

**britmaveric** · 04-01-2009, 02:22 AM

Should spend spend spend - squirreling away your dosh won't help the economy.

bkkandrew · 04-01-2009, 02:23 AM

^^Lynn, with respect, I see little point in reposting vast amounts of information on this thread when it can be found here:

https://teakdoor.com/us-domestic-issu...-us-banks.html

bkkandrew · 04-01-2009, 02:25 AM

Originally Posted by britmaveric

Should spend spend spend - squirreling away your dosh won't help the economy.

You carry on and help uncle Tom Cobley and all. I'll just take care of my family thanks

**britmaveric** · 04-01-2009, 02:34 AM

That is the usual way - help thy self not others.

bkkandrew · 04-01-2009, 02:37 AM

^Righto, deposit all your funds behind the bar at a suitable Pattaya venue and we can all go about reviving the world economy in a concerted 'push'.

**britmaveric** · 04-01-2009, 02:56 AM

You buying Andrew??

bkkandrew · 04-01-2009, 03:20 AM

^Nope, you seem to have missed the 'Britmaverick's funds behind the bar' part of my post, haven't you.

**Thormaturge** · 04-01-2009, 03:47 AM

We are heading back to the days of high inflation, where money itself loses value. Place $ 20,000 in the bank today and in ten years' time it won't buy you a quarter of what it does today. Governments are so eager to "kick start" their economies that they are stoking up inflation much like someone throwing gasoline on a smouldering fire.

You need a hedge. Gold is probably the best bet although, once again, I expect property to develop a bubble and burst pattern.

Spend spend spend isn't the way to financial security. Save, invest and look for quality are the tenets of this not-so-brave new world.

**Panda** · 04-01-2009, 06:25 AM

Its simple really.
Countries that import more than they export go into debt.
Borrowing more money to buy more imports is not a real smart thing to do. Since it only increases the debt.

Paper money is only a trading medium for the actual goods and services that represent real wealth.
The $US is vastly overvalued since it is based on debt rather than production and that cant continue forever. But as the worlds default trading currency, its still in great demand which in turn is forcing its trading value up unrealistically.

Sooner or later the world leaders are going to have to face the fact that this endless cycle of debt trading on an overvalued $US will come crashing down.

The only way out of this mess is the introduction of a world trading currency based on a basket of currencies to even out the inequities.
Such a system would result in a rapid fall in the value of the $US (and therefore the amount of trade in actual goods the US would have to export to pay back their $ debt). So, it would be good for USA as a whole because it would mean imports became far more expensive and thus stimulate the domestic production of consumables. But it would be bad for countries who have lent US money and bought up their paper money at previously inflated rates.

The core of the problem at the moment is that the whole monetary system of the world is out of whack with production because its based on a $US propped up by an ever increasing debt cycle.

Whats happening now is the beginning of an adjustment in the value of paper money, but ironically at the moment, there is a rush to buy $USs as a safe haven as world trade falls off and the $ value of companies producing goods and services declines. Thus pushing up the tradable value of the $US further and making the inevitable crash landing even harder when it comes. And of course the US governments policy of borrowing more money and encouraging more debt and spending is also increasing the severity of the pending crash.

When all the dust settles (I hope) in 3 to 5 years, we will have a new universal world trading currency in balance with production of goods and services.

It hasn't just been a US housing bubble thats caused the current world recession, its been a $US bubble. The post WW2 monetary experiment in using one countries currency as the worlds default trading currency has run its course. It worked for a while, but started to go down hill when the US completely abandoned the gold standard 35 years ago. Now the rest of the world has got to absorb the loss incurred by the $ bubble. Its got to happen sooner or later no matter how much we try to defer it. And like all adjustments, the sooner it happens the less of a shock it will be.

Its absurd to think that just printing paper money can create wealth.
Wealth is dependant on labour and production of actual goods and services.
Paper money is just the medium for exchange of real things of value and when we start to focus on the paper money as more valuable than the real products, the value of the paper money becomes inflated and we realize we dont have as much in real goods and services as we thought.

It will all work out in the end but it will be a very painful experience unshackling the whole world monetary system from the $US.

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