Thread: Predictions for the economy 2009 and beyond?

There is plenty of oil to go round for probably the next 300 years.
Its just the high quality, cheap to extract stuff is getting low.

The world economies wont collapse because of the price of oil. We can make gasoline out of garbage for the equivalent of $US 70 a barrel. -- but at the cost of big infrastructure start up cost. Canadian oil sands have plenty of oil, but low quality and costs a lot to extract. Iraq and Iran are the next big producers of cheap high quality oil. They have enough to keep us going for decades after the Saudi fields start running out in about another 20 years. Last years oil spike was mainly caused by speculators entering the market. Call it an oil bubble if you like.

It ain't oil thats causing this adjustment in world wealth.

Originally Posted by Thormaturge

^
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.

The US imports about 3% of its seafood from Thailand. Agricultural imports and exports : ERS/USDA Data - Foreign Agricultural Trade of the United States (FATUS)

All of this is window dressing in respect of predictions for 2009. For the first part, the only game in town is the second bailout wave. Brown's already kicked this off in the UK, as the banks have managaged to burn their way through the first lot in a couple of months. You know- the money that took public debt to 300% of GDP.

Obama will get his change to 'think of a number and double it' soon. Once he proves that he can think of a really big number indeed, capitulation in the US, the dollar and those that rely on it will be complete.

Originally Posted by Thormaturge

I think China will be back on a roll soon.

Good luck with that...

Bloomberg.com: Worldwide

What I have trouble figuring out is what GM propose doing with all the cars they are still manufacturing and which nobody is buying.

Somebody in the USA is going to have to deal with unionised labour which is making American products uncompetitive. Everything I see points to tremendous inflation to erode wage bills and further devaluation of the currency to sell the stuff most people can't afford. All of this leads to erosion of individual wealth.

I was dumbfounded to learn that container crane drivers earn $160,000 pa. Either these wage bills come down, or prices go up. Obama seems to be taking the high price route.

Originally Posted by bkkandrew

Originally Posted by Thormaturge

I think China will be back on a roll soon.

Good luck with that...

Bloomberg.com: Worldwide

China’s economy expanded 9 percent from a year earlier in the third quarter of 2008, the least since 2003. The World Bank forecasts a 7.5 percent increase in 2009, the smallest in almost two decades.

When Obama gives everyone the money for their replacement rubber dog toys China will have avoided a recession and will be growing in double digits gain.

No problem.

Originally Posted by Thormaturge

No problem.

Apart from the teeny weeny one about the US Dollar reaching parity with its Zimbabwean namesake as a result.

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Ah but with dirt cheap credit and soaring inflation Americans will find it hard to resist rubber dog toys, even at $ 500 each, because they know that with inflation the price will be $ 550 in six weeks' time, so it will be like an investment. They can always pay the balance off later, right?

The Chinese already seem to own Thailand so we should be OK here.

Originally Posted by Thormaturge

When Obama gives everyone the money for their replacement rubber dog toys China will have avoided a recession and will be growing in double digits gain.

No problem.

US government borrows money from China to give to its citizens to buy goods from China. Does anyone see that there could be a slight problem here in the long term?

^
Yes, America winds up with the rubber dog toys and China gets the money.

Just hope rubber dog toys hold their value.

Originally Posted by Thormaturge

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Yes, America winds up with the rubber dog toys and China gets the money.

Just hope rubber dog toys hold their value.

The joke will be on the Chinese when the value of the $US crashes.
Sort of like borrowing $100 worth of goods and only having to pay back $50s worth down the line. The trap hasnt sprung just yet and just about every country other than USA stands to loose when it does. Such is the worlds resistance to move on to a new monetary system that could rectify the current imbalances between $US paper money and actual goods and services. It has to come sooner or later though.

Originally Posted by Panda

It has to come sooner or later though.

Oh, it will be soon, sure enough. The bailouts part two will be the trigger, as I said when bailouts part one was mooted.

If America thinks the world's banks will get caught a second time then it is in for a shock. Well, more precisely Obama is in for a shock.

The key is going to be those Treasury bills. Who on Earth is going to buy a T Bill returning 2% per annum in a depreciating currency? Sure American pension funds will lap them up for the security but I cannot see any overseas investors falling for this one again. This time it will be the American pension funds that bear the brunt of the economic downturn leaving millions of US pensioners unable to retire.

^
The only thing propping up the Euro just now is the German economy but it has a huge millstone around its neck (as in the rest of Europe).

Soon the world will bow to the superior economic status of Thailand.

well, either Thailand or the UAE.

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 has already happened.

Furthermore, the US doesn't need Thailand for agricultural imports. It has California. Look it up.

^
You're between a third and a quarter of the way through the correction. Hope you didn't think that 2008 was it.

Imports from Thailand have been increasing. Look it up.

Originally Posted by lom

My prediction:

The 2 most overvalued currencies in the world, the US dollar and the British pound
will drastically lose their appreciation.

After summer, 1 Euro = 1.25 GBP = 1.65 USD

London will lose it's position as the financial centre of Europe.
Frankfurt will become the new centre.

Currency movements and the location of a financial 'centre' are completely unrelated, so I am unsure to why you have reached the latter conclusion.

The does remain about a 25% chance of a Euro break-up, with Ireland, Portugal, Italy, Spain and Greece coming close to peeling away. If this happens the Euro may get stronger, weaker or implode alltogether.

In accordance to what I have been reading, all trade agreements are going to be reviewed with the new administration, this will leave Thailand sadly wanting. good2behappy is probably correct about the USA following a protectionist policy, and Thormaturge statement about the unions is also correct. Globalization isn't working, what western country can compete with 200 baht a day wages? The answer and the solution is to close the doors. Increase all tarrifs on imports to match domestic prices, and let the country rejuvenate itself. Countries such as Thailand will have to find other markets or follow the self sufficiency doctrine. I'm sure Europe will be glad to pick up whatever slack there is, created by the terrible US of A. They are much kinder, much more educated, have tons of refined culture, and no money worries.

Originally Posted by Panda

Originally Posted by Thormaturge

^
Yes, America winds up with the rubber dog toys and China gets the money.

Just hope rubber dog toys hold their value.

The joke will be on the Chinese when the value of the $US crashes.
Sort of like borrowing $100 worth of goods and only having to pay back $50s worth down the line. The trap hasnt sprung just yet and just about every country other than USA stands to loose when it does. Such is the worlds resistance to move on to a new monetary system that could rectify the current imbalances between $US paper money and actual goods and services. It has to come sooner or later though.

Its not just the Chinese - its all of Asia. I have just posted an excellent (but scary) article on the subject here:

https://teakdoor.com/us-domestic-issu...tml#post903050