It's cold, it's rainy, it's the Saturday Open Thread. This weeks conversation starter: Double dip recession: Yea or Nay?
4 comments:
Anonymous
said...
Ok I'll go... Yes double dip underway for sure in the USA, as predicted many months ago. Depression already here, to last for several years, with unemployment topping at above 15% sometime in the next two years. Bernanke out of ammo, housing TANKING, banks going bust left right and center. Rush to gov bonds (gold/silver?), Dow to track sideways and downwards between 12 000 and 8 000 (?) for a few years. Weak stimulus fends off deflation and slows its rate, but deflation will take hold for many months at least. Krugman was right, Paulson was WRONG. US consumer, bend over and kiss yer ass goo'bye. US housing deflates by a further 50% to return to long term average. Dollar? difficult. What do the Chinese do with their bonds?
UK - hmmm - austerity bites - deflation comes in a rush, and catches them unawares, social disruption, banking sector dead, London property implodes. Disinvestment in social and education spending gives us at least one lost generation in the UK, bar the elite.
EU - German industriousness can pull them out, mainly via car sales in China. No major housing bubble to worry about, but housing continues to trend side/downwards for some years, and coastal/Med property continues to tank. Hard times, but Brussels holds the center through Germany - Germany finally achieves the domination of Europe that eluded them in two world wars.
Russia - oh boy - Russia/Iran, the birth of a new evil twin partnership? Germany had BETTER get it together otherwise we're in the poo a few years from now as the Russian/Iranian axis gears up.
China - flirting with social unrest and unsustainable environmental/industrial labour policies. Turbulent times slows their growth to mid single digits.
Global - hard times, border taxes, protectionism, de-globalisation, environmental disasters rise in frequency as the sun perks up from the low point in its 22 year cycle, and increasingly exacerbates greenhouse warming for the next ten years - climate change deniers are put on trial for misleading the world! :)
Tough ask, South Africa - ya well - the key drivers are more political than economic, so not possible to foretell even at the uncertain level typical of economic forecasts! Scenario 1: ANC/Unions/SACP split - ANC hangs on bitterly for the next decade at least against annually increasingly bitter strikes. Rand trends downwards. Housing flat to down. Chinese "investments" make some cadres very rich, the others out in the cold get increasingly livid. Western Cape holds out for a decade or more, but the political scene is increasingly fractured, with more Malema-like voices coming to the fore. Scenario 2: Tripartite Alliance stills leftist voices and forges an increasingly positive investment and growth path. Rand flat to stronger on Chinese exports and positive balance of payments. Employment returns, interest rates rise, but not enough to dampen slow growth in house prices. And then you wake up from the dream :)
4 comments:
Ok I'll go... Yes double dip underway for sure in the USA, as predicted many months ago. Depression already here, to last for several years, with unemployment topping at above 15% sometime in the next two years. Bernanke out of ammo, housing TANKING, banks going bust left right and center. Rush to gov bonds (gold/silver?), Dow to track sideways and downwards between 12 000 and 8 000 (?) for a few years. Weak stimulus fends off deflation and slows its rate, but deflation will take hold for many months at least. Krugman was right, Paulson was WRONG. US consumer, bend over and kiss yer ass goo'bye. US housing deflates by a further 50% to return to long term average. Dollar? difficult. What do the Chinese do with their bonds?
UK - hmmm - austerity bites - deflation comes in a rush, and catches them unawares, social disruption, banking sector dead, London property implodes. Disinvestment in social and education spending gives us at least one lost generation in the UK, bar the elite.
EU - German industriousness can pull them out, mainly via car sales in China. No major housing bubble to worry about, but housing continues to trend side/downwards for some years, and coastal/Med property continues to tank. Hard times, but Brussels holds the center through Germany - Germany finally achieves the domination of Europe that eluded them in two world wars.
Russia - oh boy - Russia/Iran, the birth of a new evil twin partnership? Germany had BETTER get it together otherwise we're in the poo a few years from now as the Russian/Iranian axis gears up.
China - flirting with social unrest and unsustainable environmental/industrial labour policies. Turbulent times slows their growth to mid single digits.
Global - hard times, border taxes, protectionism, de-globalisation, environmental disasters rise in frequency as the sun perks up from the low point in its 22 year cycle, and increasingly exacerbates greenhouse warming for the next ten years - climate change deniers are put on trial for misleading the world! :)
and South Africa, since this is where we live?
Tough ask, South Africa - ya well - the key drivers are more political than economic, so not possible to foretell even at the uncertain level typical of economic forecasts!
Scenario 1: ANC/Unions/SACP split - ANC hangs on bitterly for the next decade at least against annually increasingly bitter strikes. Rand trends downwards. Housing flat to down. Chinese "investments" make some cadres very rich, the others out in the cold get increasingly livid. Western Cape holds out for a decade or more, but the political scene is increasingly fractured, with more Malema-like voices coming to the fore.
Scenario 2: Tripartite Alliance stills leftist voices and forges an increasingly positive investment and growth path. Rand flat to stronger on Chinese exports and positive balance of payments. Employment returns, interest rates rise, but not enough to dampen slow growth in house prices. And then you wake up from the dream :)
go with scenario 1
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