Recession is over or just a prep for Christmas Shopping time ?

[Francis2004]

So the Bank of Canada says the recession in Canada is over and many of my US counterparts tell me the uptick in the US states the same.

However backlog and firm new orders are still not showing a great improvement to substantiate this claim and only shows the recession has finally bottomed, not started to pull out..

The interesting thing I have seen in the media is how they have been spinning it to prepare us for a fall rise in sales in stores. Hence a great Christmas shopping..

Do you tend to agree and will this help the economy in the long run. We all know boosting / lowering consumer confidence can affect it regardless of it being true or false..

 

[Ron in Regina]

The Canary in the Coal Mine for the economy is the transport industry. You want
to know where things are going (or that they where going to pot before anyone seemed
to notice), ask someone who hauls the goods that people will buy when the economy
improves.

If the Trucking Industry is still sucking air...then that's not a good sign. Talk to a couple
of Truckers to get an idea of where things are going. If two out'a three try to sell you
their trucks...that's not a good sign.

 

[Francis2004]

The Canary in the Coal Mine for the economy is the transport industry. You want
to know where things are going (or that they where going to pot before anyone seemed
to notice), as someone who hauls the goods that people will buy when the economy
improves.

If the Trucking Industry is still sucking air...then that's not a good sign. Talk to a couple
of Truckers to get an idea of where things are going. If two out'a three try to sell you
their trucks...that's not a good sign.

I understand that view Ron and it makes total sense.. Being that two brothers are in the trucking industry I can relate but the point these stock / Bank guys are making is that the product will start to move in Oct to Nov.. They say China is already moving fast and that many are following..

I still don't see it and don't believe it, but the belief is that if we tell people it will happen, they will make it happen..

Are we creating false expectations.. I believe we are..

 

[Cliffy]

I understand that view Ron and it makes total sense.. Being that two brothers are in the trucking industry I can relate but the point these stock / Bank guys are making is that the product will start to move in Oct to Nov.. They say China is already moving fast and that many are following..

I still don't see it and don't believe it, but the belief is that if we tell people it will happen, they will make it happen..

Are we creating false expectations.. I believe we are..

The recession happened because the bankers/stock brokers said it was happening. We believed them and stopped spending. As my friend said "It was a controlled demolition." Now it is a controlled reconstruction. Those at the top of the food chain made billions off the demolition and they will make billions of the reconstruction. They manipulate the markets like they manipulate your minds.

 

[Machjo]

Now what we need to keep an eye out for is the oncoming inflation, labour shortages, high interest rates, and debt.

We put alot of stimulous money into the world economy over the course of the recession. Unless we want an uncontrolled boom to wreak havock on our money, we'll have to rake all that money out of the economy again as soon as we're back in inflation.

 

[AnnaG]

The recession happened because the bankers/stock brokers said it was happening. We believed them and stopped spending. As my friend said "It was a controlled demolition." Now it is a controlled reconstruction. Those at the top of the food chain made billions off the demolition and they will make billions of the reconstruction. They manipulate the markets like they manipulate your minds.

That's about the size of it, Cliffy. It is called disaster economics I understand. It is all synthetic.
And as I said before, the BoC was so smart about economics, they were blindsided by the crash. I find it kind of hard to believe what they say. Just like pols, I am a wee bit incredulous about what they say.

 

[AnnaG]

Now what we need to keep an eye out for is the oncoming inflation, labour shortages, high interest rates, and debt.

We put alot of stimulous money into the world economy over the course of the recession. Unless we want an uncontrolled boom to wreak havock on our money, we'll have to rake all that money out of the economy again as soon as we're back in inflation.

lol I'd like to deflate the stock market, big business, and banks. lol

 

[Machjo]

lol I'd like to deflate the stock market, big business, and banks. lol

We may have no choice but to do it soon enough. Just give it a few months and the recession will be history, but we won't be out of the woods yet. Remember, we put alot of money into the economy over the course of the recession. And if inflation strikes, the poor won't be able to afford to pay for it. Essentially, there'll be no choice but for government to either increase taxes or drastically cut spending or both. Or, I suppose, it could decide to let the poor pay for it by just letting inflation and interest rates rise.

But if it cares about the poor, it will have no choice but to either increase taxes on those who can afford it, slash government spending, or both.

 

[AnnaG]

hehehe I was kidding. But I agree with you.
I love the idea of gov'ts slashing spending. Trouble is they usually cut back in the worst ways.

 

[SirJosephPorter]

lol I'd like to deflate the stock market, big business, and banks. lol

Anna, deflate the stock market? And the banks as well? My, just how much blasphemy is one person capable of?

Don’t talk about deflating the stock market. My stocks have gone up nicely, I have made up whatever I lost in the Bush meltdown, my portfolio is the highest it ever was (mainly thanks to bank stocks). And you talk of deflating yet again?

I don’t think we want any deflation, not in the stocks anyway.

 

[SirJosephPorter]

But if it cares about the poor, it will have no choice but to either increase taxes on those who can afford it, slash government spending, or both.

That has to be the next step, Machjo. But government will have to wait until employment is on the rise again. Inflation is really not much of a worry while we have high unemployment (though in the 70s we did have stagflation, the theoretically impossible situation of high inflation and high unemployment at the same time). While unemployment is high, there won’t be enough of a demand for goods to cause inflation.
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[AnnaG]

Anna, deflate the stock market? And the banks as well? My, just how much blasphemy is one person capable of?

Don’t talk about deflating the stock market. My stocks have gone up nicely, I have made up whatever I lost in the Bush meltdown, my portfolio is the highest it ever was (mainly thanks to bank stocks). And you talk of deflating yet again?

I don’t think we want any deflation, not in the stocks anyway.

:roll: I just finished saying I was kidding.

 

[SirJosephPorter]

However backlog and firm new orders are still not showing a great improvement to substantiate this claim and only shows the recession has finally bottomed, not started to pull out..

Francis, stock market is the leading indicator of what will happen to the economy six months down the line, and it usually is fairly accurate. If it is accurate this time, we have reached the bottom and we may have started the recovery. However, recovery cannot really be said to be occurring until unemployment starts coming down.

 

[SirJosephPorter]

:roll: I just finished saying I was kidding.

I know that Anna, and so was I. Otherwise why would I refer to it as blasphemy?

 

[AnnaG]

Being a right-wing religious nut, I wouldn't know, would I?

 

[Machjo]

But if it cares about the poor, it will have no choice but to either increase taxes on those who can afford it, slash government spending, or both.

That has to be the next step, Machjo. But government will have to wait until employment is on the rise again. Inflation is really not much of a worry while we have high unemployment (though in the 70s we did have stagflation, the theoretically impossible situation of high inflation and high unemployment at the same time). While unemployment is high, there won’t be enough of a demand for goods to cause inflation.

Actually, seeing how it can take time for policy to take effect, as soon as our inflation rate goes back into the positive range, it would be wise to start taking action right away. Employment would continue to increase owing to the stimulouse put into th eeconomy already (like I said, it takes awhile for policy to trickle down). Meanwhile, the counter-inflationary policies adopted as soon as we go into inflation woudl then kick in before interest rates start getting out of hand. If we take such a policy when inflation and interest rates are already out of hand, then by the time the policy's effects start to be felt, we'd already be running near hyperinflation.

 

[Francis2004]

However backlog and firm new orders are still not showing a great improvement to substantiate this claim and only shows the recession has finally bottomed, not started to pull out..

Francis, stock market is the leading indicator of what will happen to the economy six months down the line, and it usually is fairly accurate. If it is accurate this time, we have reached the bottom and we may have started the recovery. However, recovery cannot really be said to be occurring until unemployment starts coming down.

Most people having shares in companies would love to believe this false theory.. It gives you hope.. Fact is stocks do not generate orders and backlog, only demand does..

The leading indicator of an economy getting back to health is consumer confidence and without it you have a stagnant economy.. As long as non-perishable good do not improve because people do not have job, employment will stay high in a vicious cycle..

The only way they can avoid that is by creating false expectations and hope people start to shop on CREDIT.. This has worked in the past and kicked started the economy.. If it fails it will create a whole bigger mess of defaulted credit and people who will not be able to purchase much for a minimum 5 to 7 years and stagnate the economy further..

Let us hope for the sake of us all that the economy does pick up and employment goes down..

 

[Cliffy]

I was hoping for a complete meltdown. We need a new economic model based on reality not speculation. We need to get away from endless growth, mindless consumerism and increasing environment degradation. Our economy is why our life support system is failing. You can't eat money, you can't breath goods. If the economy recovers and returns to the same cycle of mindlessness it has been, you can kiss your asses goodbye sooner than later.

 

[Nuggler]

:roll: I just finished saying I was kidding.

He never gets it.

 

[sirlorenzo]

I agree with cliffy. This system we have is 100% unsustainable