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Economic Situation

Discussion in 'General Chat' started by snoopy, Oct 28, 2011.

  1. snoopy

    snoopy Registered Members

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    "Live and learn," the old saying goes. The economic situation in recent years has taught us all some valuable lessons. Saving more, buying less and spending more quality time with each other are just some of the ways the economy has changed many families. What are your thoughts on the economic situation?
     
  2. woodyblade

    woodyblade Inactive Staff Member

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    The short answer in my opinion would be no we won't learn, the long answer...

    Bankers didn't learn anything as they got bailed out and are getting large bonuses still, the markets are kicking up a fuss about European debt so they can get out of the bad sovereign debt, to cover their backsides further and load the bad debt onto the ordinary taxpayer as if we're all thick and won't realise that we are being treated as cash cows for those who are rich to stay rich.

    I could probably guarantee that these mistakes will be made again, but that would be pessimistic, but I know for a fact that some combination of factors will bring us down again and these are just a couple I can think of at the moment

    1. Human greed, as I have said elsewhere on here as soon as people saw money signs they took a loan, mortgage, credit card etc. Not taking the time to see if they could afford it, that ultimately weakened the banks who were over-leveraged, it doesn't matter that the banks shouldn't have offered the money in the first place, the fault lays with the person/s who spend it and are agreeing to the terms on offer.

    2. People in charge, I can't say this for all countries but in the UK our elected parliamentarians during the good years decided to overspend year after year after year, when the recession came we weren't prepared and thus suffered one of the worst recessions in the Western world and our recent history. If they had built the budget up gradually and continued to pay off Government debt then maybe we would have faired better, as we wouldn't be having to borrow £120bn this year and a similarly high amount for the last couple of years.
    The Germans are a good example of fiscal stability, with good saving rates per household and a well run Government budget, even if their Government debt is higher than the UK's, they only have a 4-5% budget deficit compared to 10-11% in the UK, not bad through a recession as they don't have to make such high cuts like the UK Government does.

    So yes unfortunately I'm as pessimistic as they come, mainly because I'm a grumpy moaning bugger, bodes well when I'm older :D :p
     
  3. snoopy

    snoopy Registered Members

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    A bit of a different picture in Canada. Our banks are regulated and considered as very stable. Our Prime Minister is an Economist so if anyone knows, he should how to deal in tough economic situations. We bailed out some of the auto industry [GM] much to the complaining of many Canadians. However, hundred of workers became unemployed when the industry was troubled so the choice was either to bail out the company and allow workers to be employed or not to bail out the company and have the unemployment rates rise. With the bailout, they went back to work and the auto industry has paid back the money to government. However, the CEO's tried to milk money from the bailout for bonuses for themselves and that was quickly dealt with. The company is doing quite well now and workers are now talking of going on strike for higher wages & benefits.

    When people overspend and over-extend their debt then they get into trouble. As a retired bank employee, when couples earning a very good wage, came to borrow money for a vacation and did not even own their own home or have any savings, they were shocked when they were refused a loan. Why? Because they are considered a high risk in not repaying. A person can earn low wages and be granted a loan if it is shown they manage their money well within their budget.... they are not considered a high risk.

    IMHO Canada weathered the recession reasonably well and still many Canadians are complaining because they have to pull in the purse strings. I have seen "help wanted" signs in stores that they are hiring. My cleaning lady makes good money ... she is paid $30.00/hr. [my suite is not big] which I do not consider shabby. In bigger cities cleaning ladies get $40.00/hr and up. House prices rose although sales slowed down. This recession has not stopped people from heading into warmer climates for the winter months ... and these are ordinary income earners and not the wealthy.

    The bottom line is if Europe doesn't get themselves out of the mess, it will affect Canada negatively. So we are "not out of the woods" so to speak.
     
  4. woodyblade

    woodyblade Inactive Staff Member

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    Yep Canadians came out fairly good as did the Australians, but one thing the Canadians and Australians have compared to Europe is a lot of resources like Coal and Oil, it's not that Europe is totally devoid of resources as I'm fairly sure we supply ourselves sufficiently with Oil and get a lot of Gas from Russia.
    The advantage is that Canada and Australia have small populations and massive amounts of resources, sort of like Alaska with Oil and it's 700,000 or so population getting a $1000 rebate each year.

    Europe is smaller than Australia in terms of land mass, 400 million people live in Europe compared to 20 million and 36-37 million in Australia and Canada respectively, so more than likely we're consuming all our resources and aren't able to sell as much, I know that what the UK gets out of the North Sea in Oil is only just enough or just a little bit below what we need for the country to continue running.

    So a resource boom is becoming the growth in Canada and Australia, meaning wage demands can increase more across the board.

    From what I've been reading in Australia the Central Bank doesn't know whether to raise interest rates for miners and manufacturing or leave it as it is for the consumer to try encourage spending, quite a predicament, I don't know if Canada's central bank is in the same position but I wouldn't be surprised if they are.

    The best way for Europe to get out of this and try create a resource boom of it's own would to invest in fuels of the future, like Hydrogen, Wind Power and Tidal Power for example and export those fuels or power, but whether that will happen or not is another story.
     
  5. snoopy

    snoopy Registered Members

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    It does not appear that the Central Bank of Canada is going to raise rates any time soon. There is a lot of talk going on. The last time I seriously listened to the news was that the unemployment rate has dropped and that job creation is ongoing. It is a bit harder when it comes to trade as our dollar has risen at par or more to the U.S. which makes our exports more expensive .. however, imports are cheaper although I do not seem to see that reflect when shopping. :rolleyes: Another thing that is positive is that the powers that be will be looking into the excessive credit card rates by banks & stores on unpaid balances. It is time they came down which would put more money into the pockets of those who need it badly.
     
  6. QuilEmbry

    QuilEmbry Guest

    Retiring abroad seems attractive, as many countries are amazing places that are less expensive to live in than the United States However, there are a ton of things one has to think about before pulling the trigger. Get help with your medical bills with a cash advance. A lot of employees have been asked to retire early so that the company that they are working at will be able to laid off some workers. It is very hard to survive during recession because a lot of people have lose their jobs and don't have enough savings for their families to survive.
     

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