Last edited by Flecco (2009-03-25 07:50:21)
And the countries you mentioned are doomed.AussieReaper wrote:
2:33
"You cannot spend your way out of recession or borrow your way out of debt."
Well, that is exactly what you have to do. This guy talks pretty but doesn't really understand what is happening globally. This is the same strategy Australia is taking. It is the same strategy the US is taking.
eh, I have to admit; I'm on the warpath this morning.DrunkFace wrote:
Hate to tell you ATG but Australia has one of the most stable economies in the world atm. We have yet to have a quarter of contraction let alone being in recession.
I remember when the Finance Minister said that. Was it on 7:30 report or QandA?Burwhale wrote:
The Aussie Govt is borrowing at the moment, but it is pretty conservative. Its the equivalent of a person that makes 100K per year getting a personal loan for $5000. Not too bad for now. It has stimulated spending, and will continue to so I dare say we are far from doomed.
That isn't the picture my youngest brother painted, recently returned from Oz due to the absence of any employment opportunities whatsoever.DrunkFace wrote:
Hate to tell you ATG but Australia has one of the most stable economies in the world atm. We have yet to have a quarter of contraction let alone being in recession.
There's plenty of areas still hiring. depends what his skill was, different countries are short on different jobs and saturated with othersCameronPoe wrote:
That isn't the picture my youngest brother painted, recently returned from Oz due to the absence of any employment opportunities whatsoever.DrunkFace wrote:
Hate to tell you ATG but Australia has one of the most stable economies in the world atm. We have yet to have a quarter of contraction let alone being in recession.
NT economy is pretty fucked up at the moment. My older bro has had his hours slashed and has been shuffled around a lot. A company I used to work for has pretty much collapsed in that same town. Went from 20+ people to about 5 over-night and it's looking like it will fold completely over the next few months.Little BaBy JESUS wrote:
There's plenty of areas still hiring. depends what his skill was, different countries are short on different jobs and saturated with othersCameronPoe wrote:
That isn't the picture my youngest brother painted, recently returned from Oz due to the absence of any employment opportunities whatsoever.DrunkFace wrote:
Hate to tell you ATG but Australia has one of the most stable economies in the world atm. We have yet to have a quarter of contraction let alone being in recession.
CameronPoe wrote:
That isn't the picture my youngest brother painted, recently returned from Oz due to the absence of any employment opportunities whatsoever.DrunkFace wrote:
Hate to tell you ATG but Australia has one of the most stable economies in the world atm. We have yet to have a quarter of contraction let alone being in recession.
Last edited by DrunkFace (2009-03-26 05:31:27)
Minerals boom + reasonably sound financial policy for a good few years that led to a pretty decent budget surplus and some awesome foresight from the Prime Minister who came before Howard (superannuation hax).FEOS wrote:
Australia hax.
The only thing that is different about this recession is the amount of debt that preceded it.AussieReaper wrote:
Doomed?
You know the last time there was a global recession, it led to a depression and many people committed suicide. Then the US recovered. As did the rest of the world. What makes this any different? There is going to be a recovery. It might take a year, 18 months, whatever. This isn't permanent. The banks will start lending again. And most estimates have predicted an 18 month global recession, but nothing close to depression figures.
Yeah had the US been in surplus when the stimulus packages were released the dollar would not have devalued as greatly as it has, however had you been in huge surplus your dollar would have been set at an higher than actual value because of the deflation caused by having such a huge surplus. Once the money came out the value of your dollar would have fallen also. If the govt has a surplus, that is simply tax money which hasn't been spent.Turquoise wrote:
The only thing that is different about this recession is the amount of debt that preceded it.
Back when the Great Depression occurred, the American government owed very little debt compared to today's debts (even when adjusting for inflation).
The problem is that when you already have a massive amount of public debt before entering a deep recession, it's hard to borrow your way out without your currency plummeting.
I may end up very wrong about this, but I'll say it anyway. I believe that the U.K. will completely switch over to the Euro and leave behind the pound in the next 10 years because of the current trend they're facing. I know it's very unpopular to make the switch, but if the pound takes much more of a beating, I think public sentiment will change.
As for the American dollar, I'm rather fearful of where its value is headed as well. It would seem that the Euro may soon become the world's premiere currency.
If anything, it looks like China will be buying a lot of American and European assets soon....AussieReaper wrote:
Yeah had the US been in surplus when the stimulus packages were released the dollar would not have devalued as greatly as it has, however had you been in huge surplus your dollar would have been set at an higher than actual value because of the deflation caused by having such a huge surplus. Once the money came out the value of your dollar would have fallen also. If the govt has a surplus, that is simply tax money which hasn't been spent.
The problem was compounded not only just by foreign debt (owed mainly to China) but even a number of states were running with huge deficits, and still are. There's about to be plenty of banks with bad investments, about to have them bought in the hopes that with the debt removed they start lending again. The US recovery needs to be matched by the major banks in Europe before the problem starts to correct itself.
Borrowing your way out of the recession is still the solution to the recession. I agree that the price you pay is a falling dollar value. But a falling dollar does not affect your economy anywhere nearly as badly as negative jobs growth and plummeting GDP in a global recession. Because it is a global recession your dollar isn't the only one which is falling. As I said, the US isn't the only country using stimulus packages and bailouts.
Wait until you see the result of the G20 meeting before thinking Britain will change to the Euro (although I think it is inevitable that they make the switch). You're going to see some reform on the International Monetary Fund, a country like China is going to be given a greater role in supporting the Fund and a coordinated recovery will be looked at by the big global financial powers.
China has already amassed a $1 trillion-plus portfolio of US bonds since you fell into recession.Turquoise wrote:
If anything, it looks like China will be buying a lot of American and European assets soon....
I gotta hand it to China. They know how to play their cards. They're beating us at our own game, essentially.AussieReaper wrote:
China has already amassed a $1 trillion-plus portfolio of US bonds since you fell into recession.Turquoise wrote:
If anything, it looks like China will be buying a lot of American and European assets soon....
Australia has a debt with China around $200 billion, about to rise again soon. But we've been able to negotiate quite a bit because Chinas own growth is tied closely to our mineral wealth. Unfortunately they've managed to buy up some mining stock so they will be virtually buying from companies they have a large stakeholder position with anyway.
The G20 summit is going to hopefully make China buy some bank assets around the globe, which is where the money is needed, and where the stimulus and recovery packages should be going. Buying up the toxic bank assets which has made the banks stop lending.
Last edited by Mutantsteak (2009-03-26 16:02:23)
