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Ask HN: Are we in trouble?

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Re: Ask HN: Are we in trouble?

#21

Post by antpicnic »

How can we help but go through a slow period while households and banks repair their balance sheets? Just increasing the savings rate from the current 5% in January to a more sustainable 10-14% means people will need to forgo a of consumption. I doubt the wheels will fall off completely.

You younger folks on HN have a great opportunity to save your money now and make a killing in 25 years. The stock market could lose another 30% and then move laterally for several years. But over a few decades, you might average 8% returns annually. Just remember to sell out before the great crash of 2049.

Re: Ask HN: Are we in trouble?

#22

Post by cpr »

One depressing take: Jim Kunstler's The Long Emergency (a book, summarized here: http://www.rollingstone.com/news/story/7203633/the_long_emer...).

I'm afraid I think he's right (even if he's indulging in a lot of schadenfreude)--it's just a matter of timing. Our society isn't going to survive the peak oil crash intact.

The bright side is that we'd have to become hyper-local in our economy, give up the hyperconsumerist dreamland of suburbia, big box stores and electronic entertainments, and deal with the real world.

Re: Ask HN: Are we in trouble?

#23

Post by jfornear »

SwellJoe wrote: post #19
jfornear wrote: post #16

Earlier quoted context omitted.

FYI Peter Schiff is the economic advisor behind the politician, Ron Paul. [EDIT: for the 2008 Presidential Campaign] Much of what Schiff predicts are dependent on the rest of the world 'cutting us off' by depegging their currencies from the dollar and turning away from treasury bonds -- both of which are not happening, and to the contrary, much of the world is turning toward our treasury bonds in this crisis. Oil bei…

I've never heard of Peter Schiff being related to Ron Paul in any particular way (not saying he isn't, but "behind the politician" seems extremely implausible). I'll point out that Ron Paul's basic premises are what he's been espousing since the 1970s, when Peter Schiff was about ten years old. Wikipedia says "Schiff was an economic adviser to Ron Paul's 2008 presidential campaign." Sounds like he was one of multiple…

You're right, I overreacted. I just don't like seeing a politician trained in medicine given the same credibility on economic analysis as someone with a technical background in finance. Not to downplay Ron Paul's solutions to our economic problems, but I've never seen him make an in depth case for why we are where we are today like Schiff has -- his job doesn't call for it.

Re: Ask HN: Are we in trouble?

#24

Post by chiffonade »

tom_rath wrote: post #6

Yeah, probably. But while you're slogging through it remember this: It will get better. "The Greatest Generation" emerged from the Depression, the dot.com boom followed the Gen-X "McJob" years and the "something-something" will follow whatever we end up calling this mess. Ask any unlucky sod who finished school just in time for the last nasty recession and they may tell you how unbelievably bleak and hopeless things…

> something-something" will follow whatever we end up calling this mess.

The boom that follow this shitcan of an economy will favor the operationally frugal and those who know how to turn a dollar out of fifteen cents. No doubt some clever writer at WIRED magazine will coin some catchy term for this generation of people in the year 2011. It will coincide conveniently with the rise of Green revolution, no doubt.

Re: Ask HN: Are we in trouble?

#25

Post by chiffonade »

wwsculley wrote: post #11

The economy lost an enormous chunk of itself. It will need to correct for this change - whether now or later. The world will have to call USA's debt some time. My big question: will the rest of the world continue to use USA's economy and currency as the global economic focal point and medium? -or will it abandon them for alternatives?

> My big question: will the rest of the world continue to use USA's economy and currency as the global economic focal point and medium? -or will it abandon them for alternatives?

Here's the crux of the matter: there are no alternatives. The US is a meta-country that drives the rest of the world. It's a proxy for the world.

Re: Ask HN: Are we in trouble?

#27

Post by NyxWulf »

Eliezer wrote: post #5

Anyone who could predict whether the market would be up, down, or in the same place in six months time - or one month's time for that matter - could become very rich in a very short time.

Unfortunately there are many people making predictions about where the market will be. The real question is can someone make a prediction, commit capital, and realize a gain based on those predictions. Only time will tell, and for those of use watching from the sidelines, it's virtually impossible to tell who will be right, and if they are right that it's because they deeply understand the fundamentals of the problem versus just randomly having the right prediction for the wrong reasons.

Re: Ask HN: Are we in trouble?

#28

Post by 1gor »

Eliezer wrote: post #5

Anyone who could predict whether the market would be up, down, or in the same place in six months time - or one month's time for that matter - could become very rich in a very short time.

The following NH comment thread has predicted current recession http://news.ycombinator.com/item?id=102176 but I doubt anyone has became rich because of that.

Re: Ask HN: Are we in trouble?

#30

Post by tallanvor »

chiffonade wrote: post #25
wwsculley wrote: post #11

The economy lost an enormous chunk of itself. It will need to correct for this change - whether now or later. The world will have to call USA's debt some time. My big question: will the rest of the world continue to use USA's economy and currency as the global economic focal point and medium? -or will it abandon them for alternatives?

> My big question: will the rest of the world continue to use USA's economy and currency as the global economic focal point and medium? -or will it abandon them for alternatives? Here's the crux of the matter: there are no alternatives. The US is a meta-country that drives the rest of the world. It's a proxy for the world.

Exactly.

Countries such as India and China have done very well in large part due to investments by Americans and American companies. Even during Japan's recession, the US economy helped keep Japan going. People and countries all over the world invest in the US dollar - Even today, when interest rates are at an all time low, T-Bills are still considered safe investments.

Will the economy continue to change and evolve? Of course. But America's place in the world economy is not likely to change in the near future.

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