Is another economic depression on the way

[nazimhamed]

Oil prices are sky high, this is gonna increase inflation, which in turn will lead to higher interest rates.

I think a stock market crash is well overdue, and I hope one takes place sooner rather than later so house prices can come down.

[labtec12]

wait.. i thought inflation and interest rates were inverse to one another ?? or am i mistaken.. haven't dealt wiht it for the longest time..

[Monica152]

well...theres a house 4 sale in my neighborhood but taxes r 2 high....:no:

[reaz]

well the interest rates go up in order to curb inflation.. it slows down the economy..

[bender]

Oil prices are sky high, this is gonna increase inflation, which in turn will lead to higher interest rates.

I think a stock market crash is well overdue, and I hope one takes place sooner rather than later so house prices can come down.

Oil prices alone won't increase interests rates. It's the increase/decrease in the CPI that the Fed watches to decide if an increase or decrease in interest rates is needed.

[reaz]

Oil prices alone won't increase interests rates. It's the increase/decrease in the CPI that the Fed watches to decide if an increase or decrease in interest rates is needed.

What's CPI?

[TechPhunk]

a recession is predicted in the coming months.

[labtec12]

What's CPI?
counsumer pricing index...

[nazimhamed]

a recession is predicted in the coming months.

yeah with a bit of luck. We need a reccession in the UK to calm down house prices. I'd love to get a place of my own but its so unbelievably expensive, I'm praying for a housing market crash.

[chakdephute]

yeah with a bit of luck. We need a reccession in the UK to calm down house prices. I'd love to get a place of my own but its so unbelievably expensive, I'm praying for a housing market crash.
Dude how can you even say that? Can you imagine how all those families would be affected who own a home and have it as their primary and only asset?

If you want a house just save, save, save. Live in an apartment for the meanwhile, build up your credit and get a solid savings going by secruing a decent job. Then, and only then will you be ready to own your own house.

[TechPhunk]

yeah with a bit of luck. We need a reccession in the UK to calm down house prices. I'd love to get a place of my own but its so unbelievably expensive, I'm praying for a housing market crash.

sales of property/real estate dipped 3% compared to last year over here. too many people got into the real-estate investing trend and now no one wants to buy.

[nazimhamed]

Dude how can you even say that? Can you imagine how all those families would be affected who own a home and have it as their primary and only asset?

If you want a house just save, save, save. Live in an apartment for the meanwhile, build up your credit and get a solid savings going by secruing a decent job. Then, and only then will you be ready to own your own house.

I was thinking more of those people who buy houses to let rather than families. I wouldn't want families to end up homeless, but I would like to see buy to let investing curbed. If these family people have been sensible and not borrowed using their homes as collateral they'll be fine.

How about some sympathy for young families of my generation who at present will never be in a position to own their own home.

I don't know if you're aware of the UK housing situation, but basically average house prices are about 10 times average salary. The average peron would need to save for at least 10 years in order to save enough for a decent deposit, and even after those 10 painful years theres another 25 years of mortgage payments to look forward to.

Recession is part of life, the economy works cyclically, and a downturn is due, and downturns are usually followed by another boom.

[nazimhamed]

well the interest rates go up in order to curb inflation.. it slows down the economy..
:yes:

Or put another way inflation means higher prices, Why?

Because people spend more, i.e. demand for goods and services is high, this in turn means supply is lowered.

usually people spend more when they are confident, also if the rates on their credit cards are low, they automatically buy more on credit.

Higher rates curb this type behaviour, by reducing consumer confidence, and therefore spending. This in turn brings prices back down to an acceptable level.

Of course higher interest rates has many other implications.

[ladoo20]

economists do predict that there may be a recession in the near future especially in the USA. One of th emajor reasons for that is the decline in the US dollar. it isnt the oil prices that have affected the US dollar so much.
one main reason for the drop of the US dollar is decline in american made products. since business run a countires economy, we can see that america has adapted a strategy of outsourcing their work. many companies do that now. this is of disadvantage because if the majority of companies out source their work, then what is left for the citizens...in the recent years hundreds of factories have shut down leaving many people jobless. another thing is that the demand for US product is not high. the reason again is that they outsource a large chunk of their production. because there is a lack in the need for US prodcutrs, this immediately decreases the dollar value. and we know when the dollar value goes down, inflation is on its way. and if it isnt taken care of by the goverment (which they control about 50 percent of the economy) then a recesssion is very likely

[reaz]

economists do predict that there may be a recession in the near future especially in the USA. One of th emajor reasons for that is the decline in the US dollar. it isnt the oil prices that have affected the US dollar so much.
one main reason for the drop of the US dollar is decline in american made products. since business run a countires economy, we can see that america has adapted a strategy of outsourcing their work. many companies do that now. this is of disadvantage because if the majority of companies out source their work, then what is left for the citizens...in the recent years hundreds of factories have shut down leaving many people jobless. another thing is that the demand for US product is not high. the reason again is that they outsource a large chunk of their production. because there is a lack in the need for US prodcutrs, this immediately decreases the dollar value. and we know when the dollar value goes down, inflation is on its way. and if it isnt taken care of by the goverment (which they control about 50 percent of the economy) then a recesssion is very likely


here the assumption is that the people who are jobless wont find other jobs at all.

[ladoo20]

here the assumption is that the people who are jobless wont find other jobs at all.

it isnt that they wont find other jobs. it is that there are les and less jobs. when a business is opened in a country, it boosts that countries economy, why because it creates jobs, ppl have more money, more money equals more production. there are so many major companies that outsource their work.

yea its true people can go find other jobs, but think of it this way. if a factory shuts down leaving 5000...whether those ppl find new jobs or not....there is a b ig loss alreayd in that economy. now if that factory goes and opens up in africa...theres a gain for that countries economy.

so its like being shifted. yes you do have to take into accoutn that thsoe ppl may find new jobs...but ecnomisits have their way of calculating these kinds of factors into account.

[Areez_UK_HUSTLER]

its definitely on its way I think. The price of property in the UK is at an all time ridiculous high!.......... Borrowing in this country is way OTT

and to top it all off, unemployement is at its highest!...........

I think an econimc depression is def on the cards! :-(

[reaz]

it isnt that they wont find other jobs. it is that there are les and less jobs. when a business is opened in a country, it boosts that countries economy, why because it creates jobs, ppl have more money, more money equals more production. there are so many major companies that outsource their work.

yea its true people can go find other jobs, but think of it this way. if a factory shuts down leaving 5000...whether those ppl find new jobs or not....there is a b ig loss alreayd in that economy. now if that factory goes and opens up in africa...theres a gain for that countries economy.

so its like being shifted. yes you do have to take into accoutn that thsoe ppl may find new jobs...but ecnomisits have their way of calculating these kinds of factors into account.

so you're saying more jobs are not being created? well reports would indicate jobs are being created in this nation. a lot of jobs infact. my guess is that since companies are increasing in size due to profits by outsourcing, they'd hire more people for other purposes or developing new products.

Basically outsourcing allows growth (foreign and local) and growth creates more jobs. That's the conventional wisdom. It would seem it's benefitting two economies at the same time.

[ladoo20]

so you're saying more jobs are not being created? well reports would indicate jobs are being created in this nation. a lot of jobs infact. my guess is that since companies are increasing in size due to profits by outsourcing, they'd hire more people for other purposes or developing new products.

Basically outsourcing allows growth (foreign and local) and growth creates more jobs. That's the conventional wisdom. It would seem it's benefitting two economies at the same time.


im thinking of it a different way.
it is more the shift of production from one country to another...that is what is the greater loss. the jobs is an outcome of that loss.
and outsourcing doesnt really benefit two economies..lol...especially in thrid world war countries, first the employees are under paid. the companies steel that countries natural ressources, and if any profit it only goes to the government of those countries. so it doesnt even benefit that economy. its just a loss to that countries economy. yea so you have to look at it that way, the shift in production

[reaz]

im thinking of it a different way.
it is more the shift of production from one country to another...that is what is the greater loss. the jobs is an outcome of that loss.
and outsourcing doesnt really benefit two economies..lol...especially in thrid world war countries, first the employees are under paid. the companies steel that countries natural ressources, and if any profit it only goes to the government of those countries. so it doesnt even benefit that economy. its just a loss to that countries economy. yea so you have to look at it that way, the shift in production

what makes you think they are underpaid?

if they were underpaid they would not work for the company. they are not being forced to work. when was the last time you willingly entered a job and bitched about being underpaid AND stayed with the company? I would never stay for a company that underpaid me.

how are the companies "stealing" that countries resources? and any profit goes to the government? ofcourse if you pay taxes the money goes to the government .. that's called "benefitting the economy".. i dont know what else is called "benefitting the economy"? it is not a loss to that countries economy if more people are being employed. I come from a 3rd world country where i've seen how people who would normally starve to death earn $2 per day at these sweatshops which still amounts to 3 meals a day in those countries. I think countries outsourcing to those nations is a boon because it really benefits those nations.

the shift in production.. now you have a point.. yes.. some jobs are being removed from here.. that's true.. however, people dont just give up and stop looking for jobs.. if i lost a job because my company outsourced, i'd try else where.. and i'd keep trying till it seemed that i could not get a job.. then i'd see if i can improve my qualifications. if not then i'd look to other types of jobs which dont need qualifications.. in any case i would not go unemployed..

[ladoo20]

what makes you think they are underpaid?

if they were underpaid they would not work for the company. they are not being forced to work. when was the last time you willingly entered a job and bitched about being underpaid AND stayed with the company? I would never stay for a company that underpaid me.

how are the companies "stealing" that countries resources? and any profit goes to the government? ofcourse if you pay taxes the money goes to the government .. that's called "benefitting the economy".. i dont know what else is called "benefitting the economy"? it is not a loss to that countries economy if more people are being employed. I come from a 3rd world country where i've seen how people who would normally starve to death earn $2 per day at these sweatshops which still amounts to 3 meals a day in those countries. I think countries outsourcing to those nations is a boon because it really benefits those nations.

the shift in production.. now you have a point.. yes.. some jobs are being removed from here.. that's true.. however, people dont just give up and stop looking for jobs.. if i lost a job because my company outsourced, i'd try else where.. and i'd keep trying till it seemed that i could not get a job.. then i'd see if i can improve my qualifications. if not then i'd look to other types of jobs which dont need qualifications.. in any case i would not go unemployed..


i think there may be some misunderstanding. most large companies that outsource, they are stealing that countires resources...human resources, natural resources, and that country is not being compensated for it. if it truly was a benefit for those coutires...why are they still the poorest when the majority of companies have so many factories there?
because those people are under-paid. now i dont know if 2 dollars a day is enough for them to get proper medical attention, and proper food, and a proper shelter....because even with so many factories there with so many jobs....their GDP per capita is still amongst the lowest. i dont know where ur getting ur information on how it is prosperous for those countries. you can pick up any book on this issue and you will see what the reality really is.
when i say they are stealing that countries resources...it means that their human ressource are being taken advantage of without proper compensation, thier natural ressources are being used without them getting any credit. if a foreign company opened up in north america, do you think that our governemtn would not tax them at all? because since our ressources are being used, then our government wants our country to benefit fomr it. if they didnt have to pay anything, then it would be a loss to our countries economy...no? so i guess if north american companies open up factories in those poor countires, pay thier workers 2 dollars a day, no tax, no kind of compensation, no kind of credit...it isnt benefitting their economy one bit.
anyways im not even an expert on this issue, maybe u should pick up a book or somethin and read up on it

[bender]

i think there may be some misunderstanding. most large companies that outsource, they are stealing that countires resources...human resources, natural resources, and that country is not being compensated for it. if it truly was a benefit for those coutires...why are they still the poorest when the majority of companies have so many factories there?
because those people are under-paid. now i dont know if 2 dollars a day is enough for them to get proper medical attention, and proper food, and a proper shelter....because even with so many factories there with so many jobs....their GDP per capita is still amongst the lowest. i dont know where ur getting ur information on how it is prosperous for those countries. you can pick up any book on this issue and you will see what the reality really is.
when i say they are stealing that countries resources...it means that their human ressource are being taken advantage of without proper compensation, thier natural ressources are being used without them getting any credit. if a foreign company opened up in north america, do you think that our governemtn would not tax them at all? because since our ressources are being used, then our government wants our country to benefit fomr it. if they didnt have to pay anything, then it would be a loss to our countries economy...no? so i guess if north american companies open up factories in those poor countires, pay thier workers 2 dollars a day, no tax, no kind of compensation, no kind of credit...it isnt benefitting their economy one bit.
anyways im not even an expert on this issue, maybe u should pick up a book or somethin and read up on it

Are you on crack?? I don't think companies can steal a countries resources, I don't even know how you can steal human resources. You might say that some companies are exploiting a countries resources, but stealing--that's crazy. As for countries that remain poor you can blame the governement. Africa is poor due to those asshole politicians who enrich themselves and forget about the people. When a factory opens up in a poor country, that factory provides jobs, be it low paid jobs, but you have to look at the cost of living in poor countries. You don't have to be a genius to figure out that the cost of living is low.

[Cunard]

sept 11, a couple wars, and george bush at the helm of america havnt caused a recession yet....i dont think much will at this time....perhaps a slow down in the world economy (which is needed)...but nothing drastic

[ladoo20]

Are you on crack?? I don't think companies can steal a countries resources, I don't even know how you can steal human resources. You might say that some companies are exploiting a countries resources, but stealing--that's crazy. As for countries that remain poor you can blame the governement. Africa is poor due to those asshole politicians who enrich themselves and forget about the people. When a factory opens up in a poor country, that factory provides jobs, be it low paid jobs, but you have to look at the cost of living in poor countries. You don't have to be a genius to figure out that the cost of living is low.


i dont think you are getting my point. for example...i know that in poor areas of pakistan, leather is a really big natural ressource. and many companies set up factories there, making socer balls and other things that require leather. now these companies are using the natural ressource of pakistan...are they not? and the compensation given to those ppl is nothing. and it is partly the governments fault because they dont have policies against it. so if you lok at it they really are taking that countires ressource...now maybe in pakistan there might me more laws to protect them, but in countires like africa...there are no laws to protect their natural ressources. basically anyone can go and start using their natural ressources. do you think some foreign company could set up in north america and start using our natural ressources without having to pay anything, yes the cost would be extremely high.

the cost of living is low as a result of factors such as poor government, exploitation, etc. the cost of living is not low for nothing. that wouldnt make sense.

economics is hard to understand. and the answer is never straight forward. there are always alot of factors invovled.

and a side note u dont need to be rude to get ur point accross.

[bender]

i dont think you are getting my point. for example...i know that in poor areas of pakistan, leather is a really big natural ressource. and many companies set up factories there, making socer balls and other things that require leather. now these companies are using the natural ressource of pakistan...are they not? and the compensation given to those ppl is nothing. and it is partly the governments fault because they dont have policies against it. so if you lok at it they really are taking that countires ressource...now maybe in pakistan there might me more laws to protect them, but in countires like africa...there are no laws to protect their natural ressources. basically anyone can go and start using their natural ressources. do you think some foreign company could set up in north america and start using our natural ressources without having to pay anything, yes the cost would be extremely high.

the cost of living is low as a result of factors such as poor government, exploitation, etc. the cost of living is not low for nothing. that wouldnt make sense.

economics is hard to understand. and the answer is never straight forward. there are always alot of factors invovled.

and a side note u dont need to be rude to get ur point accross.


No one is forcing Pakistanis to work for low wages. If people are taking the job that means that their wages are good enough for them to live on for the time being. As for the compensation, I'm not expecting a company that sets up shop in a poor country to pay their workers extremly high. The supply of labor in poor countries is very high so wages will go down. The only problem I have is with companies who exploit their workers making them work over time without being compensated and treating them badly. If a country is poor blame the government.

[FlyDesiGrl]

yeah with a bit of luck. We need a reccession in the UK to calm down house prices. I'd love to get a place of my own but its so unbelievably expensive, I'm praying for a housing market crash.
the houses there are ridiciculously expensive. my goodness. when i was there in July this year, i couldnt believe the prices. my cousins are house hunting in the london area, they currently live in the southall area, but want to move to a better area. and any house theyve seen so far, isnt even that big, but its a detatched, and its hellllla expensive, and it needs a lot of work done to it. the ones that are a decent size, have prices through the roof too..its a bloody nose bleed. unbelievable.

[reaz]

i think there may be some misunderstanding. most large companies that outsource, they are stealing that countires resources...human resources, natural resources, and that country is not being compensated for it. if it truly was a benefit for those coutires...why are they still the poorest when the majority of companies have so many factories there?
because those people are under-paid. now i dont know if 2 dollars a day is enough for them to get proper medical attention, and proper food, and a proper shelter....because even with so many factories there with so many jobs....their GDP per capita is still amongst the lowest. i dont know where ur getting ur information on how it is prosperous for those countries. you can pick up any book on this issue and you will see what the reality really is.
when i say they are stealing that countries resources...it means that their human ressource are being taken advantage of without proper compensation, thier natural ressources are being used without them getting any credit. if a foreign company opened up in north america, do you think that our governemtn would not tax them at all? because since our ressources are being used, then our government wants our country to benefit fomr it. if they didnt have to pay anything, then it would be a loss to our countries economy...no? so i guess if north american companies open up factories in those poor countires, pay thier workers 2 dollars a day, no tax, no kind of compensation, no kind of credit...it isnt benefitting their economy one bit.
anyways im not even an expert on this issue, maybe u should pick up a book or somethin and read up on it


A country has utmost authority on its land and resources. If a company sets up anything in a foreign country it first of all requires permission. I'd think if a country is stupid enough to let a company exploit its resources (natural or human) and not compensate it via a system of taxation and/or a lump sum, that country is stupid. I am aware this is never the case. So such a country does not exist.

Those countries are poor but they are also developing much faster than the rest of the world. Take a look at the economic growth of the countries like Bangladesh, India, Pakistan or Sri Lanka. Their middle class has been expanding. This is a sign of economic growth. Once again these facts are public

There are equal number of books arguing both sides of the argument. It's just that the arguments from your end seem to be very silly. And it's not just you personally it's the people who believe that the people are being underpaid. Imagine this scenario. If you were underpaid, would you accept a job? or find something better? Cmon, this is too simple. Nobody wants to work a low paying job unless they know it's the best they can do.

A lot of the people working at these factories for low wages were interviewed. No one complained of being underpaid. A lot did accept that the income was low but they also added that they weren't getting jobs elsewhere which is why even their kids work at those textile factories so that they can attend school and make something out of themselves.

The companies are taxed. Show me some proof of them not being taxed or of companies not compensating for the use of land. Let me sum up my points.

1. Governments are not stupid. In return for use of their land a nation is bound to tax the company. Why on earth would any government give away land for free? The US is not an empire.

2. People are not stupid. Why would they work for a very low wage if other oppurtunities with better wage exist out there? Nobody's holding these people by their collars forcing them to work for these companies.

3. Please recommend some books and I'll recommend some for you that show the opposite.

[reaz]

sept 11, a couple wars, and george bush at the helm of america havnt caused a recession yet....i dont think much will at this time....perhaps a slow down in the world economy (which is needed)...but nothing drastic

huh? 2002 is officially a recession. I've been hearing this from everyone including my professors. why is it so hard to believe?

now if you choose to ignore bush's influence on the recession and blame it on clinton then we have to wait for bush to leave before we see bush's effect on the economy. in any case the economy is not doing too well compared to 2003-2004.

[SKYHIGH]

Hi guys,
It is worthwhile to take part in this discussion. My point is simple. In any given economy there is dominant factor of production and there is minor factor of production. Dominant factor of production prevails and squeezed much out of minor factor of production (for example labor or land). But, there is a limit, minor factor of production first equate and then start pushing dominant one underneath. This seesaw makes possible to fix the price for both of them. It is all about supply and demand. If supply is more then demand then prices are low therefore, in underdeveloped countries labor is in abundance therefore capital prevails and its margin yield is high, on the other hand labor marginal yield is low.
Once power of negotiation of labor increases the marginal income of labor will definitely go up. Factor of productions have nothing to do with social problems, this is work of government. Will carry on.
BYE,
SH

[ladoo20]

A country has utmost authority on its land and resources. If a company sets up anything in a foreign country it first of all requires permission. I'd think if a country is stupid enough to let a company exploit its resources (natural or human) and not compensate it via a system of taxation and/or a lump sum, that country is stupid. I am aware this is never the case. So such a country does not exist.

Those countries are poor but they are also developing much faster than the rest of the world. Take a look at the economic growth of the countries like Bangladesh, India, Pakistan or Sri Lanka. Their middle class has been expanding. This is a sign of economic growth. Once again these facts are public

There are equal number of books arguing both sides of the argument. It's just that the arguments from your end seem to be very silly. And it's not just you personally it's the people who believe that the people are being underpaid. Imagine this scenario. If you were underpaid, would you accept a job? or find something better? Cmon, this is too simple. Nobody wants to work a low paying job unless they know it's the best they can do.

A lot of the people working at these factories for low wages were interviewed. No one complained of being underpaid. A lot did accept that the income was low but they also added that they weren't getting jobs elsewhere which is why even their kids work at those textile factories so that they can attend school and make something out of themselves.

The companies are taxed. Show me some proof of them not being taxed or of companies not compensating for the use of land. Let me sum up my points.

1. Governments are not stupid. In return for use of their land a nation is bound to tax the company. Why on earth would any government give away land for free? The US is not an empire.

2. People are not stupid. Why would they work for a very low wage if other oppurtunities with better wage exist out there? Nobody's holding these people by their collars forcing them to work for these companies.

3. Please recommend some books and I'll recommend some for you that show the opposite.

Like i said for them not taking the job is not an option it is all they have to survive. let me give you an example...lol pakistan is not like north america. its either feed ur family for 50 cents a day or get lost. they dont have billions of jobs lined up. this is just pakistan, but the situation in poorer countires is worse.
Sialkot where i was born is one of the worlds most important producers of sporting goods. nike has set up many factories there. child labor is common. the majority of thier workers are young children. and the conditions theywork under a horrible. now countires like pakistan...do you think that the government is not awar that a foreign company is comming in their land, practicing child labor. i think they are well aware. but the compensation they get from nike is far too good for them to care. thats what i meant by their natural ressources, and human ressources are being exploited, because that money is not being given back to them. there is no flow of money, hence the low standard of economy.
so i do agree the government has a big hand in it, but i think these companies also have a hand in why their economy isnt doing well. because they are taking advatange for one purpose because they know they can get away with it. thier purpose is to set up factories ina place where there is a lack of authoritarian government, human rights, and poor living conditions.
and because of the lack of flow of money, the rich are getting richer, and the poor are getting poorer.

[King786]

I think the American Stock Markets will surge back up a bunch if the next president is a democrat.

[reaz]

Like i said for them not taking the job is not an option it is all they have to survive. let me give you an example...lol pakistan is not like north america. its either feed ur family for 50 cents a day or get lost. they dont have billions of jobs lined up. this is just pakistan, but the situation in poorer countires is worse.
Sialkot where i was born is one of the worlds most important producers of sporting goods. nike has set up many factories there. child labor is common. the majority of thier workers are young children. and the conditions theywork under a horrible. now countires like pakistan...do you think that the government is not awar that a foreign company is comming in their land, practicing child labor. i think they are well aware. but the compensation they get from nike is far too good for them to care. thats what i meant by their natural ressources, and human ressources are being exploited, because that money is not being given back to them. there is no flow of money, hence the low standard of economy.
so i do agree the government has a big hand in it, but i think these companies also have a hand in why their economy isnt doing well. because they are taking advatange for one purpose because they know they can get away with it. thier purpose is to set up factories ina place where there is a lack of authoritarian government, human rights, and poor living conditions.
and because of the lack of flow of money, the rich are getting richer, and the poor are getting poorer.

what would you rather have? a source of income or starvation? i am not saying there are jobs lined up for these folks. perhaps that's why they work at those places. but if nobody else is willing to pay them more then it's not the company's problem is it?

authoritarian government and human rights dont go hand in hand. the government may be corrupt in which case the land resources, etc may be exploited but they are not holding the employees in chains. the employees have a choice of not working or quitting.