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when do you think the recession will end
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Why would commodities be safer? A commodities worth is based on demand for it, and if there is high unemployment, this would indicate that there is low demand. Unless suppliers are now replacing workers with androids and continuing to produce goods?0
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Commodities have the fundamentals going for them, the population is increasing we have loads of people in Russia, China, India that are getting better standards of living. If things don't get better commodities will still go up due to inflation, if things do get better commodities will skyrocket because of increasing demand.
Miners can't get loans to open up new mines or to do exploration, farmers have a hard time to get loans to keep their operations growing. Look at the commodities markets, this year has been great for commodities so far.
But what do I know I am not a professional investor, these are just my opinions and the opinion of Jim Rogers.0 -
Commodities have the fundamentals going for them, the population is increasing we have loads of people in Russia, China, India that are getting better standards of living. If things don't get better commodities will still go up due to inflation, if things do get better commodities will skyrocket because of increasing demand.
So, in times of high inflation (or stagflation, as you said), owning commodities is good. Why is owning a good whose price is rising exponentially in a time when people cannot afford them good? I don't see how that is 'fundamentally' sound. Owning these goods in a period of high demand would be great, but we are in a recession.Miners can't get loans to open up new mines or to do exploration, farmers have a hard time to get loans to keep their operations growing. Look at the commodities markets, this year has been great for commodities so far.
Ah, finally some economic logic! These are interesting points, but are we seeing an increase or decrease in global demand for goods? Also, in your last post you said you would invest in these struggling miners. Oil might not be a bad punt, since it has been rising lately, but I would be very wary in reading gains in the markets, at these early stages. All of these rises are based on predictions that the Obama stimulus will be a roaring success. If it fails to meet expectations, you can kiss your piggy bank savings goodbye.But what do I know I am not a professional investor, these are just my opinions and the opinion of Jim Rogers.
I don't know who Jim is, nor do I care. Arguments from authority do not impress me, in the slightest.0 -
If we have inflation, that mean money looses, value, other things equal that means an increase in prices in commodities. During these times with mines shutting down the supply is decreasing. Commodities are very sensitive to supply chocks and any small increase in demand drives prices up alot, any problems with productions in mines causes prices to increase.
I personally do not have the means directly to buy into commodities via my bank so I have to go for stocks. The movement of these stocks is mainly a function of the movement in price of the metals they produce.
We have already seen a drop in demand and I do not think the demand will drop much lower. China seems to be getting rid of their dollar assets and buying up all commodities they can get their hands on.
However I believe prices might fall a bit over summer so I will wait until autumn before I can invest anything. I am just a small guy so I won't be investing more than 10k euro, I never invest more than I can afford to lose.0 -
I just realized I contradicted myself about market timing... I think prices will go down a bit over summer so my decision for now will be to wait until autumn.0
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I just realized I contradicted myself about market timing... I think prices will go down a bit over summer so my decision for now will be to wait until autumn.
I think you are spot on with the commodities punt though.
putting your money in things you can touch and feel makes sense to me.
You can opt for a mixed commodities product if you have spare cash.0 -
There will be stagflation, that is high unemployment AND high inflation. Guess I should put my money where my mouth is and by some commodities based stocks, like miners and oil companies.
Will probably call my bank soon and do that.
I bough CFD on a demo (no money) account and lost £4,000 from £10,000 i was pretty pissed off because there was a prize for who could make the most in a month from £1,000 and i was leading all month until that....
Sure, how is there going to be inflation? Whats going to cause it? I thought that low oil prices and loads of people being laid off would curb inflation? Hasn't there been negative inflation of late?0 -
Maybe you have missed that the price of commodities have gone up alot this year?0
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Would it be wise to invest in some of the bank shares as they are so low, i was told they are starting to rise.
saw somewhere, think eddie hobbs said it that the prices of houses will start to go up, and the rate of interest will start to rise. and it wont be long before we are out of recession.0 -
cormywormy wrote: »Would it be wise to invest in some of the bank shares as they are so low, i was told they are starting to rise.
saw somewhere, think eddie hobbs said it that the prices of houses will start to go up, and the rate of interest will start to rise. and it wont be long before we are out of recession.
if you mean by invest , buy and hold for X number of years then I'd say too early. Wait for house prices to find a bottom.
Wasnt Eddie pimping property a couple of years back, he might be good in dealing with personal finance but I cant say why I would rate him to make macro calls.A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer
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I'm no expert, I'll say that first of all. But there are a few things that I would add to the original discussion on when the Irish Economy will come out of recession. To fill the gaps, so to speak, t I have a degree in Economics, read Economics books and follow current affairs regarding mainly Finance and Economics. The are a few other things that I would add also. India, China, the U.S., Japan, France and Germany have all had a quarter of growth or are in an at least, temporary upswing or are completely out of recession/ have not recently been in a recession.
Ireland is well known to be an very open economy, with more trading links to the U.S. than the average E.U. nation. This means that as the World and U.S. economies grow, Ireland will grow and hopefully more rapidly than the average E.U. nation. Also Ireland is still a reasonably 'smart' economy so although the likes of Dell have moved their European base of Operation to other E.U. countries , there should be a long list of multinational companies that will set up head or subsidiary bases in Ireland, with a regard to cracking the lucrative E.U. market.
Personally I would like Ireland to have less of an 'open' in Economics terms shape of Economy. This is to reduce the painful swings in the less fortune times like now. We are too much a nation of extremes, extreme wealth, extreme poverty, hyper growth, severe crashes, a balance needs to be found. But to answer the question in a sentence, my educated answer is that, the third quarter of 2010 will be Ireland's first quarter of GDP growth, with the economy hopefully officially pulling out of recession by the fourth quarter 2010!0 -
drunkmonkey wrote: »I reckon somewhere between 2020 and 2029 , can't wait for the tiger to come back, I completly missed the boat first time round...
I reckon on it lasting about 5 to 10 years anyway0 -
I reckon that there won't be a noticeable upswing until sometime after late 2014 or so. I have had this view for months but I was at a talk given by David McWilliams last week which reinforced it.
NAMA isn't going to solve our problems because its success is dependent on the thing that got us in trouble in the first place. The property party is over - move on.
I think that anyone with even basic common sense (except the two Brian's perhaps) would see that the way out of this is not by putting all the chips on property and then sit back and wait. We have to do something to attract jobs and investment.
A stimulus package isn't going to do it because we have to regain our competitiveness. Pumping money into the already too expensive economy will not achieve that.
We're going to have to de-value. We have the UK on one side. they have been de-valuing their currency for some time now. On the other side we have the US who have done likewise. We're linked to Germany but whats the point - we only do 7% of our trade with them. We're in denial and we're going to have to face it eventually. We won't be going back to the punt but the Irish Euro will have to de-couple from the rest of the Eurozone sooner or later.
I'd be interested to hear some views on this.0 -
Define "noticeable upswing"? What are you basing this opinion on, exactly? David McWilliams is not an economist, and he is not actively engaged in macro-forecasting, beyond pulling numbers out of his arse, as far as I am aware.I reckon that there won't be a noticeable upswing until sometime after late 2014 or so. I have had this view for months but I was at a talk given by David McWilliams last week which reinforced it.
Its purpose is to put banks in a position to lend. Where that money is lent to, is a separate issue.NAMA isn't going to solve our problems because its success is dependent on the thing that got us in trouble in the first place. The property party is over - move on.
Ahh, buzzwords will get us out of recession.I think that anyone with even basic common sense (except the two Brian's perhaps) would see that the way out of this is not by putting all the chips on property and then sit back and wait. We have to do something to attract jobs and investment.
"The Irish Euro" doesn't exist. About 40% of exports go to the Eurozone; the Euro area extends beyond Ireland and Germany FYI.We're going to have to de-value. We have the UK on one side. they have been de-valuing their currency for some time now. On the other side we have the US who have done likewise. We're linked to Germany but whats the point - we only do 7% of our trade with them. We're in denial and we're going to have to face it eventually. We won't be going back to the punt but the Irish Euro will have to de-couple from the rest of the Eurozone sooner or later.
I'd be interested to hear some views on this.0 -
we have a risk averse culture, it is so hard to see any recovery driven by ireland.0
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In addition to what EM said, I think you (and possibly McWilliams) are confusing the "success" of NAMA (i.e. its ability to recoup the full value of what it pays for "toxic" assets) with the success of the ultimate aim of NAMA, which as EM pointed out, is to clean up our banks balance sheets so that they may lend again.
These are two different issues and it is not clear which it is you mean.0 -
Ok, I'm pretty sure Chipboard says that the recession will last until 2014. I'm not going to look it up again. It irritates me too much just to have read it again to write this response. Chipboard, the ESRI have, today, on RTE six o'clock news agreed with me that the Irish Economy will, barring a disaster, pull out of recession in the second half of 2010, with a overall decline in GDP per capita due to the problems relating to the first half of the year. David McWilliams is looking to sell himself by being controversial. If you want to hear the views of a real Economist, read Dr Alan Ahearne's papers or articles. He knows what he's talking about and Chippy( do you mind me calling you that? I hope so) don't PM me again about this.0
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Ok, I'm pretty sure Chipboard says that the recession will last until 2014. I'm not going to look it up again. It irritates me too much just to have read it again to write this response.
How dare you infer that I'm not entitled to my opinion or to express it here. Whats the point in a discussion forum if you cant state your opinion.Chipboard, the ESRI have, today, on RTE six o'clock news agreed with me that the Irish Economy will, barring a disaster, pull out of recession in the second half of 2010
You think the ESRI knows what their talking about? Are you serious? How did we get to where we are if we had such a dependable navigator.David McWilliams is looking to sell himself by being controversial. If you want to hear the views of a real Economist, read Dr Alan Ahearne's papers or articles.
You may be correct. I don't doubt that he does this regularly and I have the height of respect for Alan Aherne. It doesn't mean that he can't be correct.Chippy( do you mind me calling you that? I hope so) don't PM me again about this.
Firstly, that comment that you hope I mind you shortening my nickname is extremely immature.
Secondly, I DIDN'T PM YOU ON ANYTHING. I wasn't even responding directly to your post - I was simply stating my opinion in response to the title of the thread and I invited others to give me their views on what I said. Why is that you couldn't be civilised and just say what you think without being abusive. I have read your post just now and I see that mine disagreed with it. Is it a crime to disagree with you.
If you maintain I did PM you, then post the PM up for all to see, and if I didn't - apologise now.0 -
Économiste Monétaire,
Thanks for your civilised response. Take note Eoing008, this is how a discussion forum works.Économiste Monétaire wrote: »Define "noticeable upswing"? What are you basing this opinion on, exactly? David McWilliams is not an economist, and he is not actively engaged in macro-forecasting, beyond pulling numbers out of his arse, as far as I am aware.
You could express it a number of ways I suppose but what I mean is that I think it will take this long before the majority of people feel that the recessioin is over. We have various people saying it is over in the last few days but I think its fair to say that people haven't felt it yet.
I don't have a formula to work this out, its simply my opinion. I think that competitiveness is the key to ending this and I don't see it happening quickly enough for the benefit to feed through to the economy within the next 12 months. Besides, do we really think a recession will last for just 2 - 3 years.Économiste Monétaire wrote: »Ahh, buzzwords will get us out of recession.
LOL. If I wanted to come with buzzwords, I hope I could do better than that. I didn't think they were that buzzy.Économiste Monétaire wrote: »"The Irish Euro" doesn't exist. About 40% of exports go to the Eurozone; the Euro area extends beyond Ireland and Germany FYI.
All we can do is wait and see. Nobody knows that we won't de-couple from the Euro. If you can introduce a common currency, you can reverse it, even temporarily.
I called this correctly on the way down but I don't claim to have a crystal bowl. I could be wrong.0 -
Nobody knows that we will not "de-couple" from the Euro. This isn't even an argument, I'm afraid. You are claiming victory by stating that no one can predict the future.
However, we can look at what effect such decisions can have for smaller economies, and we can acknowledge the fact that our current governor of the Central Bank was right in the thick of things when all these currency crises occurred for these countries. This, combined with Ireland's other variables can help us predict the most likely scenario.
Firstly, the problem of Ireland's foreign debt (both pubic and private) would still remain, however, having a new currency does not mean that all of these debts are now Punt-denominated. Any loans that we obtained in Euro, will have to be paid back in Euro, meaning that any devaluation for the Punt vs the Euro is an effective percentage increase on the debt we already owe. This would take our already struggling businesses and finally deliver the death blow, our banks would become even more insolvent than they currently stand, needing further capitalisation injections from the state or simply left to collapse.
By leaving the Euro and signalling to the market that we are devaluing the Punt will also lead to capital flight, which will further devalue the Punt, which will lead to capital flight, and so on. With the Punt in freefall the following scenario becomes very likely:In order to keep the value of the punt from declining, the Central Bank of Ireland had to do the opposite of what it would have done when capital starting coming in: it went into the market to exchange dollars and Euro for Punts, supporting its own currency.
But there is an important difference between trying to keep your currency down and trying to keep it up: the Central Bank of Ireland can increase the supply of Punts as much as it likes, because it can simply print them; but it cannot print Euro. So there was a limit on its ability to keep the Punt up. Sooner or later it would run out of reserves.
The only way to sustain the value of the currency would have been to reduce the number of Punt in circulation, driving up interest rates and thus making it attractive once again to borrow dollars to reinvest in Punt. But this posed problems of a different sort. As the investment boom sputtered out, the Irish economy had slowed—there was less construction activity, which meant fewer jobs, which meant lower income, which meant layoffs in the rest of the economy. The economy was no longer living in the style to which it had become accustomed. To raise interest rates would be to discourage investment further, and perhaps push the economy into an unambiguous slump.
All of this was according to the standard script: it was the classic lead-in to a currency crisis, of the kind that economists love to model—and speculators love to provoke.
As long as the Punt-Euro exchange rate seemed likely to remain stable, the fact that interest rates in Ireland were several points higher than in the Eurozone provided an incentive to borrow in Euro and lend in Punt. But once it became a high probability that the Punt would soon be devalued, the incentive was to go the other way—to borrow in Punt, expecting that the Euro value of these debts would soon be reduced, and acquire Euro, expecting that the Punt value of these assets would soon increase. Local businessmen borrowed in Punt and paid off their Euro loans; wealthy Irish sold their holdings of government debt and bought ECB bonds; and last but not least, some large international hedge funds began borrowing Punt and converting the proceeds into dollars/Euro.
All of these actions involved selling Punt and buying other currencies, which meant that they required the central bank to buy even more Punts to keep the currency from falling, which depleted its reserves of foreign exchange even faster—which further reinforced the conviction that the Punt was going to be devalued sooner rather than later. A classic currency crisis was in full swing.
Like many governments before and no doubt many to come, Ireland's waited as its reserves ran down. On that day, the Irish had to let the Punt go...most people thought that the devaluation of the Punt would pretty much end the story...And so there would not be a devastating recession. They were wrong.
Not only does this scenario follow Macroeconomic theory, but it is derived from an actual currency crisis, namely the Thai crisis of July, 1997. What you read above was an extract from Paul Krugman's "The Return of Depression Economics" with some adjustments made to make it read like an Irish crisis.
This is the very likely cost of leaving the Euro, at this moment in time. Any feasible gains in competitiveness would be more than wiped out by the losses and insolvency damage caused by a devaluation, especially for a country which has the 4th highest private debt in the world.
McWilliams is educated enough to be aware of all of this, and yet he still pretends that exiting the Euro immediately and devaluing would be the best thing for us. What little respect I ever had for the guy is sharply plummeting because of this, and because of the army of his loyal, blind followers that I must continually give economics lessons to, when I really should be charging for it.0 -
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I am not an economist and my estimates are one of a layman. But so far I have done quite well in my guesstimates. I am a fan of the spread betting. My guess is that we are going to be lucky to avoid a small pullback next year as I think the world has come out of this recession a little quickly. I would guess somewhere in the middle of 2011 we should continue to have small stable growth until some point in time we all go nuts again and say that what happened in the past has no relevance on now wherein the same thing will happen to a some degree again. The human race is fatalist.:)0
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There will come seven years of great plenty throughout all
the land of Egypt, but after them there will arise seven years
of famine, and all the plenty will be forgotten in the land of
Egypt; the famine will consume the land, and the plenty will
be unknown in the land by reason of that famine which will
follow, for it will be very grievous.
(Genesis 41, 29:31)
I'm not not a religious fanatic but this seven year cycle thing is interesting. Taking that we were really in trouble in 2007 and did not really know it, perhaps 2014 might be a good year.0 -
Superstitious rubbish, wholly reliant on the veracity of the collected mumblings of ignorant bronze-age goat herders. I take it that this "theory" applies to Western countries only? What of Ireland's economic experience since becoming a free nation?0
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For the average guy on the street the recession won't be over till the unemployment rate falls significantly and wages start to rise again which unfortunately is not likely in the foreseeable fututre. For business not till consumption picks up which is reliant on the what I said above.
One thing I noticed is that there is a lot of talk from businesses about cutting costs to restore competitiveness. As far as I can see it wasn't our lack of competitiveness that caused the recession (admittedly we have fallen significantly), it was the property bubble coupled with the credit crunch. If we return to pre-celtic tiger competitveness through wage cuts we return to a pre-celtic tiger standard of living. In fact our trade has actually held up pretty well especially in comparison to other european countries so I really don't see the case. Having said that it sure wouldn't hurt to increase competitiveness but I think it would be more beneficial to focus on cutting costs other than wages.
Also I would be worried that all the large mortgages taken out coupled with high unemployment, lower wages and a interest rate rise next year will increase the burden of repayments and defaults. Bad news for the banks and lending.0 -
I'm not sure exactly where I should start with this. Admittedly Chipboard, you did not PM me. I had completely forgot about my forum thread until Boards e-mailed me Chipboards response. I mistakenly thought that was a PM until I had literally sent a reply to the post. As far as economic recovery and growth is concerned, I have not changed my opinion, one iota. Quite frankly to say that 4 years from now we will be in economic growth is ridiculous, inaccurate and scare mongering. Four years from now another recession may have already started.
As far as saying the average man in the street... This argument is pointless. We are a society of extremes, financially speaking if not in every respect, second only to the U.S. in recent national surveys. What is the average man in the street? Would he be middle class? That doesn't exist in Ireland! It died about the same time as the Celtic Tiger began. As for the argument of when recovery will affect Ireland, Yes housing and employment are lagged in their responses to recovery. The stock markets are one of the first positive respondents and they are on a weak recovery as we speak.
So will Ireland achieve "two consecutive quarters of economic growth", the indicator of entering a boom according to experts next year, I have not changed my opinion, I think so. The ESRI may not be God almighty nor am I, but they know a hell of lot more than anyone who posts in this forum and I'm willing to guess they won't be the only prestigious organisation predicting recovery for Ireland next year.0 -
wonderful knowledge0
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As far as saying the average man in the street... This argument is pointless. We are a society of extremes, financially speaking if not in every respect, second only to the U.S. in recent national surveys. What is the average man in the street? Would he be middle class? That doesn't exist in Ireland! It died about the same time as the Celtic Tiger began. As for the argument of when recovery will affect Ireland, Yes housing and employment are lagged in their responses to recovery. The stock markets are one of the first positive respondents and they are on a weak recovery as we speak.
So will Ireland achieve "two consecutive quarters of economic growth", the indicator of entering a boom according to experts next year, I have not changed my opinion, I think so. The ESRI may not be God almighty nor am I, but they know a hell of lot more than anyone who posts in this forum and I'm willing to guess they won't be the only prestigious organisation predicting recovery for Ireland next year.
I completely agree with you on the ESRI forecasts, there just seems to be a lot of uncertainty about the labour market i.e. could some of the unemployment be structural? The latest ESRI bulletin shows unemployment growing to 13.5% next year.
My point was that even if we do have positive growth, until the unemployment level starts falling back down to 5-6% and wages start to grow few people will notice or care. Most of the population is feeling the recession whether they are stuck in a job they don't like, suffering a pay cut or just can't find a job. Maybe they are a business that has to make cuts because they don't have the same sales as they used to or they can't borrow to grow the business. Even if its not happening to you the general climate of pessimism is there even if things aren't really that bad. There is probably even a substancial amount of people who are benefiting from the recession but until unemployment falls and consumption rises I don't think we could call it a boom even if technically we've exited recession.0 -
One thing that I feel needs to be clarified is private and public wealth vs GNP/GDP per capita. I have done no research on this issue. But I suspect that Ireland's GDP per capita is relatively high in the world or at least was at the height of the Celtic Tiger era but it's 'wealth' is now and even then was relatively low compared to nations like the U.S., UK, France and Japan.even if we do have positive growth, until the unemployment level starts falling back down to 5-6% and wages start to grow few people will notice or care/QUOTE]
The Irish government seems to be focusing on a 'smart' future for Ireland. This seems relatively wise. Bill Gates, no expert on economics but a brilliant business man nevertheless, recently suggested Energy, I.T. and Green companies as the future explosive industries and the Irish Government seem to approaching the same ideas as him. GDP growth means indirectly and among other things, increased profits for companies and thus increases in wages, the unemployment rate doesn't need to 5 percent for GDP to grow too. Personally I think Ireland is going to lose a lot more jobs to Eastern Europe as the Eurozone gets bigger and so it may be a very long time till unemployment reaches 5 %.but until unemployment falls and consumption rises I don't think we could call it a boom even if technically we've exited recession./QUOTE]
As regards Consumption, it should rise as consumers see the global economy getting back on it's feet as it's doing and is somewhat self- fulfilling in growth years in term of how it increases.
There are two things I'm really not sure about they're how this so-called smart economy is going to be created and how Nama is going to make money quick out of toxic debts. If you know please do tell!:D0 -
Flamed Diving wrote: »Superstitious rubbish, wholly reliant on the veracity of the collected mumblings of ignorant bronze-age goat herders. I take it that this "theory" applies to Western countries only? What of Ireland's economic experience since becoming a free nation?
LOL ...Are you talking about the central bank experts....?
http://www.centralbank.ie/data/TechPaperFiles/4RT00.pdf0 -
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LOL ...Are you talking about the central bank experts....?
http://www.centralbank.ie/data/TechPaperFiles/4RT00.pdf
No, I'm talking about the people who wrote that book you quoted from.0
This discussion has been closed.
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