What will the economy look like in 6 months time?

ittakestwo

SEPT 23 1989 wrote: »

They can't do austerity again after this

The people did nothing wrong from the top of society to the bottom

the future government knows it and the EU knows it

Try and throw it back on the people and see what happens

Austerity is not a choice.

Wanderer78

ittakestwo wrote:

Austerity is not a choice.

What a load of ****e, it's 'benefits' are ideologically based, not factually based

Kermit.de.frog

Wanderer78 wrote: »

I have faith that we ll pull it together in the end, but as you said, the more conservative elements of the EU will dig their heels in (idiots), but I suspect, if things turn really ugly economically, and the EU starts to seriously fracture, these conservative elements will bite their lips, and accept the changes, or face possible collapse. Its gonna be fascinating to watch, although scary

Germany will gladly see it collapse if the alternative is supporting financially delinquent members.

That is just not going to happen.

Spain and Italy need to consider their place in the Eurozone instead of attempting strokes or get their own houses in order.

There will never be Eurobonds nor should there ever be.

Kermit.de.frog

Wanderer78 wrote: »

What a load of ****e, it's 'benefits' are ideologically based, not factually based

They are numerically based.

Don't live beyond your means.

Simple.

Wanderer78

Kermit.de.frog wrote:

Germany will gladly see it collapse if the alternative is supporting financially delinquent members.

If it goes, we all go with it, including germany, I suspect they ll realise this in the end. We re all effectively delinquent in the euro zone, it was a fundamentally flawed system from the word go, particularly the euro. Not having a functioning surpluse recycling mechanism in place is causing serious fractures within the union, we all need each other equally, or it all goes, causing catastrophic damage to all economies, including germany.

Kermit.de.frog wrote:

There will never be Eurobonds nor should there ever be.

We probably have no choice now to have so, or this might go

Kermit.de.frog

Why don't we have a choice?

If it collapses so be it but we should never pay for the recklessness of other countries.

Germany sure as hell won't as they have said.

Spain and Italy were told to get their house in order after 2010. They didn't.

So be it.

Xertz

See what I mean. The reaction will probably be cold inward looking financial accounting and refusal to use the fiscal and central bank tools and we will drift into an unprecedented recession that will slide into a full depression. They won’t care as they don’t have solidarity towards each other. A few do, but most seem to just be fair weather friends these days.

I honestly think this could just be a sink into really bad standards of living and the end of the run of prosperity we saw after WWII. There’s abysmal leadership in the west at the moment and a society that has drifted into naval gazing conspiracy theories and all sorts of stuff.

We might have been better equipped to cope with this back in the 90s, but I just don’t feel the solidarity anymore - just a lot of punching down and pulling ladders up.

We could even be sowing the seeds for global conflict if things start to get nasty. Like what happens if Europe sinks into hole and let’s say Russia invaded a somewhere and nobody cares enough to respond? EU perhaps being unable to respond diplomatically and NATO being hamstrung by Trump. Or, various states start falling out of the EU? Maybe the US far right go nuts and say you get an armed response to the lockdowns followed by wave after wave of Coronavirus issues?

That seems to be the kind of crazy future we are headed for.

As for Germany and so on, good luck with trying to run based on a small domestic market and a sinking EU around you. It won’t work for very long if demand for products dies off and the global economy isn’t exactly doing wonderfully either.

Wanderer78

Kermit.de.frog wrote:

Don't live beyond your means.

This is all neoliberal/neoclassical bull****, governments are not like households, central banks can and do create money, households cannot, this anology doesn't work at the macro level. we have no choice but to unhinge these abilities of critical institutions such as the ecb, eib etc etc, in order to save the EU, and possibly/probably the global economy

Wanderer78

Kermit.de.frog wrote:

If it collapses so be it but we should never pay for the recklessness of other countries.

If it collapses, it would probably collapse the global economy, and then there's the issue of all the euro denominated debts, these just don't disappear!

Xertz

Xertz wrote: »

See what I mean. The reaction will probably be cold inward looking financial accounting and refusal to use the fiscal and central bank tools and we will drift into an unprecedented recession that will slide into a full depression. They won’t care as they don’t have solidarity towards each other. A few do, but most seem to just be fair weather friends these days.

I honestly think this could just be a sink into really bad standards of living and the end of the run of prosperity we saw after WWII. There’s abysmal leadership in the west at the moment and a society that has drifted into naval gazing conspiracy theories and all sorts of stuff.

We might have been better equipped to cope with this back in the 90s, but I just don’t feel the solidarity anymore - just a lot of punching down and pulling ladders up.

We could even be sowing the seeds for global conflict if things start to get nasty. Like what happens if Europe sinks into hole and let’s say Russia invaded a somewhere and nobody cares enough to respond? That seems to be the kind of crazy future we are headed for.

As for Germany and so on, good luck with trying to run based on a small domestic market and a sinking EU around you. It won’t work for very long if demand for products dies off and the global economy isn’t exactly doing wonderfully either.

Mate, you need to somehow get yourself away from this for a while. When it was bothering me a lot a few weeks ago, I had to force myself away from it at all and it helped a lot.

Mocha Joe

In a global recession and depression, where does all the money go? How can the entire world suffer financially at the same time?

BillyBiggs

Mocha Joe wrote: »

In a global recession and depression, where does all the money go? How can the entire world suffer financially at the same time?

If lots of businesses fold in most countries, there can only be financial suffering the world over, at least for a few years. Ask yourself how many bars, restaurants and small companies will re-emerge after the lockdowns?

This thing with the oil futures in America is pretty amusing in a way. I remember way back either in university or work learning about a fund manager who messed up and had to take delivery of a load of copper or something and it wrecked him having to work out how to do it and store it.

That's what is happening in America. Fund managers are now on the hook to buy oil in Oklahoma and will be probably be sued out of existance if they don't. Instead of selling these contracts like usual, they're paying people to take them off them because they're fund managers, not oil refineries. That's why the price of that oil went to -$40 or whatever.

Commodity futures yet again ruining hedge funds.

Mocha Joe

BillyBiggs wrote: »

If lots of businesses fold in most countries, there can only be financial suffering the world over, at least for a few years. Ask yourself how many bars, restaurants and small companies will re-emerge after the lockdowns?

So people that go to pubs and restaurants have a lot less money, the people who work in and own them have a lot less money, the government has a lot less money. Who has more money? There's still the same amount of money in the world.

Xertz

Can’t really just switch off and get away from it because I’m expected to be able to comment on it for work and so on, so I’m supposed to keep abreast of it but it’s starting to really stress me the point that I can’t sleep anymore and just have stomach pains, heart palpitations and so on. Tends to be what I get if I’m under intense stress. I have had to change jobs due to the very high BP and heart stuff when I’m under long term stress. So I’m aware I need to be careful, just not sure how.

I’m just not really very good at compartmentalising things and distancing myself, but when it is also what I’m living through it’s beginning to become impossible.

Work is also beginning to dry up. I should be ok financially but also just trying to keep two cocooning people remotely and locally supported - one’s elderly and immune compromised and the other has lung problems. Also just a lot of other random stuff that I can’t really go into but sorry if I was being a bit melodramatic up the thread. I’m just not in my usual cheery mood.

Kermit.de.frog

Wanderer78 wrote: »

If it collapses, it would probably collapse the global economy, and then there's the issue of all the euro denominated debts, these just don't disappear!

I really don't see anything happening unless Italy and Spain are in IMF bailout programs. This will attach strict conditions to assistance.

Wanderer78

Kermit.de.frog wrote: »

I really don't see anything happening unless Italy and Spain are in IMF bailout programs. This will attach strict conditions to assistance.

and this is where things will become fascinating, i am expecting the imf to become involved here somewhere, with their sdr's, the only problem is, if these conditions are too strict, economies could very well collapse, potentially setting off contagion, interesting times ahead. im expecting another banking crisis on the horizon if recovery is very slow, our banking systems seriously dont like none performing loans

Xertz

Why should the IMF bail out the very wealthy Eurozone’s members though? There was a lot of anger about the EU washing its hands of a financial problem and dumping it on the IMF last time. The IMF is also going to be up to its neck trying to solve all sorts of fiscal meltdowns in the coming months too.

Can you imagine if the US did that with states? The Eurozone is a currency union with a central bank and the EU claims to be all sorts of things then walks away from its members when they’re in crisis. That’s where the EU will end up destroying itself it it’s not careful. It’s not the Brexiteers who are doing that. It’s self inflicted.

It’s increasingly coming across as a group to fair weather friends, who pontificate about solidarity and support when it suits them and will throw you under the bus when it doesn’t.

Wanderer78

Mocha Joe wrote: »

In a global recession and depression, where does all the money go? How can the entire world suffer financially at the same time?

i think its more to do with the velocity of money more than the amount, velocity has almost collapsed, as id imagine the largest amount of new money, i.e. credit, has dropped dramatically, as individuals and businesses have virtually stopped taken out loans.

enricoh

As someone said earlier Italy and Spain were told to get their act together with their debt levels for the last 10 years.
They didn't bother as their was no votes to be got for being responsible.
Now they want those who are fiscally responsible to bail them out, and still want no reforms.
Thanks but no thanks Pedro!

ittakestwo

Wanderer78 wrote: »

This is all neoliberal/neoclassical bull****, governments are not like households, central banks can and do create money, households cannot, this anology doesn't work at the macro level. we have no choice but to unhinge these abilities of critical institutions such as the ecb, eib etc etc, in order to save the EU, and possibly/probably the global economy

The amount of "stuff" produced in ireland and the rest of the world throughout 2020 will be less than 2019. CB's printing money wont change that fact. We have got poorer as a nation.... austerity will be the messenger of that fact... it's not a choice.

Wanderer78

ittakestwo wrote: »

The amount of "stuff" produced in ireland and the rest of the world throughout 2020 will be less than 2019. CB's printing money wont change that fact. We have got poorer as a nation.... austerity will be the messenger of that fact... it's not a choice.

our money supply is shrinking due to less demand for credit, credit being the largest part of the money supply. cb money is needed to stimulate our economies, the best way to invest this money would be via infrastructure spending, as demand in the private sector will more than likely remain low. austerity does not grow economies, its furthers the reduction of it, its implementation is ideologically based, not factually

Onesea

I feel it is time to get back to normal.When you look at the stats there seems to be only old and sick people dying and most are in homes never transferred to hospital.Vast majority of all other stats shows people have the ability to beat this virus.

A world of healthy people on house arrest wont work for much longer.

The press have all the lights and bells on full blast but in reality we are making this much worse than it is.

The problems of the future are starting to far outweigh the issues we have right now.

Xertz

It’s a bit like the Matrix. You can be bound up forever in the minutiae of financial accounting, or you can understand that central banks and government, particularly in times of great crisis have access to the controls of the rules of the game.

The scale of the Eurozone means a lot of those tools are deployable without causing major implications for inflation, and if it’s done in coordination with the US, it would effectively be without consequence at all.

I would be concerned that a lot of EU politics seems unable to get its head round the realities of high level markets and central banking. An awful lot of things at those levels are so theoretical that a lot of “magic” can happen and when you’ve a gigantic internal market, and huge scale, your currency value is a lot less impacted by those moves than if you’re a small economy dependent on world trade with all your transactions and borrowings denominated in someone else’s currency.

ittakestwo

Wanderer78 wrote: »

our money supply is shrinking due to less demand for credit, credit being the largest part of the money supply. cb money is needed to stimulate our economies, the best way to invest this money would be via infrastructure spending, as demand in the private sector will more than likely remain low. austerity does not grow economies, its furthers the reduction of it, its implementation is ideologically based, not factually

That's very well but we are still poorer as a nation/globe as we have produced less this year and therefore can buy less than before... governments like every other household or bussines consuming less as there is less being produced is austarity. Printing money wont change the fact there is less stuff to be brought throughout the world.

Under your theory that governments can consume the same amount in a world that has produced less would mean households/bussiness would have to consume even less as they are crowded out by governments.

When people are being locked up throughout the world and producing nothing there will be a real wealth fall for every household bussiness and government... printing money wont change that.

Wanderer78

ittakestwo wrote: »

That's very well but we are still poor as a nation/globe as we have produced less this year and therefore can buy less than before... governments like every other household or bussines consuming less as there is less being produced is austarity. Printing money wont change the fact there is less stuff to be brought throughout the world.

Under your theory that governments can consume the same amount in a world that has produced less would mean households/bussiness would have to consume even less as they are crowded out by governments.

When people are being locked up throughout the world and producing nothing there will be a real wealth fall for every household bussiness and government... printing money wont change that.

printing money is virtually the only game in town now, as we re currently experiencing a gigantic global demand shock, relying wholly on this demand returning is highly dangerous, as its largely based on confidence, which is currently on the floor. people have a tenancy to hoard money during downturns, they ll probably continue to only truly spend money on things they actually need, and save as much as possible, this will probably continue for some time, until confidence returns.

we need to move away from this more conservative thinking of balancing budgets etc, its highly dangerous, particularly in deflationary periods, we need let the abilities of these so called public institutions rip right now, to speed up recovery. increasing public balance sheets is fine, as long as those debts are serviced, this ultimately increases the money supply, and the ability of our economies to grow their way out of this downturn. relying on other sectors, such as the private sector to increase the money supply via credit creation is kinna dump, who the hell would take on debt now???

The_Honeybadger

Irish_peppa wrote: »

Maybe im looking at this too simplistically but I hear a lot of people saying a lot of business and companies simply wont re-open after this crisis.
If you have a small SME and the government will pay you indefinitely 70% of your staff wages. Also you explain to your staff that you cant afford obviously to top it up as no money coming in. I doubt many staff would hold the gun to the employers head and say no way you make up the 30% difference or im outta here! Option A) Take Government work subsidy or Go to jobseekers payment. I know which one I would take!
Why would the company go out of business?
Im sure yes they will owe suppliers and general costs but I would be surprised if suppliers and landlords also dont make allowances here. As everyone is in the same boat. Is it not more like a pause button on the business albeit it a very disruptive one? What would be the reasoning that certain companies wouldnt open after a pause. For instance if you had received a container of product the week before this all kicked off its not like the supplier will not offer some forebearance and work out a structured repayment scheme if you were shut down for 4 months.
Also I would take into account that there will be a reccession / depression but surely the company would open for a few months to see if they could survive. Why would they be allready be accepting defeat?

https://www.gov.ie/en/service/578596-covid-19-wage-subsidy/

Employees salaries are only one cost. Some knowledge based sectors will come out of it relatively unscathed but a lot of sectors have very high fixed costs and in some cases are carrying huge amounts of perishable stock etc. I know of one food based SME in the town where I live that is carrying over €1m in stock that was destined for export. All orders cancelled so they’ve nowhere to send the stock and it’s unlikely that the business interruption insurance will cover it. The stock will spoil so not only are they caught with the cost of the stock but they’ll also have to pay to dispose of it. These companies work on tight margins and might find it difficult to trade their way out of a setback like this.

Engineering and manufacturing sectors will probably see a lot of orders cancelled and all sectors across the board may have issues getting paid for projects and services already delivered.

Or take a simple retail shop like a menswear or ladies fashion who had all their spring stock ready to go just before things shut down, many thousands of euros in many cases. They will have to practically give it away now. These businesses were already struggling to compete with online retailers and this could be the last nail in the coffin for a lot of them.

That’s just a couple of examples. Even a very good business could be wiped out with what has happened

addaword

enricoh wrote: »

As someone said earlier Italy and Spain were told to get their act together with their debt levels for the last 10 years.
They didn't bother as their was no votes to be got for being responsible.
!

While we done better than Spain or Italy I do not think we can give ourselves too big a pat on the back since 2010 either. Our own national debt quadrupled to about 200 billion, did it not?

Wanderer78

addaword wrote: »

While we done better than Spain or Italy I do not think we can give ourselves too big a pat on the back since 2010 either. Our own national debt quadrupled to about 200 billion, did it not?

god, this again! growing national debt isnt necessarily a bad thing, provided its put to good use, but bailing out financial institutions for highly questionable acts, is in itself highly questionable, is it really productive to do so, and has it truly worked? always baring in mind, most debt has been monetized, its a critical component of our money supply. by not allowing the public balance sheet to expand, forces the private balance sheet to, in the form of private debt, can we truly take on any more private debts?

brickster69

Spanish proposal

https://twitter.com/YanniKouts/status/1252193314180411393