A global recession is on the horizon - please read OP for mod warning

Something like 50% of the population are burning through savings to keep on top of day-to-day expenses.....with food & energy price inflation still to peak...

whole thing is being run over a cliff......and the clowns in the dail are just sitting on their hands waiting for their summer holidays,shades of 'let em eat cake' imo

rossie1977

https://www.boards.ie/discussion/comment/119107735#Comment_119107735

Not going to happen. A Chinese invasion of Taiwan would make Russians invasion of Ukraine look like a successful operation. Chinese don't have the naval firepower to even take the western half of the island never mind the whole thing.

Plus Chinas economy is hugely dependent on Taiwan existing in its current state. Taiwan is the most advanced microchip manufacturer on the planet and where China gets most of its microchips from. If Taiwan were taken out the entire Chinese economy would suffer massively.

DaBluBoi

https://www.boards.ie/discussion/comment/119108662#Comment_119108662

CCP members has repeatedly stated that Taiwan is a "breakaway" province that needs to be subjugated and integrated into the mainland. Furthermore, Taiwan forms part of a geopolitical "line" made up of US-backed states which can blockade and starve China easily of supplies and ships:

If China were to invade Taiwan, it would break this line, making a blockade much more difficult and allow for Chinese ships to easily travel to and from China, particularly in military conflicts

Furthermore, the lockdown in Shanghai and potentially Beijing has made a lot of people have negative perceptions against the CCP. I might imagine them invading Taiwan to distract those in Shanghai

Granted, an invasion of Taiwan would require an enormous amount of troops crossing the South China Sea and would use up a massive amount of resources, not to mention the economic sanctions that China would most likely face, judging by the international reactions to the Russian invasion of Ukraine. I merely suggested it may take place, basing on geopolitics alone

Cluedo Monopoly

https://www.boards.ie/discussion/comment/119106838#Comment_119106838

Yep when I started buying grapes for 2 Euros that originated in Chile, I knew something was very wrong with the global supply chain network. Especially when I threw half of them out because they went off so quickly. They must be frozen en route which is incredibly energy inefficient and probably does not improve the nutrition value. I think we need to stop demanding foodstuffs that are not locally grown (e.g. France) or in season.

Relax brah

https://www.boards.ie/discussion/comment/119108456#Comment_119108456

Ireland would not be exempt from a global recession

Geuze

https://www.boards.ie/discussion/comment/119108508#Comment_119108508

Total Household savings are rising every month, as households save each month.

Deposits are growing by 100m per week.

hayse

https://www.boards.ie/discussion/comment/119109370#Comment_119109370

I question that.

Geuze

I will get the data for you, give me 20 mins, but first of all, have of read of Seamus Coffey, on our national balance sheet:

https://economic-incentives.blogspot.com/2022/05/the-continuing-improvement-of-national.html

Geuze

And here is more from Seamus Coffey of UCC on household savings and assets in 2021:

https://economic-incentives.blogspot.com/2022/04/the-household-sector-in-2021.html

Geuze

"For the first three quarters of 2021, the Central Bank data shows a €15 billion rise in the deposits of the household sector. Loan liabilities were essentially unchanged over the period. The latest figures show the household sector to have €180 billion of currency and deposits and €128 billion of loans which is an incredible reversal of the position of just 15 years earlier. But maybe now we need a little more spending."

In 39 weeks Irish households added 15 bn to deposits.

That is 385m per week.

AdamD

Kinda of baffled as to why anyone would welcome a recession. If you don't like the way things are now, you can be absolutely guaranteed a recession will make them worse.

Geuze

https://www.boards.ie/discussion/comment/119109386#Comment_119109386

@hayse, see table 9.1a of the financial accounts data published by the CBI

https://www.centralbank.ie/statistics/data-and-analysis/financial-accounts/data

Household holdings of currency and deposits, AF.2

2019 Q4 = 151bn

2021 Q4 = 181bn

Households added 30 bn in holdings of cash and deposits in 24 months.

Strumms

https://www.boards.ie/discussion/comment/119107218#Comment_119107218

The biggest challenge to our wellbeing is no longer a pandemic or war… it’s mass inward migration, immigration which is on course to really negatively impact this country and limit the success and wellbeing of our citizens…

Yurt2

https://www.boards.ie/discussion/comment/119109492#Comment_119109492

Which households and where in the income distribution are the savings concentrated?

What we have from Coffey is aggregate numbers. The question I have posed is rhetorical, I think we both instinctually know that deposits on the upper end of the income distribution grew rapidly.

The poster posited the experience of those lower on the income distribution (who are disproportionately harder hit by inflation) and the response came back with aggregate data about savings.

Geuze

The most recent data on wealth by decile is here:

https://www.cso.ie/en/csolatestnews/presspages/2022/householdfinanceandconsumptionsurvey2020/

Sierra Oscar

https://www.boards.ie/discussion/comment/119109446#Comment_119109446

Get out of here with your facts! Conjecture, doom and gloom is all that we want here!

HBC08

https://www.boards.ie/discussion/comment/119106838#Comment_119106838

When more immediate real world events occur then as you may have noticed climate change falls down the list.

People (if they are in such a position, like most first world countries) are not going to accept a decline in living standards for more sustainability. The sustainability will have to come up to a level that it doesn't inconvenience people too much or it won't happen.

Yurt2

https://www.boards.ie/discussion/comment/119109586#Comment_119109586

Unless there is some underlying data what we have there is a top-line statistical release from 2020 respondents - the most sui generis economic year in global and Irish history.

What the poster said is undoubtedly true. Lower income households and individuals are burning through what meagre savings they have as inflation bites. Aggregate savings data from 2021 is a blurry picture indeed and is the most sunny-side-up interpretation possible of how 2022 realities are effecting people on median incomes and below.

HerrKapitan

https://youtu.be/o6zJqd2gl2A

I don't know if deliberate or manufactured recession are worse than natural ones but I guess we are going to find out.

I guess we can have a great reset and build back better.

Sierra Oscar

https://www.boards.ie/discussion/comment/119109664#Comment_119109664

The poster has produced actual hard facts showing savings have increased massively over the last decade, that's a reality. They accelerated during the pandemic, naturally enough, and have probably fallen back now. What you're saying is an opinion not backed by any hard facts as of yet and that's worth mentioning.

Yes, people are likely saving less due to inflation - but this conjecture that the collective Irish economy is burning through savings with just a few weeks or months left to survive is absolute tripe.

Yurt2

https://www.boards.ie/discussion/comment/119109697#Comment_119109697

The poster dumped data from 2021 showing aggregate savings increased by x billion in response to a poster noting that lower income deciles were struggling with inflation.

No sh*t aggregate savings increased in 2021, vast swathes of the year saw people locked in their homes. That tells us nothing and was a fairly useless response to a poster speaking to 2022 economic conditions. Especially given that it's accepted fact that upper income deciles increased their wealth and savings disproportionately during this period.

You're the one inserting "months to survive". Put words in someone else's mouth, not mine.

Worse than conjecture is dumping irrelevant aggregate data that tells us little about where this is hitting hardest on the income distribution (which is what he/she was responding to) and expecting people to swallow a sunny side up narrative about live economic conditions for a large amount of the population.

So you can do yourself a favour and leave your smartarsery outside the door.

patnor1011

https://www.boards.ie/discussion/comment/119109370#Comment_119109370

And I would say that cooking books was here since forever. You can create stats to support any and every point of view.

While if may look nice on paper reality is bit more different.

Geuze

Here is savings and wealth data for Q4 of 2021:

Key Points – Q4 2021

Publication date: 12 May 2022

• Household net wealth increased by €38.5bn in Q4 2021, to reach a record high €995bn. It should be noted that this growth may not reflect the underlying experiences of all households, or the distribution of wealth.
• Household housing assets also reached a series high of €630bn in Q4 2021, above its previous peak of €604bn in Q4 2007. 
• Positive revaluations in housing assets represent the dominant driver of increases in net wealth in recent quarters. However, increasing deposits and upward revaluations of other financial assets have also been important sources of growth in net wealth.

Chart 3: Household Savings

View data for chart 3 | xlsx 21 KB

The increase in financial assets of €4.4bn in Q4 2021 is mainly related to investment in currency and deposits of €3.4bn. Additionally, investment in new housing has remained steady at €1.7bn.

Private sector debt as a proportion of GDP marginally increased by 1 percentage point to stand at 198 per cent in Q4 2021 (Chart 4). However, in terms of value, there was a large increase in private sector debt, to stand at €835bn in Q4 2021, driven by an increase in NFC debt by €28bn over the quarter.

Geuze

So in Q4 of 2021 household ownership of currency and deposits grew by 3.4bn.

Divide that by 13 weeks, means 260m per week additions to household savings during 2021 Q4.

Yes, this data is skewed, by age, by household type, etc.

My parents and their friends couldn't go on trips/hols during COVID, so I'm sure their deposits grew strongly.

hayse

https://www.boards.ie/discussion/comment/119109825#Comment_119109825

Were your parents on pup?

Yurt2

https://www.boards.ie/discussion/comment/119109812#Comment_119109812

Why are you responding with data dumps about aggregate savings from 2021? The poster was noting the effects of inflation on median and lower individuals on median and lower earnings in 2022.

You may have noticed (or maybe you haven't) that we've been in the most significant inflationary cycle in 30 years starting from February or so.

What do you imagine has become of this notional savings bonanza for median earners and lower income earners?

markodaly

From what I've read, the data from the US and UK is pretty bad, with many households burning through cash and savings just to survive. However, there are plenty of people who are well off, with no mortgages and plenty of spare cash saving their money. I think there is a huge inter-generational divide here, where the under 50's are the ones trying to keep afloat and the over 50's are the ones saving vast amounts of cash.

Danzy

https://www.boards.ie/discussion/comment/119109467#Comment_119109467

It's kind of baffling the lengths modern Govts go avoid them.

It's also probably highly destructive long term. The equivalent of ignoring a nagging pain that has appeared and not going to the doctor.

Recessions balance out economies and stop flaws and mistaken from compounding.

It's chemo and successful chemo at that.

Geuze

The ownership of assets is skewed by age, and by income, and by family type.

Here is the distribution of net wealth:

With rising assets, and falling liabilities, the household balance sheet is well able to cope with a slowdown in income growth.

Geuze

Here are median values of financial assets in 2020:

Lone parents have really low financial assets.