What will the economy look like in 6 months time?

boring accountant · 07-05-2020 4:55pm

Wanderer78 wrote: »

with interest rates at record low levels, some negative, theres effectively no need to raise taxes to pay for the increase in loans being needed, provided these loans are used for productive means, in order to stimulate economic growth, these loans can be rolled over for very long periods of time, and the principle can be paid back as the economy recovers, baring in mind, negative rates means the full principle is not needed to be paid back, just the majority of it.

Low interest rates can’t be guaranteed if there’s lots of countries borrowing at the same time. There will be a cash crunch. ECB bond buying only works if the ECB isn’t the only buyer.

salonfire · 07-05-2020 7:34pm

Wanderer78 wrote: »

with interest rates at record low levels, some negative, theres effectively no need to raise taxes to pay for the increase in loans being needed, provided these loans are used for productive means, in order to stimulate economic growth, these loans can be rolled over for very long periods of time, and the principle can be paid back as the economy recovers, baring in mind, negative rates means the full principle is not needed to be paid back, just the majority of it.

What an absolutely stupid approach to suggest. The Debt needs to be paid down as quickly as possible to a more sustainable level. We are already among the highest indebted nations in the world

Have you not learned anything about this pandemic and how things can go from good to bad in the matter of days?

A more credible debt to income ratio allows us wriggle room to borrow in case of any future shocks.

To suggest we can add today's borrowing to the debt and forget about it shows a real lack of foresight.

joe40 · 07-05-2020 7:50pm

Ok my knowledge of macro economics is very limited, but why would there not be a fairly speedy recovery once virus abates or is under control.
There is very little spending at the moment which means many business are suffering, but the money that people aren't spending still exists.
Surely when things settle people that have income will spend again which will in turn stimulate business and growth and therefore jobs.
Obviously things like aviation will suffer terribly but other industries may rise.
Tourism should benefit from more domestic tourism, no idea if that will come close to mitigate the loss of foreign tourists.
Maybe I just looking for hope, the short to medium term will be terrible.

Wanderer78 · 07-05-2020 7:52pm

salonfire wrote:

To suggest we can add today's borrowing to the debt and forget about it shows a real lack of foresight.

What a load bollocks, this is what happens when the conservatives get in control, only they would come up with things such as 'Expansionary Fiscal Contraction', in a fcuking deflationary period!

Borrow, borrow and borrow, right now, but spend wisely, and I'm not saying you forget about it, you stimulate the economy by borrowing and spending this money wisely, you then grow your way out of a crisis, if you retract your borrowing and stimulation packages too early, good luck to your recovery!

Balf · 07-05-2020 8:06pm

joe40 wrote: »

Maybe I just looking for hope, the short to medium term will be terrible.

The short to medium term will be miserable. There's several negative trajectories.

Bear in mind, action have been driven by medical prescription without any regard for the economic cost. And the doctors seem to have very dim awareness of these things - they seem to think you can tell an economy to take a few months off the way you might tell a patient to ease up "sure, the work will still be there in a few months".

Put at its simplest, time is money. So a business returning to operation will be faced with a whole load of unpaid bills, having lost the chance of earning money to pay them. And in that sense, its actually not that different to a household. You might have seen the articles recently clarifying that people getting their mortgages deferred because they are out of work will have interest charged on those deferred instalments. So multiply that, as a start to seeing how businesses will be spancilled.

Some businesses will go insolvent. That will leave a chain of unpaid debts, which someone will have to carry. And, even where there aren't insolvencies, there will be disagreements over contractual obligations that weren't met because of the lockdown, with associated costs and a need for someone to pay those costs. The Courts will be busy.

Stopping an economy like this is like stopping your car by driving it into a wall.

The One Doctor · 07-05-2020 8:55pm

Balf wrote: »

The short to medium term will be miserable. There's several negative trajectories.

Bear in mind, action have been driven by medical prescription without any regard for the economic cost. And the doctors seem to have very dim awareness of these things - they seem to think you can tell an economy to take a few months off the way you might tell a patient to ease up "sure, the work will still be there in a few months".

Put at its simplest, time is money. So a business returning to operation will be faced with a whole load of unpaid bills, having lost the chance of earning money to pay them. And in that sense, its actually not that different to a household. You might have seen the articles recently clarifying that people getting their mortgages deferred because they are out of work will have interest charged on those deferred instalments. So multiply that, as a start to seeing how businesses will be spancilled.

Some businesses will go insolvent. That will leave a chain of unpaid debts, which someone will have to carry. And, even where there aren't insolvencies, there will be disagreements over contractual obligations that weren't met because of the lockdown, with associated costs and a need for someone to pay those costs. The Courts will be busy.

Stopping an economy like this is like stopping your car by driving it into a wall.

The economy will be there to fufill your need for expensive lingerie and buttplugs, never fear.

Wanderer78 · 08-05-2020 6:36am

Balf wrote:

Stopping an economy like this is like stopping your car by driving it into a wall.

Is the economy far more important than saving lives?

niallo27 · 08-05-2020 6:40am

Wanderer78 wrote: »

Is the economy far more important than saving lives?

For the 7th ****en million time they are not mutually exclusive.

Wanderer78 · 08-05-2020 6:55am

niallo27 wrote:

For the 7th ****en million time they are not mutually exclusive.

The government had no choice but to shut down the economy, it's the first time a pandemic has occurred in modern times, there effectively wasn't other choices, what we do going forward is critical, not just for health reasons but for the economy. we d be better off doing radical things such as helicopter money to try save businesses, but that's very unlikely to occur, Ireland and in fact the EU is a fairly radical idea free zone, so expect idiocy from both our own government and from within the EU, to try get things going again.

Nutty Nutritionist · 08-05-2020 6:57am

TuringBot47 wrote: »

Undertakers.
Aldi/Lidl.
Internet providers/Netflix.
Maybe Google, with all the extra internet browsing their advert revenue must be multiple times the norm.
Online education.

Undertakers are no busier than the last couple of years. Stats provided are being manipulated.

snotboogie · 08-05-2020 8:12am

joe40 wrote: »

Ok my knowledge of macro economics is very limited, but why would there not be a fairly speedy recovery once virus abates or is under control.
There is very little spending at the moment which means many business are suffering, but the money that people aren't spending still exists.
Surely when things settle people that have income will spend again which will in turn stimulate business and growth and therefore jobs.
Obviously things like aviation will suffer terribly but other industries may rise.
Tourism should benefit from more domestic tourism, no idea if that will come close to mitigate the loss of foreign tourists.
Maybe I just looking for hope, the short to medium term will be terrible.

We get 10 million + international tourists per year. We haven't a hope of replacing even half of that with domestic tourism

Roger the cabin boy · 08-05-2020 8:28am

In 6 months time, The economy is going of pre-Covid is going to look an awful lot different than (hopefully) Post-Covid.

I am perplexed as to why the coming economic (and social) earthquake isn't being discussed with urgency at the moment. I imagine its the authorities wanting society to just get past the lockdown first and then worry about it, but i honestly believe its going to be monumentaly different.

For two reasons mainly,

A) Social distancing doesn't look to be going away any time soon. And by soon, i mean until a vacinne is found, tested and given 6 months to work its way through the population. The knock-ons of social distancing are mind boggling. In a sentance, its less of everything. LEss travel, social interaction, tourism, work, blah, blah...
Just take a minute to really consider what effect on society and the economy its having and its going to have. Look at the travel industry, its goosed. Genuinely, utterly goosed. Travel is the epicentre of much of what we do today, going to work, events, holidays, and so on. If the economy is a four legged chair, Social distancing has just sawn off one of the legs...

Society changes from Covid,
Think we will be going back to the ways of Pre-covid in a jiffy? Nope, that life has gone. We know know that we can work and do so in some instances, better, in a WFH enviroment ( manual labour, etc obv not). But knock out 30% of the workforce going to an office and what do you have? Swates of office blocks redundant, Motorways and roads clearing up and car sales, fule sales, lunch sales, (clothes?) sales, going through the floor. International/buisness travel is going to almost evaporate as clients and contractors now know they can for the most part, remote engage. which kills even more of the travel and tourism industry....
Less movement means less everything. Schools and Colleges must be looking at this and wondering how they are going to evolve. The 1st colleges to offer structured on-line centric education at a significantly reduced cost, are going to be the winners. The landlords of the student accoms the losers and as we move less, so the short term lets disappear. AirBNB industry will shrink, releasing much property back onto the market which has already ad aheart attack. Expect house prices to tank, which will knock on to the DIY/Building/Servicing industry as nobody will have any money... and so on and so forth.

Its massive. Absolutley gigantic. I have read opinion that this is going to be the biggest economic downturn in 300 years. "Biblical" as others have put it, and these are not from Doomer/Gloomers. These opinions are from normally sane comentators.

2008 was a bubble. It wasn't allowed to deflate back then and the underlying cancer of that era was never cut out. What was already dodgy ground has been built on again and again in the last 10 years.

Stock markets were nuts before the virus (Dow 30K?!!!) and they are still going nuts because those mechanisms have become utterly detached from reality.

Central banks have gone nuts. Negative interest rates? We are now going to punish the prudent to aid the profligate. We are building zombie companies, industries, economies.

We live in a world where its cheaper to have a mortgage than rent. How does a proper economy function like that? How on earth did we get to this?

Its a tower of Babel, and its all (or should do but we will see) going to come crashing down. Should have done in 2008 tbh.

In 6 months time? Its going to be very different....

Nutty Nutritionist · 08-05-2020 8:28am

Wanderer78 wrote: »

Is the economy far more important than saving lives?

If you look up Judy Mokovits on bitchute.com, she has some great info around this.

Wanderer78 · 08-05-2020 8:32am

Nutty Nutritionist wrote: »

If you look up Judy Mokovits on bitchute.com, she has some great info around this.

whats the craic, looks like a load of nonsense?

Nutty Nutritionist · 08-05-2020 8:37am

Wanderer78 wrote: »

whats the craic, looks like a load of nonsense?

Bitchute is just another platform, as Youtube have began to censor a huge amount of information. She is one of the top virologists in the World. Knowledge is Power as they say.

Roger the cabin boy · 08-05-2020 8:43am

Nutty Nutritionist wrote: »

as Youtube have began to censor a huge amount of information.

A really, worrying and dangerous trend.

We have a generation of people incapable of critical thinking who are eternally offended.

Wanderer78 · 08-05-2020 8:48am

Nutty Nutritionist wrote: »

Bitchute is just another platform, as Youtube have began to censor a huge amount of information. She is one of the top virologists in the World. Knowledge is Power as they say.

...and what does she say, apologise, but i dont have the time to watch anything else?

Nutty Nutritionist · 08-05-2020 8:55am

Roger the cabin boy wrote: »

A really, worrying and dangerous trend.

We have a generation of people incapable of critical thinking who are eternally offended.

I totally agree. Very few looking beyond mainstream media for information. Critical thinking and research has gone out the window. The answers are all there if people will just open their eyes....

Wanderer78 · 08-05-2020 9:05am

Nutty Nutritionist wrote: »

I totally agree. Very few looking beyond mainstream media for information. Critical thinking and research has gone out the window. The answers are all there if people will just open their eyes....

agree with the critical thinking, but theres a fair amount of ****e in none mainstream as well, many opinions, but with very little research or questionable research actually backing it up

Nutty Nutritionist · 08-05-2020 9:08am

Wanderer78 wrote: »

agree with the critical thinking, but theres a fair amount of ****e in none mainstream as well, many opinions, but with very little research or questionable research actually backing it up

Absolutely, and the reason we need to use our own heads and question everything. Critical thinking is just that.

Wanderer78 · 08-05-2020 9:13am

Nutty Nutritionist wrote: »

Absolutely, and the reason we need to use our own heads and question everything. Critical thinking is just that.

theres nothing necessarily wrong with mainstream media either, but being critical is a good idea of the information received from it

Roger the cabin boy · 08-05-2020 9:18am

Wanderer78 wrote: »

theres nothing necessarily wrong with mainstream media either, but being critical is a good idea of the information received from it

Just as important, is to not set that media on fire if you don't like what you are reading.

Free speech isn't easy to give and isn't easy to recieve.

Wanderer78 · 08-05-2020 9:20am

Roger the cabin boy wrote: »

Just as important, is to not set that media on fire if you don't like what you are reading.

Free speech isn't easy to give and isn't easy to recieve.

do we really have free speech?

there are processes that confirms information, both mainstream and alternatives are well capable of bypassing these processes, claiming they have so, and present this info as fact!

Roger the cabin boy · 08-05-2020 9:30am

Wanderer78 wrote: »

do we really have free speech?

there are processes that confirms information, both mainstream and alternatives are well capable of bypassing these processes, claiming they have so, and present this info as fact!

Well, no, we don't because free speech is hard work and well, the modern generation don't do hard work.

Instead of doing hard thought and speech to negate an opinion or view, Generation XYX just bans it.

History should be all the proof you need that this is a dangerous road to take.

Much of who we are and what we have done as a race is because enlightened people decided to take a different path and look through a different window.

If you ban those people, negate them, well, you are blowing out the candles which oft light up our world.

Nutty Nutritionist · 08-05-2020 9:32am

Wanderer78 wrote: »

agree with the critical thinking, but theres a fair amount of ****e in none mainstream as well, many opinions, but with very little research or questionable research actually backing it up

Roger the cabin boy wrote: »

Just as important, is to not set that media on fire if you don't like what you are reading.

Free speech isn't easy to give and isn't easy to recieve.

I don't believe free speech exists - its more like controlled speech.

We must question everything. I am not getting a dig at mainstream media. I'm merely suggesting many do not look beyond this to research information and educate themselves.

seamus · 08-05-2020 9:34am

Roger the cabin boy wrote: »

A really, worrying and dangerous trend.

We have a generation of people incapable of critical thinking who are eternally offended.

Yes, but thankfully they're over 60 and are dying out at a rate of knots.

Roger the cabin boy · 08-05-2020 9:43am

seamus wrote: »

Yes, but thankfully they're over 60 and are dying out at a rate of knots.

I think that is untrue tbh.

In my experience, its the new liberal generation who hasn't had to struggle.
Anyone under 40 who missed the 80's.

What will happen though is that as that generation matures and reaps the seeds of the entitlement they have sown, they will become extremely disgruntled and upset as the good life and easy streets fade in the post-covid world.

I don't think they have it in them to work 50hrs a week supporting a massive mortgage and huge childcare costs just to eak out a misserable life in some scruffy shoebox in the arse end of nowhere, for a pension worth sod all (if not stolen completely by the governments) and a ever increasing retirement date.

Once mum and dad have left the nest and they have to fend for themselves, its going to get ugly.

Snow Garden · 08-05-2020 9:43am

Roger the cabin boy wrote: »

In 6 months time, The economy is going of pre-Covid is going to look an awful lot different than (hopefully) Post-Covid.

I am perplexed as to why the coming economic (and social) earthquake isn't being discussed with urgency at the moment. I imagine its the authorities wanting society to just get past the lockdown first and then worry about it, but i honestly believe its going to be monumentaly different.

For two reasons mainly,

A) Social distancing doesn't look to be going away any time soon. And by soon, i mean until a vacinne is found, tested and given 6 months to work its way through the population. The knock-ons of social distancing are mind boggling. In a sentance, its less of everything. LEss travel, social interaction, tourism, work, blah, blah...
Just take a minute to really consider what effect on society and the economy its having and its going to have. Look at the travel industry, its goosed. Genuinely, utterly goosed. Travel is the epicentre of much of what we do today, going to work, events, holidays, and so on. If the economy is a four legged chair, Social distancing has just sawn off one of the legs...

Society changes from Covid,
Think we will be going back to the ways of Pre-covid in a jiffy? Nope, that life has gone. We know know that we can work and do so in some instances, better, in a WFH environment ( manual labour, etc obv not). But knock out 30% of the workforce going to an office and what do you have? Swathes of office blocks redundant, Motorways and roads clearing up and car sales, fuel sales, lunch sales, (clothes?) sales, going through the floor. International/business travel is going to almost evaporate as clients and contractors now know they can for the most part, remote engage. which kills even more of the travel and tourism industry....
Less movement means less everything. Schools and Colleges must be looking at this and wondering how they are going to evolve. The 1st colleges to offer structured on-line centric education at a significantly reduced cost, are going to be the winners. The landlords of the student accoms the losers and as we move less, so the short term lets disappear. AirBNB industry will shrink, releasing much property back onto the market which has already ad aheart attack. Expect house prices to tank, which will knock on to the DIY/Building/Servicing industry as nobody will have any money... and so on and so forth.

Its massive. Absolutley gigantic. I have read opinion that this is going to be the biggest economic downturn in 300 years. "Biblical" as others have put it, and these are not from Doomer/Gloomers. These opinions are from normally sane comentators.

2008 was a bubble. It wasn't allowed to deflate back then and the underlying cancer of that era was never cut out. What was already dodgy ground has been built on again and again in the last 10 years.

Stock markets were nuts before the virus (Dow 30K?!!!) and they are still going nuts because those mechanisms have become utterly detached from reality.

Central banks have gone nuts. Negative interest rates? We are now going to punish the prudent to aid the profligate. We are building zombie companies, industries, economies.

We live in a world where its cheaper to have a mortgage than rent. How does a proper economy function like that? How on earth did we get to this?

Its a tower of Babel, and its all (or should do but we will see) going to come crashing down. Should have done in 2008 tbh.

In 6 months time? Its going to be very different....

Good post. I too am puzzled why people are not discussing the upcoming depression in any substantive way.

I think your 'B) Society changes from Covid' is spot on. I hear people talking about returning to their favourite 'lunch cafes' in urban centres and then consider that most of them will be unable to operate or even be required.

The financial system itself is at risk because many countries will go it alone when things get really bad.

What would you recommend in terms of preparation for the post Covid world? I told my brother last night he should never have left the public service.

ShareShare · 08-05-2020 9:44am

Nutty Nutritionist wrote: »

Bitchute is just another platform, as Youtube have began to censor a huge amount of information. She is one of the top virologists in the World. Knowledge is Power as they say.

How is she measured as a top virologist? everything i read seems to state massive peer reviewed discrediting of her work on Chronic fatigue syndrome and her new virus isolate. There were warrants for her stealing samples of cell cultures from the company she was hired for, with co workers stating she ordered them to send them to a co researcher she was publishing with. She only has seemed to have published two pieces including her thesis.

snotboogie · 08-05-2020 9:48am

Roger the cabin boy wrote: »

In 6 months time, The economy is going of pre-Covid is going to look an awful lot different than (hopefully) Post-Covid.

I am perplexed as to why the coming economic (and social) earthquake isn't being discussed with urgency at the moment. I imagine its the authorities wanting society to just get past the lockdown first and then worry about it, but i honestly believe its going to be monumentaly different.

For two reasons mainly,

A) Social distancing doesn't look to be going away any time soon. And by soon, i mean until a vacinne is found, tested and given 6 months to work its way through the population. The knock-ons of social distancing are mind boggling. In a sentance, its less of everything. LEss travel, social interaction, tourism, work, blah, blah...
Just take a minute to really consider what effect on society and the economy its having and its going to have. Look at the travel industry, its goosed. Genuinely, utterly goosed. Travel is the epicentre of much of what we do today, going to work, events, holidays, and so on. If the economy is a four legged chair, Social distancing has just sawn off one of the legs...

Great points, I love seeing more and more people waking up to the fact that social distancing is not some minor inconvenience. Long term social distancing will transform human society in a way not seen since WW2.

Roger the cabin boy wrote: »

Society changes from Covid,
Think we will be going back to the ways of Pre-covid in a jiffy? Nope, that life has gone. We know know that we can work and do so in some instances, better, in a WFH enviroment ( manual labour, etc obv not). But knock out 30% of the workforce going to an office and what do you have? Swates of office blocks redundant, Motorways and roads clearing up and car sales, fule sales, lunch sales, (clothes?) sales, going through the floor. International/buisness travel is going to almost evaporate as clients and contractors now know they can for the most part, remote engage. which kills even more of the travel and tourism industry....
Less movement means less everything. Schools and Colleges must be looking at this and wondering how they are going to evolve. The 1st colleges to offer structured on-line centric education at a significantly reduced cost, are going to be the winners. The landlords of the student accoms the losers and as we move less, so the short term lets disappear. AirBNB industry will shrink, releasing much property back onto the market which has already ad aheart attack. Expect house prices to tank, which will knock on to the DIY/Building/Servicing industry as nobody will have any money... and so on and so forth.
.

I have been using Skype in the workplace for the last 10 years. I don't think I have ever met somebody on a business trip without talking extensively on Skype or Zoom first. These tools have been in place in large corporations for a long time and most were well aware of their benefits and drawbacks before the covid 19 crisis. Business travel will massively decrease but it will be a cost saving measure rather than a realization of the availability of remote communication.

What will the economy look like in 6 months time?

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