General Economic Situation - What Next!?

pennypincher1010

Hi There

I eagerly follow a lot of economic/financial related news on the Internet, as I have struggled financially for a number of years. I am always thinking ahead when it comes to money.

Despite all my research into the general state of the economy, I have to admit I am pretty confused over what to expect in 2009.

I've read about predictions of stagflation, inflation, deflation, hyperinflation, rising prices of precious metals, rising oil prices/falling oil prices, falling interest rates - to be honest I can't make any sense of it anymore!

I expected my bills to go through the roof due to the 'credit crunch' - yet when I walk into my local supermarket, there are big discounts everywhere (drinking 1/2 price beer as I write this) - will my current optimism and beer drinking fun be short-lived?

Any predictions on how the economy will pan out in 2009, and in particular how it will impact lower income home owners!?

:beer:

Bagette

No one knows. Remember what you read in the papers is just opinion, and if you read enough you'll get conflicting opinions, which is why you are confused.

What you do know is that the economy, in the UK and most our trading partners, is in recession. Less business being done, more companies will fail, more unemployment. With this, it looks likely house prices will continue to fall. The stock markets may fall, they may rise, most likely it will remain as uncertain as the rest of us until some positive signs emerge in the months ahead. After that, markets will start to recover but it will take time. Those that invest however have time to wait so are probably starting to buy. Just an opinion of course.

tomstickland

As soon as it happens then all of the experts will come out of the woodwork explaining that it was obvious what would happen.

Up until then it's anyone's guess.

One thing is certain and that's the recession.

pennypincher1010

Tomstickland, of course recession is a dead cert . I actually believe that we are at a major turning point (due to constantly diminishing natural resources), but what the heck 2009 offers, I don't know!

I reckon that frugality, and positive thinking is the way ahead (something that I've always tried to adhere to.)
Soon everyone will be a moneysavingexpert! :-)

Poppycat

I dont see prices in supermarket coming down yet, I know things are meant to. As usually in a recession services will suffer the most, I bet council tax goes up a lot due to government short falls and sickness increasing from all sectors including councils

ceridwen

Well.....personally I'm expecting to see the "Peak Oil" graph effect.....ie panic stations (like now), followed by a temporary lull (at a lower point), followed by panic, followed by a temporary lull (at an even lower point) and so on....whilst we adapt to a post Peak Oil society.

Things are going to be hard....very hard.....for many of us during the next few years....as we "transition" through to our ultimate destination as a Society...What exactly that will be is still rather open to conjecture.

My own personal "take" on this is that I'm involved in the Transition Town movement and I've been following a "Spend to save" programme (ie spending to make sure I've got what level of self-reliance I can manage.....useful reference books/stuff to help with growing my own food/water butt/wind-up gadgets/throws to wrap round myself for extra warmth/the house is reasonably sorted out and as fuel-efficient as I can make it/I'm clear of debt/etc).

I don't think any of us can predict exactly what is likely to happen over the next few years - we just have to take a "best guess scenario" and work with that. I've just explained mine - yours may be different.

One absolute certainty is that employers are trying every which way they can to cut back on employee costs - short-time working/making excuses to sack people/trying to "encourage" people to resign/etc/etc....so do protect yourself as best you can against that. Join the relevant Trade Union (if you're not in it already), make sure you are clear of debt, make sure you know your "rights" as an employee and try to have some emergency savings (bearing in mind the maximum allowable by the Dept of Work and Pensions is currently only £6,000).

globalds

I don't think were at peak oil yet .
I would put blame closer to the basics of accounting.
We have drifted over a ten year period, from an effective use of an excess of global credit to a position where unless investing into high risk projects, returns were not satisfactory for investors.
I think most financial institutions will be surprised ,not by being caught blind sided ,but by falling for the same worthless types of loans that caught them out in Asia ,South America and Africa .
This has always been about asset re-allocation .The only real way now the Chinese and Arabs are going to get any value back on the huge wealth they have acquired...And the only way the US and to a lesser extent Europe will be able to pay things back is to sell some of the family silver.
Just starting with the banks now ...But I would expect lots more big names and assets to be purchased at knock down prices.
Expect lots of Chinese tourists and maybe it is a good time to buy some of those worthless Iraqi Dinah ..