Do you think we could have avoided recession if the Tories were in power?

Generali

Wookster wrote: »

My money is on the US$ going through the floor when China starts to sell US$ for their own stimulus/ rescue/ development packages.

Well that's going to be the interesting bit, what happens when the Chinese sell USD denominated assets. It is quite possible that the Yanks will print money to buy them up, in fact it's quite possible that is what the most recent 'stimulus package' is all about.

What will the Chinese do if the USD/CNY rate starts to fall?

Radiantsoul

Generali wrote: »

Well that's going to be the interesting bit, what happens when the Chinese sell USD denominated assets. It is quite possible that the Yanks will print money to buy them up, in fact it's quite possible that is what the most recent 'stimulus package' is all about.

What will the Chinese do if the USD/CNY rate starts to fall?

I don't think they could accept the social unrest that would cause. They need to be able to export to keep the population employed.

Wookster

Generali wrote: »

Well that's going to be the interesting bit, what happens when the Chinese sell USD denominated assets. It is quite possible that the Yanks will print money to buy them up, in fact it's quite possible that is what the most recent 'stimulus package' is all about.

What will the Chinese do if the USD/CNY rate starts to fall?

Indeed - the relationship between China & America is quite interesting and co-dependent at the moment.

I suspect that the Chinese will want to peg the exchange rate to the dollar as tightly as possible, the US will huff and puff but as long as they need the Chinese to support Obama's stimulus package there isn't much they can do.

Generali

Radiantsoul wrote: »

They need to be able to export to keep the population employed.

Who's going to buy? Consumption is sooo 2007.

That's the problem everyone faces as a result of deleveraging. Nobody's buying so nobody can sell. People just want to pay down their debt.

80% of the cash that the Aussie Government is giving to people as part of the 'stimulus package' is used to pay off debt for example.

All that's happening is that private debt is becoming national debt. It's crazy.

Generali

Wookster wrote: »

Indeed - the relationship between China & America is quite interesting and co-dependent at the moment.

I suspect that the Chinese will want to peg the exchange rate to the dollar as tightly as possible, the US will huff and puff but as long as they need the Chinese to support Obama's stimulus package there isn't much they can do.

You're probably right. The fly in the ointment is that the Chinese need their money back right now to support their Government. What happens when the Chinese call in their debts and find the US-ians won't repay as they're not prepared to live in a way that many Chinese people consider normal? Should very poor Chinese people be propping up the US standard of living? I suspect Chinese people think they shouldn't!

Wookster

Generali wrote: »

People just want to pay down their debt.

80% of the cash that the Aussie Government is giving to people as part of the 'stimulus package' is used to pay off debt for example.

All that's happening is that private debt is becoming national debt. It's crazy.

Unfortunately this just needs to happen - debt needs to be paid down to normal levels before normality can resume.

LauraW10

A._Badger wrote: »

Yes, but what proportion of those exports were products, as opposed to services? Perhaps even more to the point, how sustainable, in the light of recent events, were the sectors from which they came?

The British economy has been living on borrowed time for a long while. Sooner or later we will have to reckon with the cost.

In other words - "We're all doomed - we've been having a good time and now we are to be punished"

....recessions aren't a punishment they are just economies getting out of kilter - get a grip

Generali

LauraW10 wrote: »

In other words - "We're all doomed - we've been having a good time and now we are to be punished"

....recessions aren't a punishment they are just economies getting out of kilter - get a grip

What do you think the current recession is about, please? Is it just that things got a little out of kilter?

How does that compare with the kilterishness of the early 90s or early 80s do you think?

lostinrates

LauraW10 wrote: »

In other words - "We're all doomed - we've been having a good time and now we are to be punished"

....recessions aren't a punishment they are just economies getting out of kilter - get a grip

but would you say they are a consequence? If so they are a sort of 'punishment' arne't they?

LauraW10

Generali wrote: »

What do you think the current recession is about, please? Is it just that things got a little out of kilter?

How does that compare with the kilterishness of the early 90s or early 80s do you think?

Recessions are a normal part of the economic cycle - they are not punishments. Neither are the good times "rewards" for perceived "good behaviour". So to quote Michael Winner " Calm down dear - it's only a recession!"