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Likelihood of UK double-dip downturn dwindles
Comments
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Given the rumours are now circulating about a 10% cut in public spending over the next three years, and the fact credit looks like it is actually starting to contract, I really wonder how people can be so optomistic. What's been saving the economy is a bucket load of fiscal and monetary stimulus. Now, we are going to replace it with fiscal contraction. Um, so how is the chance of a double dip recession lower this month than last month?
Its precisely removing the fiscal stimulus too early that made the great depression "great". At the comparable stage in the "great depression", the contraction was only really quite moderate.
In my mind, we have a problem right now.
Although the stimulus has held things up through spring and summer, the stimulus has to end. And were entering autumn and winter.
We do not have the money, nor the means to create this money to carry on the stimulus at a level we have been. How much more QE can we do? How much more debt can we create?
The bulls will be correct. This recession will end. Game over for this one.
However, what they never speak about is how this is going to be paid back, only that this recession has ended, all the bears are wrong etc etc.
This recession may well have ended, through stimulus.
As far as I know, QE has come to an end for now. VAT is going up in December, and then it will possibly go up again after the election to around 20%. Car scrappage is nearing the end. BOE rates have been cut to within an inch of their life.
So can we now come out of this recession and stand on our own two feet?
Human spirit will apparently see us through. Personally, I believe theres another recession looming, and this one will be a bad boy. Unless of course theres some more stimulus to be had. I'm just not sure what that stimulus will be, or even how we can do it.
If a bull, maybe chucky, really could explain how we will stand on our own two feet I would be very interested, or maybe conrad could tell us how our spirit will sort us out.0 -
Graham_Devon wrote: »In my mind, we have a problem right now.
Although the stimulus has held things up through spring and summer, the stimulus has to end. And were entering autumn and winter.
We do not have the money, nor the means to create this money to carry on the stimulus at a level we have been. How much more QE can we do? How much more debt can we create?
The bulls will be correct. This recession will end. Game over for this one.
However, what they never speak about is how this is going to be paid back, only that this recession has ended, all the bears are wrong etc etc.
This recession may well have ended, through stimulus.
As far as I know, QE has come to an end for now. VAT is going up in December, and then it will possibly go up again after the election to around 20%. Car scrappage is nearing the end. BOE rates have been cut to within an inch of their life.
So can we now come out of this recession and stand on our own two feet?
Human spirit will apparently see us through. Personally, I believe theres another recession looming, and this one will be a bad boy. Unless of course theres some more stimulus to be had. I'm just not sure what that stimulus will be, or even how we can do it.
If a bull, maybe chucky, really could explain how we will stand on our own two feet I would be very interested, or maybe conrad could tell us how our spirit will sort us out.
Some good points here.
I wonder if we're getting a little too caught up in the specific meanings of words in our debating. After all, by the technical definition, yes, clearly with a 0.2% increase, we're out of recession. That point is not debateable.
However, is the downturn complete? I think that is a seperate question, & the response "the recession is over" is a sleight of hand to detract from actually answering fully.
I remain convinced not all the bad news has come out.
I maintain that the personal debt issue has yet to be properly addressed.
Unemployment (& the impacts of) are going to continue rising.
QE can only go on so long before becoming counter productive. Further, despite all the QE, banks appear to still not be lending to each other, & libor continues to fall. There are folks more knowledgeable than me who are concerned by this.
Fuel prices will continue to rise, as will associated costs.
Credit, IMV will not become cheap for some time.
Likewise, savings rates will not be beneficial for many for some time.
The big boned lady hasn't started warming up yet. Lets hang fire...It's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
lemonjelly wrote: »
I'm fairly confident there are those who would agree that we've merely postponed the worst. QUOTE]
As I predicted a long time ago, the permapessimists would start to use this line in the upswing.
So let's look forward to the threads on 'The comming crash of 1015'
And then the ones on the imminent Battle of Hastings?0 -
They didnt have any stimulus in 1929 or 1930 as far as I know. They starting building the hoover dam in 31/32 and didnt finish till 36 and it cost about 3/4 of a billion over that timeIts precisely removing the fiscal stimulus too early that made the great depression "great". At the comparable stage in the "great depression", the contraction was only really quite moderate.
Biggest cause imo was failure to meet market demand because of import tarriffs
It'll be no great disaster if america has to work for half the wages so long as they are all still employed, its really a case of swallowing their pride imo and that'll decide if they repeat mistakes or not0 -
Graham_Devon wrote: »If a bull, maybe chucky, really could explain how we will stand on our own two feet I would be very interested, or maybe conrad could tell us how our spirit will sort us out.
if you think that i'm a bull you should really look up the definition of what one is.0 -
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if you think that i'm a bull you should really look up the definition of what one is.
It is a thing with two horns, a massive pair of xxxx and doesn't like red (apparently)
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Graham_Devon wrote: »Are you claiming you are not?
What are you claiming you are then?
of course i'm not - do i ever claim that prices will rise upwards?
i'm currently bearish but was bullish 9 months ago.
you probably don't but do you realise that every bull market has a number of bear markets during it?
there are plenty good books you need to read before you start trying to preach devon.0 -
Hey chucky, if you're about can I ask your views on post 54 in this thread please?It's getting harder & harder to keep the government in the manner to which they have become accustomed.0
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