Stop youth unemployment - stop having children - Japanese style

John_Pierpoint

When will the politicians wake up and tell us the truth about future prospects for economic growth?
Will they continue to believe that we are facing just a short term little difficulty and then it will be business as usual.
Rather than tell us the truth, that the world as a whole is up against the limits to growth, they continue to believe that a bit more borrowing from our children, a chunk more population growth, even if we have to import it and we can get pack on the track of everlasting increasing prosperity.

Jeremy Grantham - the man who has to put his money where his mouth is; the man with a record for getting his prognosis right; talks to the BBC.

For those who might find his originally Yorkshire voice and accent a touch annoying and who have not heard of him before, here are a couple of background links:

http://en.wikipedia.org/wiki/Jeremy_Grantham
http://www.businessinsider.com/jeremy-grantham-us-growth-forecast-2012-11#comments

Here is the interview:

http://www.bbc.co.uk/programmes/p0148yp8

Percy1983

I will agree we can't keep running it as a pyramid scheme as it has been, the base just can't keep getting bigger.

marathonic

As most people are aware, a lot of companies on the stockmarket have cut back on expenses and the P/E ratios are pretty good at the moment.

As they appear to be doing okay in a stagnant economy, I believe that a lot of companies are well poised to be able to go on a pretty big recruitment drive when economic growth returns. They just can't do it without the growth in place as it's too risky.

When growth does return, it'll be a self-fulfilling prophecy. You seem to be suggesting that "this time it's different" when it really isn't.

The ONE area I think that the government are stupid to cut in is education. Let's face it, the UK is never going to return to sewing t-shirts together again. Those jobs have gone east and will stay there. We need a highly educated workforce, even if a proportion of that workforce were to emigrate.

An emigrated workforce on high earnings is likely to repatriate some of their earnings back home either through saving and returning or through helping out struggling families at home.

Carl31

Are both rates not the lowest for about 20 years at the moment, im sure i read that recently

HAMISH_MCTAVISH

John_Pierpoint wrote: »

Jeremy Grantham -the man with a record for getting his prognosis right;

Originally predicted house price falls of 50% in the UK and 40% to 50% in Australia.

He has since modified those predictions...

First he blamed government interventions. Then he admitted that you'd need to build more houses for meaningful falls to happen.

So in other words, he got it wrong.

marathonic

How many economists are there in the UK that predict house price changes? I'd imagine there'd be 100's.

Therefore, there are probably 20-30 economists that predicted drops from peak in every 5% band from +10% to -60%.

With that in mind, do you really consider an economist that got the prediction right some sort of prophet?

PaulF81

marathonic wrote: »

As they appear to be doing okay in a stagnant economy, I believe that a lot of companies are well poised to be able to go on a pretty big recruitment drive when economic growth returns. They just can't do it without the growth in place as it's too risky.

When growth does return, it'll be a self-fulfilling prophecy. You seem to be suggesting that "this time it's different" when it really isn't.

What evidence do you have that we will see the kinds of growth we have seen before? Oil is starting to run out and the Chinese have managed to obtain rights to the majority of the world's natural resources. The West is saddled with debt and faces a future existence similar to that in Japan, with interest rates in the doldrums. And lets not forget our rapidly aging workforce, that requires penury levels of increasing NHS budget and state welfare (state pension in particular).

In short, I dont see anything in the west that doesnt say we are running out of resource, we are vastly overpopulated and we will ultimately go down the bankrupcy route rather than making the difficult decisions necessary to guarantee the long term health of the west.

PaulF81

marathonic wrote: »

How many economists are there in the UK that predict house price changes? I'd imagine there'd be 100's.

Therefore, there are probably 20-30 economists that predicted drops from peak in every 5% band from +10% to -60%.

With that in mind, do you really consider an economist that got the prediction right some sort of prophet?

No, but I value anyone who understood the route causes of our financial predicaments before the happened. Scale is relative. It takes true understanding of how fekked we all are to have predicted the Credit Crunch.

Dont let confirmation bias generated through a lifelong investment in a private pension plan bite you in the backside.

John_Pierpoint

HAMISH_MCTAVISH wrote: »

Originally predicted house price falls of 50% in the UK and 40% to 50% in Australia.

He has since modified those predictions...

First he blamed government interventions. Then he admitted that you'd need to build more houses for meaningful falls to happen.

So in other words, he got it wrong.

I guess he was wrong footed by the UK's ability to devalue its money's stored value and rob those with funds invested at interest, by reducing the base rate to 0.5%.
J.G. in the interview does say hold off buying the farm, until rising interest rates cut capital valuations.

The Australians are still doing very well from the high prices of commodities in particular minerals.
[I have a young nephew, with few serious exam results, who set off on one of those round the world trips. After a bit of share fishing he has washed up, doing a shore based job for an Australian off shore oil venture. Making more money than any of his relatives.
I went for a holiday in Aus in '98. Tasmania and the British Isles are comparable in many ways, including the duplication of place names. A similar farm down under was (then) 25% of the UK price.]

The Island of Ireland is about 1.23 times the size of Tasmania; however the population:

The Island of Ireland is 4.7 + 1.5 = 7.2 million versus 0.5 million for Tasmania.

John_Pierpoint

marathonic wrote: »

With that in mind, do you really consider an economist that got the prediction right some sort of prophet?

I think the most important part of the interview was debunking the real growth rate. [It was in the late 1960s, when watching "Late Night Line up" and the topic got onto the nascent environmental movement, there was a gathering fuss about air quality in Los Angeles.
I had my light bulb moment when someone said "When the smog gives people cancer, treating them that will increase the gross national product".
It was about the same time as this hit song
http://www.youtube.com/watch?feature=player_detailpage&v=ZgMEPk6fvpg
].

So deduct 0.1% for climate change damage (anyone been flooded in the last 12 months ?) and 0.6% for the additional costs of finding and digging up scarce commodities.

Nobody ever gets the future right, mainly because of technological developments fired by hydrocarbons. Yes the future will be better gizmos; however what is quality of life?

An interesting little factoid emerged a couple of nights ago:
We take it as a fact, don't we, that the Chinese are more short sighted than the typical Westerner ?
Well yes and no; a study of Chinese in Singapore demonstrate that it is true, however when they migrate to Australia their children are a lot less short sighted.
The explanation is thought to be that Chinese kids in Sydney get to play out doors for 2 hours per day, the equivalent period outside in Singapore is 20 minutes.