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September 20th, 2009

"Employment won't turn around for 3 years." [Sep. 20th, 2009|09:10 am]
Just as soon as house prices reach their previous level, and people pay off all their credit card bills, and they get a raise to negate the reason they had big credit card bills in the first place (which remember was caused because wages stagnated).

Then all the businesses need to do is NOT scoop off all the profits for themselves (you know - the shareholders?), and invest it into the business and their employees wages.

Then those same employees can start spending loads and inject all that money back into the economy.

3 years? Hmmmm.....

More like 10, if ever!

In a service/consumer driven economy, companies need to give workers lots of money so they can spend - in effect investing back in those same companies.
If you go and scoop all the profits... where do the workers get money from to spend!?

It looks like it was Credit Cards.

Now they're maxed out - we're back to the same problem - where is the money coming from for people to spend?

It can't be this simple can it? Can someone who knows lots about the economy explain to me how it will work out?

[source of my thoughts] : http://itcouldhappenhere.com/blog/wsjiswrong/

If the poor working class (like me!) can't get the economy going who can?

Well the upper class might:

If they do though, we'll be stuck with stagnant wages for a long, long time...
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This blog post deserves a link all for itself: [Sep. 20th, 2009|09:36 am]
In a consumer based economy - can the consumer drag business out of the recession without the businesses investing in workers wages to do that?

""Household borrowing rose along with incomes for decades. But after 2000, interest rates fell well below their long-term average because of the combination of US monetary policy and rising foreign purchases of US government bonds by Asian governments and oil exporters. When low rates were combined with looser lending standards, consumer borrowing soared. From 2000 through 2007, the ratio of household debt to disposable income shot up from 101 percent to 138 percent - as much in seven years as in the previous quarter of a century. Even with low interest rates, the ratio of household debt service payments to income rose to a record high.

Most of this borrowing fueled consumption. "

The upper class have half the disposable spending power... is it enough?
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Now is best time to buy a home, say six in 10 [Sep. 20th, 2009|10:21 am]
"More than half of the population think it is a good time to buy a property as the housing market continues to show signs of stabilising, research shows."

Oh blimey!
Are they just looking at prices in estate agents windows?

This bubble is following the last one very closely - we've even got that little blip just after the really big decline. I'm fairly sure that's what people are seeing here.
Does anyone else think people are making a HUGE mistake buying now?

If we're following the previous bubbles to their climax, then I hope people don't realise their houses haven't yet lost half of what they will stop at. (Well those that can't sell and are stuck where they are.)
That would cause serious unhappiness and consumer unconfidence. (I just made that word up).

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Vultures [Sep. 20th, 2009|12:54 pm]
Buy the debt that is owed to a country, then go after the debt that can't be paid.
How if the country can't pay?
By diverting any money coming into the country via aid or other means...

"The British judge who heard the case was clearly appalled, but he said the law gave him no choice but to require Zambia to pay $15m, a third of what had been demanded. Virtually all the debt relief the country had received that year – as a result of Jubilee 2000 and Make Poverty History – was wiped out."

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