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Thread: Another Economic Depression?

  1. #1

    Exclamation Another Economic Depression?

    (Sorry if this is not in the right forum, but since it said 'politics,' I suspected it would go here)

    If you have been noticing lately with America's economy, many predict of a recission coming a long. For those who do not know what a recession is, it basically means that people are not buying enough products from different areas of the marketplace, which creates an economical slump. A longer form of a recession is a 'depression,' most noted from the 1930's is the 'Great Depression.'

    I may not know as much about consumer-ism (sp?), but the news terrifies me that we can go into a depression soon. Since many of you may be more fluent in this situation, what are your ideas? Is a recession going to occor or already has? What has been the problems? What are the solutions? Is this a fake prediction or something much bigger?

    Explain your ideas...seriously, I'm freaked out about this!

  2. #2


    we have many agencies that keep this from happening that were created in the wake of the great depression such as the F.D.I.C. and the FTC. SO yeah its a slump but it will never turn into a great depression though the way we're willing to devalue our money does worry me.

  3. #3


    Will someone please copy paste the definition of a recession, I believe I looked it up on Wiki and I did not understand.

    To not be a douche, I need to know what it means.

  4. #4


    there are things in place to make sure that there is never another black tuesday...but what we are seeing now is this whole housing market going to crap....and people moving away from cities into suburbs that are turning into just rows and rows of subdivisions that are foreclosed.

  5. #5


    I'm not very informed about the details of the American situation, but I think I can relate to what's happening in Europe - or, at least, in Italy - since a few years.

    Everyone keeps moaning that people don't have enough money to live, that there's crisis, and so on. But if you go around, you see that nearly everyone owns a new car, there are way more expensive luxury cars than in the past, in the weekends there's plenty of people around despite gas prices constantly growing to crazy levels, shopping centres are always crowded and luxury goods as HD TVs, surround systems etc etc keep selling more than ever. So, how's that possible? The answer is: fundings.

    People here keep doing fundings like drinking water, and for everything. In other words: they keep buying things with money they don't have. And I can understand it if you do this for your home, your car, or something you really need. But now it has become a praxis for everything, even the most unnecessary things, and when people find themselves not being able to pay for all the fundings what do they do?...... they open a further funding to pay for the previous ones!

    What's worse, the government encourages this behaviour because that's what the consumistic society is based upon: if people don't keep buying, economy doesn't "turn around" (to quote a government TV spot of some time ago), no matter if you could perfectly do without the last model of car, or the 50' HD TV. But is it acceptable to consider "old" a 5 y/o car just because the car factory needs to keep selling, and encourage people to throw away perfectly efficient goods just to "make the economy turn around"?

    Now, I'm not an economist, but if people keep buying things with money that they don't have, the recession is far from being an irrealistic scenario, since the economic system sooner or later is going to collapse like someone who has been running too fast for too long.

  6. #6


    it's all credit. people would be better off just whipping out some monopoly money from the state of parker brothers and use that. i used to have credit cards (to gain credit so i could buy things i have money for like apartment, etc. ironically) and it's a clusterf*ck idea. all borrowed money like loans for house people can't afford, or cars, or borrowed credit, ect. is all set up so you fail. even if you come out of a credit card unscathed with paying all your payments on time you still have payed an exoberent amount of money to what you have boughten. not only that the value of said item (ex: a loan on a used or new car) goes down. so say you spent $7000 on a used car and you pay the loan off in 4 years you not only have payed (hypothetically speaking of course... depending on interests etc.) 9 or $10,000 into the car it also has devalued to $4000 by the time you finished paying for it.
    TL;DR: just don't do credit unless you need to gain it for backing in a financial situation.

    oh and as far as the OP goes...
    we seem to be heading into stagflation and it's all because of a few main factors (don't quote me because i could be mixing this up): first we import way too many goods that we ported overseas to be manufactured (i.e. china), we're borrowing too much money from stronger or rising economies while our dollar is weakening (again china), and our interest rates (and the currency rates compared to other countries) is diving to save what businesses we have left over here.

  7. #7


    In a normal economy, economic output (i.e. the value of all the goods produced and services offered) increases every year. A recession means that the economic output has fallen in the past year (or quarter, or half year, or month or whatever). In order words: Comsumers and companies are spending less money on goods and services. Obviously, that's a problem, because the firms producing the goods or offering the services will have to cut jobs, and profits will go down too, which makes the stock market fall.

    A "Depression" in economic terms is not defined. I'd say it's a long-lasting recession with a few extra problems mixed in. Back in the early 1930s, during the "Great Depression", America had problems with a lot of bank failures. I.e. people lost their jobs and their savings because their bank collapsed. The risk of bank failures is rather minimal these days, because most countries have learned their lesson and banks are now subject to severe regulation (e.g. deposit insurance, equity restrictions, and American banks are still facing some size and product restrictions).

    Currently, the world economy is facing quite a few problems, mainly rising prices for resources (oil, steel, food), the global quest for environmental protection due to the changing climate, and the increasing importance of places like China and India. In addition, Americans have a weakening currency.
    I'm unable to tell you how bad your recession is going to be, or how long it's going to last (if I could tell you; i wouldn't be sitting here typing this, I'd be optimizing my investments and become a billionaire!), but it's not impossible to snap out of it, even under the current conditions. At least our German economy is doing resonably well after about a decade of slow movements and the bitching and moaning quattrus is talking about for Italy.
    However, our (German) ways of spending money and financing spending differ completely from the American (and British) ways of financing, so the crisis may be worse for America than I was for us.


  8. #8


    a majority of countries are trying to convert most of their american assets over to the euro which they've been trying to do for decades now. OPEC back in the 80's or so tried converting their market over to a euro from a dollar amount. so, to explain better, all transactions were done in dollars meaning they had to buy and sell american currency making it gain worth. lately, with the downfall of american credit and borrowing people have been abandoning it for stronger currency. oh and as far as OPEC's plan to use euros did fail back then it looks like it could happen soon thus creating a bigger problem for america.
    in short, back in the 1970's we went from gold reserves back to a credit system, this credit system relied solely on the value of the dollar in trade and was strengthened by the rising cost in oil. so with OPEC trying to separate from our currency you can see where this is headed.

  9. #9


    Quote Originally Posted by kite View Post
    a majority of countries are trying to convert most of their american assets over to the euro which they've been trying to do for decades now.
    Err...the Euro didn't even exist 10 years ago. It was launched in 1999 as a virtual (accounting) currency, and coins and banknotes first appeared on Jan 01, 2002. So it's not even a decade old. The Euro did, however, replace the ECU - European Currency Unit, which was conceived on 13 March 1979 as an internal accounting unit and consisted of a basket of all currencies of the EC (European Community) member states.
    In other words: Your statement is wrong!


  10. #10


    No recession in Australia . The weaker America gets the stronger Australia seems to be getting. We have low unemployment with huge demand in jobs. Our housing market is booming as are all natural resources excluding agriculture.
    We just don't have enough people to reach the potential we have at this time.

    America is more heading for a recession due to the credit card companies allowing people to take loans that the companies knew they couldn't pay. They did this because they then sold this loan to another company so they didn't care if it fell through. (Yes your credit deals are for sale)
    The US government is trying to help the people who are now losing everything but it's hard without wiping debt...which you can't do.
    This means these people can't spend since they are trying to get out of debt and the corporations make less money so fire a few people who then also can't pay their debt and it builds up to... what it is now.

    Why do I know as much about the US economy as my own country? Crap! I've been Americanised... My pet hate. (No offence but I don't want to adopt someone else's culture when I already have my own

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