It's declining and will continue to decline
It's declining, but will rebound
It will be average, then rebound
We don't know yet. We have to wait and see
Geithner Extends $700 Billion Bailout Program Until October - Bloomberg.com
Obama proposes spending our way out of recession
Obama proposes spending our way out of recession
I note the US Dollar has depreciated by around 16% this year, as expats on fixed incomes can surely attest.
Pleased to see Obama's plan is working.
Halve American real incomes over the first term and the economy should recover nicely.
That $ 170,000 salary will still be the same but will only buy half as much after four years.
Last edited by Chang; 10th December 2009 at 05:29.
I just hope nobody is sitting tight waiting for the Dollar to rise. Whilst I expect Obama wanted to get the worst out of the way in his first year there is likely to be a steady decline now for a very long time, with the possible exception of an election year...
PPI is up, as usual, more than expected.
Does this mean inflation is on the way (for the inflation believers?Producer Prices in U.S. Climbed More Than Forecast (Update2) Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Timothy R. Homan
Dec. 15 (Bloomberg) -- Wholesale prices in the U.S. increased more than anticipated in November, led by a jump in fuel costs and a rebound in truck prices.
The 1.8 percent increase in prices paid to factories, farmers and other producers was more than twice as large as anticipated and followed a 0.3 percent gain in October, according to Labor Department data released today in Washington. Excluding food and fuel, so-called core prices also exceeded the median estimate of economists surveyed by Bloomberg News.
The deflation crowed still has reasons for deflation.percent in 2010 may prevent suppliers from passing on a rebound in commodity costs even as the economy recovers. Federal Reserve policy makers, meeting this week, have said they expect inflation to remain “subdued” in coming months, allowing them to keep interest rates low.
“Competition is brutal,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York forecasting firm, who forecast producer prices would rise 1.2 percent. “If somebody raises their prices, someone else won’t. We’re squarely in the disinflationary camp. There is way too much spare capacity.”
Link & Entire: Producer Prices in U.S. Climbed More Than Forecast (Update2) - Bloomberg.com
Many people die at twenty five and aren't buried until they are seventy five.
There is only one thing on Earth that is worse, economicaally, than inflation, and that is deflation. An inflation rate of around 1% - 5% per annum is viewed as "healthy". Ideally there would be zero inflation/depreciation but that is little more than a dream. In the real world you either have inflation or deflation.
Inflation would be very useful for the current Administration since it would inflate asset values thereby making those high salaries worth even less
In order to remain competitive with countries such as China the USA needs to reduce labour costs. Obama is addressing this where Bush simply sat and moaned as the jobs all went overseas.
This deflation is bad bs has to stop.
Countries where inflation rules:
Yep, keep devaluating money, it's good for the economy
I guess inflation is great when you are leveraged to the max with your mortgage.
..You would prefer the America of the 1930's?
The countries you mention all have inflation way in excess of the 1 - 5% band I refer to.
I would much prefer to live in the UK in 2009 with asset prices gradually rising than in 1929 with everything people had worked hard for in their lives becoming worthless.
Tell me it's going to be alright. PLEASE!
"Goddamn it Lord, bless oh ye this bacon..."
George Liquor American
OK, It'a going to be alright.
Thank you! Now I can get some sleep.
Not worth starting another thread on this, so here it goes:
Ben Bernanke - Person of the Year 2009 - TIME
Just about sums up the US economy. T-Bills and Ben.
^ and diet Dr. Pepper
Peter Schiff interview: December 15, 2009 Unemployment at 25%? u3 rate? It's at about 17.5% now....
Link & Entire: A Tough Year Ahead for the U.S. Economy?
A Tough Year Ahead for the U.S. Economy?
By Jennifer Schonberger
December 15, 2009
Jennifer Schonberger: In terms of your near-term outlook for the economy, what are you expecting here next year?
Peter Schiff: Assuming that we don't have a currency collapse next year, then the economy will continue to deteriorate beneath the surface. The unemployment picture won't improve. We will continue to lose manufacturing and production jobs. The trade deficit will continue to expand. The savings rate will continue to fall. The budget deficits will get worse. Prices will be creeping higher for commodities -- particularly food and things of that nature. The dollar will be losing value, gold will be rising -- it's not going to be a pretty picture.
Schonberger: In terms of your outlook for the stock market in 2010, given your outlook for the economy, the government's actions, and the torrid run we've seen this year, are we coming to an inflection point here where the discounting machine maybe has overcompensated based on the fiscal stimulus?
Schiff: That I don't know. My guess is that the stock market in nominal terms -- in dollar terms -- will continue to rise, and that is going to confound the bears.
I think that the monetary policy and the fiscal policy we have is more likely to cause stock prices in dollars to rise because the policy the government has undertaken is to try to prop up asset prices by depreciating the value of the dollar. Since the majority of Americans, including the federal government, are massively in debt, they want this relief through inflation.
But people need to understand that just because stock prices are going up, it doesn't mean they're richer because they own those stocks. Stock prices are rising more slowly than the dollar is falling. They may have more dollars when they sell their stocks, but they'll be able to buy less stuff.
If you really want to see what's happening with stock prices, and take the inflation out of it to find the real value, then you look at stock prices in terms of gold. Right now the Dow is worth about nine ounces of gold. In 2000, the Dow was worth 43 ounces. So even though the Dow is only down slightly in dollar terms for the last decade, it's down 70% in gold terms. I think next year the Dow could fall precipitously in terms of gold. I wouldn't be surprised to see the Dow down to five ounces of gold, which is a significant fall.
Schonberger: Besides gold, where are you investing for 2010? It sounds like the U.S. isn't the place to be in your view.
Schiff: Unfortunately, no. Unfortunately, the policies that are being pursued by Congress and the Federal Reserve are destructive to the value of our money and are undermining the competitiveness and the productivity of our economy, while destroying profitability.
Any investor who wants to preserve or enhance their wealth has to look outside the U.S. The nations and areas of the world I think are the most vibrant now are in Asia -- Hong Kong as well as mainland China. I'm also buying the resource countries like Norway, Australia, and Canada. I own a lot of mining stocks -- principally Canadian companies. I'm also investing in parts of Europe and Latin America.
I think gold stocks relative to the price of gold have underperformed the price of gold for years. If you look at gold, right now it's still better than 10% above its 2008 high. Yet gold stocks are better than 10% below their 2008 high. Silver is still below its 2008 high by more than 10%. So I don't see a lot of speculation, despite what you hear about a bubble in precious metals. I don't see any signs of that all. Yes, the price is going up, but for good reason. I don't see a lot of speculation on the part of the general public.
Schonberger: Are you at all concerned about a bubble brewing in China, given your investment there?
Schiff: Yes, I am concerned about that. They are creating too much money in China, and that is problematic. It will create bubbles in assets there. [However,] I think that the bubbles could inflate for a long time, given the real productivity and competitiveness of the Chinese economy and the savings that they have. This bubble could expand for five or 10 more years.
At some point, if we get real crazy valuations in Chinese assets, then I'll have to move out of that market. Right now, if you look at most Chinese companies based on dividend yields, P/E ratios, you don't have those kinds of crazy valuations yet.
Schonberger: You're running for the U.S. Senate in 2010. With the unofficial unemployment rate at 17%, what do you think is the best way for us to create jobs in America?
Schiff: Jobs come from the private sector. The reason people are able to get jobs is because a businessman, an entrepreneur wants to make a profit; and he sees a profit opportunity and he has the capital to attract labor. So you need to have profit opportunities for business and access to capital, which comes from savings.
The Obama administration is attacking capital formation and attacking profitability of small businesses by increasing the cost of running a business. By increasing taxes and regulations on small business, they are diminishing the ability of businesses to offer employment opportunities. ... The only way we're going to get real job growth is if we dismantle much of the government impediments already in place that are making it less likely that businesses will expand and be creative. Unfortunately, all the things that Obama is doing right now are so destructive to small business, and so the jobs are going to disappear.
Schonberger: So you think the unemployment rate is going to go higher than where we are right now?
Schiff: Yes. The government reports unemployment at 10%, but if you look beneath the headline number at another number that the government also reports -- the unofficial unemployment rate -- that's at 17%. The unofficial rate includes people who have given up looking for work because they're discouraged as well as people who accepted a part-time job to make ends meet while they're still looking for a full-time job.
If you go back to the 1970s -- or the Great Depression in the 1930s, when unemployment was over 20% -- they used the unofficial number. So when the politicians say, "It's not as bad as the Depression. It was 20% then and it's only 10% now" ... if we use the same number, it's 17% now. It's actually almost as bad.
Schonberger: Do you think the unofficial unemployment rate will get as bad as
Schiff: ... There is a good chance we could hit 25% using the unofficial rate before Obama leaves office. The actual headline number the government uses, that might get to 13% or 15%.
Commercial rate is the current shoe that is dropping.
I thought a recovery was under way?
http://www.bloomberg.com/apps/news?p...d=aHtqsgJE35sUU.S. Commercial Property Falls to Lowest in 7 Years (Update3)
By Brian Louis
Dec. 21 (Bloomberg) -- Commercial property values in the U.S. declined in October to the lowest level in more than seven years as unemployment reduced demand for apartments, offices and retail space.
The Moody’s/REAL Commercial Property Price Indices fell 1.5 percent in October from September to the lowest since August 2002. Prices were down 36 percent from a year earlier and are 44 percent below the peak in October 2007, Moody’s Investors Service Inc. said in a statement.
Values are dropping as U.S. unemployment climbs and consumers cut spending. Office vacancies may approach 20 percent next year as employers hold off hiring, commercial property brokers Jones Lang LaSalle Inc. and Grubb & Ellis Co. said last month.
“The number-one issue facing commercial real estate right now is the value declines that we’ve seen since prices peaked,” Matthew Anderson, a partner at Foresight Analytics LLC in Oakland, California, said before the data were issued. “I tend to think that the size of the declines moving forward is going to be smaller.”
An estimated $1.4 trillion of commercial real estate debt is scheduled to mature over the next five years and Foresight estimates that 53 percent of it is “underwater,” meaning the value of the property is less than the mortgage, Anderson said.
More Declines Forecast
Commercial property values may decline by a total of 50 percent from the peak to the bottom, Anderson said.
“This is the worst that we’ve seen since World War II,” Anderson said.
Prices in the New York area office market fell 38.1 percent over the past four quarters, Moody’s said today.
The delinquency rate for U.S. commercial mortgage-backed securities rose to 4.47 percent as of the end of November, Moody’s Investors Service said on Dec. 10. That’s almost six times the year-ago rate of 0.75 percent.
Delinquencies for commercial real estate mortgages held by banks may rise to 5.6 percent in the fourth quarter and reach as much as 8 percent next year, Anderson said.
The U.S. unemployment rate fell to 10 percent in November from a 26-year high of 10.2 percent in October, according to the Labor Department.
To contact the reporter on this story: Brian Louis in Chicago at email@example.com.
Last Updated: December 21, 2009 12:30 EST