Supposed economic 'experts' tell us different position statements every week as do politicians world wide.
So where do we ordinary folks look for the best opinion?
Well I don't know quite frankly but this week I was talking to someone who is not an economist, not a politician, not some sort of guru - just a pretty ordinary sort of person with no axe to grind and no votes to capture. A bit like you and me.
This person said his view of the future is that through the problems we have experienced there will be learning for the ordinary punter. We are actually smarter than politicians and experts think.
He feels people will much more careful financially in future; that we will not see a ‘boom and bust’ economy again; that house prices will rise only steadily after the recession is over rather than the massive price rises we saw in the late 1980's and the 1990's; that people will try harder to live within their means and not overstretch themselves
So there you have it - an amateur view of how things might look once this recession is over. I think it is as good a summary as any I’ve heard from experts or politicians.
6 comments:
I'm afraid I disagree with your friend.
I was talking with a group of friends and colleagues recently and a couple of things horrified me. One guy was saying that he's just started a big extension to his house although he hasn't got the money to pay the builder for everything he wants done. "But something'll turn up," he said, "It always does: a pay rise or borrow some more." Hmmm.
And another guy is moving into a massive new new house. He's buying something he couldn't afford pre-downturn and now can afford... but only by lieing about his earnings and mortgaging himself to the hilt.
I also read a report that said 'buy to let' mortgages are back.
I've no doubt that some prudent folks will be very cautious for the next few years. However, I think the collective memory of this crisis will fade very, very quickly. And if things start to escalate again, people will inevitably think to themselves: "I've got to jump on the bandwagon now or I'll miss out and I'll be left behind forever..."
Hi Mark - I guess my friend and I are seeing the world through rose tinted spectacles and with a touch of hope.
Something happened between my late beloved Dad's generation and mine.
Dad absolutely detested credit of any sort. His whole philosophy was 'If you don't have the money to pay for it then you don't have it'
I accept that is too simplistic in modern times.
We were all encouraged/pushed to become property owners (purchase of council houses) by Mrs Thatcher - and that meant millions of people were immediately in massive debt to lending institutions compared to their previous lifestyle.
Of course we should all be responsible borrowers from responsible lenders and never borrow beyond our means. That is great advice but temptation gets n the way and people 'think something will turn up' to use your words. People live for the short term.
I very much hear what you say Mark - and sadly, on the basis of history - I fear you will probably turn out to be more right than my friend. I hope nevertheless that he is right.
Thanks Mark - have a great Sunday!
Countries that have not outsourced manufacturing and maintained a strong labor base, even through Communism or another political philosophy not in concert with ours, will do quite well over the next several decades. Because the US and Britain don't really "make" anything, they can't do much to control their own or world markets (other than through their service spending). "Please extend me credit because I can't produce anything to make more financially."
Even though our countries have some wonderful advances and innovations in many industries, the rubber hits the road when countries truly manufacture the finished product and exports exceed imports.
I agree with your friend and Mark JF because much of this will be based on memory. Some people have stronger short-term memories, while others favor long-term memories.
However, economies of scale and the downturn will force the majority of world-wide citizens to reduce budgets and spending for the near term. The pain will lead to future pleasure, though more modest, as people find work and their wages begin to increase. The US banks have just reduced their small business lending by $1 billion to brace for more bad loans going bad. They hoard the taxpayers money and reduce borrowing to protect their own self-interests, while many small businesses will fold under the pressure.
There are many devices that "make up" spending by fear and we'll see these continue: Y2K, Terrorism, Identity Theft, 2012, Pig Viruses---other Viruses, and a whole host of other media driven/government driven campaigns that force spending.
Now that much of the world is suffering from economic downturn, the "hurry up and buy or die" marketing campaigns will become less frequent and less successful.
In summary, manufacturing and production is the key to any society's health and development, even if that involves serious violations of human rights in some countries. Governments are only successful when they have total control of the people or the people have total control of the government------the fuzziness of our systems today provide a total lack in direction or success.
Enough of my ranting already.
When I scribed Dropping Almonds (www.droppingalmonds.com) in 2007 and subsequently published in 2008, many of the issues were right in front of us and impending doom was inevitable...I had no idea the doom would come with such force, humility, and humiliation.
Gives me even more comfort that there is a God and we're merely sheep in a flock (the whole of accountability for us all). All of the greed, dishonesty, infidelity, and unethical practices are coming home to roost...and the pain is enormous for many. While some people may say that Tiger is human, we're accepting that his behavior is permissible for humans and excusable. I beg to differ...
Pales in comparison to the faith and strength of the people in Haiti though, as they've always had nothing but faith and family. We have much to learn from their experience, both catastrophic and brilliant. May God rest their souls and let help find those in need, as we saw yesterday; because, at the end of the day, we're all just striving to survive.
Keep up the good work Trev., you have friends all over the country that you don't even know.
Hi Scott - thanks as always my friend for taking the time to drop in at Simplicity Blog and for your kind comments.
Our two countries have much in common – not least the personal debt we seem to have accumulated. You are so right – we ‘make’ virtually nothing in this country now compared with a few decades ago –it’s depressing. My late beloved Dad worked in a Diesel Engine factory that employed over 10,000 people – it now employs about 2000 and is one of the biggest employees in the locality.
Due to the financial downturn and a slow down in business, Annie and I are realising how much non-essential stuff we have been paying for. Out of necessity we are making a big effort to significantly reduce our outgoings. Amazingly enough it is not that difficult to make a big difference and guess what Scott – we have not died so far as a result. It’s all about RELATIVE priorities. When I look at Haiti, for instance, I thank God every day for my relatively comfortable lifestyle – at least I have a roof over my head.
I share your belief in God as you know and He of course will always forgive us our greed and the error of our ways.
The faith of the Zimbabwean Fellowship in our Church is amazing to behold – they have such great faith in God – they are inspiring. They have very little material wealth but they have riches in faith.
They are inspiring and the faith in God of the people of Haiti is even more inspiring my friend. Did you see the TV coverage of the 10 year old girl rescued after 8 days who said what kept her alive was God – INCREDIBLY MOVING – we can learn so much from these people.
Amen Trevor,
At the end of the day, when we have lent in our pockets and little in the bank...we'll still have each other (as long as they don't cut off my internet!).
The same is true of you and Annie. You've never disclosed your finances to the Simplicity audience, but you have shown us how Simple it is to raise money for those that Care!
Have a good evening my friend...
Hi Scott- I guess my philosophy has to be - there is ALWAYS someone worse off then me.I'm pretty sure you and all our simplicity friends feel that way too.
It is great to be a part of this world wide family of support - thanks buddy :-)
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