Where is the US economy headed?

I don't know that there's much anyone can do about it. The economy has become a monster that has taken on a life of its own.

No matter who gets elected they will inherit a mess left by Bush and the conservatives. Not only is the economy in shambles but we're in two endless wars and have a hugh debt.

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The huge deficit concerns me the most, because as our economy tanks, the goverment will have less revenue while increasing expenditures. That increases the interest payments on those loans to China and Japan who owns most of our government bonds. That will further decrase the value of our currency. We're already spending monopoly money today, but most Americans just don't realize the impact that's going to have for the future of our economy. Inflation, anyone?

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Is this headline trying to tell us something? Where have they been all these months? LOL

Tuesday, February 26, 2008
Last Update: 2:30 PM EST
New Data Show Rising Inflation and Slumping Home Values

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i lol'd. i try to tell my friends that they need to quit wasting money on ebay buying records and rare cd's but they dont listen.

i stay grindin and shinin, im not tryin to die when the gov't cant provide things. not tryin to buy ice and rings , diamonds and things. im buyin ar -15's and rice and beans.

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Rare CDs will have less value when people are struggling to put food on the table, and a roof over their heads. The PVM will insure the loss of any value left in their purchase.

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BBC: Dollar falls to record euro low

Quote:

The dollar has fallen to a fresh record low against the euro, after weak economic data renewed fears that the US economy may be facing recession.

After figures showed a sharp rise in US home foreclosures and another fall in American consumer confidence, the euro hit an all-time high of $1.4982.

Traders think the Federal Reserve may have to keep cutting interest rates.

Such a move would further undermine the dollar as traders move to currencies with a higher rate of return.

Five-year low

The latest sign of falling US consumer confidence came from the closely watched Conference Board survey.

It said consumer sentiment fell to a five-year low in February due to growing recession fears.

At the same time, the number of US homes facing foreclosure rose 57% in January compared with the same month of 2007.

Last month the Fed slashed interest rates to 3% as it tried to prevent the US economy falling into recession.

"With so few consumers expecting conditions to turnaround in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase," said Lynn Franco, a director of the Conference Board's consumer research center.

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Since 2005, how far have they cut the rates? i am not sure if they can keep cuttin it, thats all i hear about cut cut cut cut cut.

man, are we in trouble or what? it sounds like a horror movie, how bad is it going to get for the average consumer?

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Just my guess, but here's my .02c worth.

The subprime mortgage debacle will last through next year, and more families will be paying a mortgage on their home that's worth a lot less in market value. Their home mortgage interest rate at over five percent "is" in fact part of the inflation when their salaries do not keep up with the inflation rate. Add the inrease in cost of food and energy, and the average family is not only suffering from inflation, but no savings and/or spending their retirement money.
Most make the mistake of borrowing money on the credit cards that increases their cost for everything they purchase; some at over 20 percent interest rate. If that isn't inflation, I don't know what inflation is.

More and more families, by the thousands, are falling behind in their mortgage payments; they end up renting an apartment at high rents (supply and demand at work), and that's all part of families experiencing inflation now.

The one-time tax rebates of $600 or $300 belongs on the Best of Year Joke List. That's not going to help any one for the long term.

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parados wrote:

Since the majority of food costs do not go for products from the farm, it is hard to blame the increase on ethanol production.

I would look at higher fuel prices for manufacturing and transport before I blamed ethanol when it comes to food.

I would respectfully disagree with you. parados. I agree with xingu. Ethanol has not reduced fuel prices but, because it is produced at the expense of a food crop, the price of corn and other food crops have risen dramatically. And corn is is in a lot of our food. A lot more than we may realize.

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Yeah, and I love corn; especially during the summer months when they're fresh off the vine and so sweet you can eat them without cooking.

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Ouch. The Fed is in a box. The economy continues to slide downward. Consumer confidence is down; consumer spending is down and consumers are heavily in debt. And now we have inflation.

Jobs, employment and unemployment, and average wages are hanging in there. But this in my mind would be the next thing to watch.

I am predicting a 1/2% cut in the Fed rate. Will that help? don't know.

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rjb, It's not about the short-term interest rate that will help our economy; it's about the mortgate and credit card rates that are hurting most middle-class families. Most families who are already in debt does not get any more benefit from a half point drop in the short-term interest rate; it's only psychological for the financial pundits who make a big deal out of it.

We must live in the real world where too many are losing their homes and cars. The only solution is jobs, jobs, jobs, jobs...that pays middle-class wages.

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How about the $2 Trillion senseless war in Iraq causing such a huge drag on the economy of US, not to mention the massive imbalance of trade trend? Hard to create new jobs when no one is buying your products.

Also as a consumer, why would you buy a new house (assuming you could afford it) or even improve your existing house if you feel the fear of job cuts or lack of pay raise?

Notice the huge decline in profits of both Home Depot and Lowe's in the news today?

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More Than You Would Ever Want To Know About Krispy Kreme...

I lived in the south when KK first got going. They sold donuts from company owned stores. They developed quite a loyal following.
Eventually their business plan changed. They didn't sell donuts. They sold franchises to folks who would sell donuts. They made their money off of selling franchises.
They had a strong cachet in the south, and I reckon they convinced folks in the rest of the U.S. and, perhaps, Canada, that they were going to be the next Starbucks. They sold lots of franchises but then, it is alledged, they may have treated those folks badly.
The foray into Canada was indeed a disaster.

Anyway, theire business plan was/is fatally flawed. Anyone, from the Donut Lady on the Corner to Kroger can produce donuts.

Which brings me back to Starbucks. They have had a good run, and they are still expanding overseas. There is a mystique about Starbucks.
But 7-11 and McDonald's are going to erode that, sooner rather than later.

Did I mention that I tasted coffee once? In the Army. I spat it out. Why would anyone drink something so foul?

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Ragman, That's when money was fancy free from rules and regulations to people who couldn't really afford to add more debt to their already heavily burdened balance sheets. Now, most are holding negative equity.

rjb, I saw Starbucks on my recent visit to China, and they had customers at "those" prices. Even when we visited Japan a few years ago, we saw a Starbucks right in front of our hotel in the old section of Kyoto, and they also had customers.

I really haven't figured out what their attraction is, but it must be the coffee! LOL I hate their coffee.

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cicerone imposter wrote:

Ragman, That's when money was fancy free from rules and regulations to people who couldn't really afford to add more debt to their already heavily burdened balance sheets. Now, most are holding negative equity.

rjb, I saw Starbucks on my recent visit to China, and they had customers at "those" prices. Even when we visited Japan a few years ago, we saw a Starbucks right in front of our hotel in the old section of Kyoto, and they also had customers.

I really haven't figured out what their attraction is, but it must be the coffee! LOL I hate their coffee.

Agreed - they burn the beans. In some cases, badly.

It's an image thing. Oh, and their frozen coffee-ish drinks are quite yummy.

Cycloptichorn

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cicerone imposter wrote:

rjb, It's not about the short-term interest rate that will help our economy... The only solution is jobs, jobs, jobs, jobs...that pays middle-class wages.

I truncated your post, C.I. drastically. I probably should have removed the quotation marks.
With regards to the cutting of interest rates, here in my little burg there are, if you were to stack them all up, some 120 stories of major
commercial/residential floors in various stages of the process. All but 15 are now on hold. Most because of financing.
The decline in interest rates will allow some of those projects to go foward.
So while you are right about the failure of mortgage rates or credit card rates to fall, there is some greasing of the wheel.

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STARBUCKS
---------------

on MSNBC-TV there have recently been reports of starbucks running into problems - sales and stock down , i understand .

Quote:

SEATTLE - Starbucks is shutting its doors for three hours Tuesday night, the latest drastic step in a companywide bid to improve its sagging fortunes.

The shutdown is one of several big moves spearheaded by Chairman and Chief Executive Howard Schultz, who recently took back the reins of the company amid concerns that it was losing its edge and facing increased competition from the likes of McDonald's and Dunkin' Donuts.

full story :
STARBUCKS

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rjb, Money is tight because...

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realjohnboy wrote:

Did I mention that I tasted coffee once? In the Army. I spat it out. Why would anyone drink something so foul?

Try it in London sometime, if you think its bad here. You would probably die of shock after one swig.

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Where is the US economy headed?

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