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Most American companies sell their products to the third world. But indigenous companies are mushrooming in third world, and finally a stage will reach that the markets will be saturated and there won't be any space to expand, rather the companies will have to shrink due to lack of business. Again as business are become more technologically efficient, they need less and less human power and the rate of unemployment will increase, and less people will be able afford the products. American economy will collapse sooner or later, what will happen to the world then?
The market will crash and take along with it, all of the IRA's, 401K's and pension plans.
Banks will close their doors, having loaned out a multiple of what they have in reserves.
In short, we will be screwed.
The emerging Asian giants will become more gigantic with the growing middle class there... the Indian and Chinese middle class population are in their infancy in terms of numbers and demographic advantage... there is huge room to grow in the coming years and decades. And there are lots of countries in Asia (like Indonesia, Philippines, Thailand, Sri Lanka, Bangladesh etc. to name a few) where there are enormous opportunities for infrastructure growth. The so called third world is slowly changing to a modern world... we experience it everyday. And that is obvious because new capital will reside there, though miles to go for sure in terms of time to complete the whole process... maybe another century! Some Latin American countries like Brazil will also thrive along with the Asian countries.
And that's the point... developing infrastructure in the developing nations will eat most of the QE money of Bernanke printed in the US... as a rule of Capitalism. Common people of US will not enjoy the benefit of those dollars. People in the third world will enjoy it. So as US continues to collapse (the process is already on) the third world countries will continue to thrive (that process is already on too).
US will be there with a diminishing middle class and high income disparity. Some of the rich people will become more rich and the Govt. will continue to function in corrupt ways to let Capitalism play its game but Capitalism will never die. The name may change, it was known as Imperialism in the past.
A sudden dollar collapse would create global economic turmoil as investors rush to other currencies, such as the euro, or other assets, such as gold or other commodities. Demand for Treasuries would plummet, driving up interest rates. Import prices would skyrocket, causing inflation.
U.S. exports would be dirt cheap, boosting the economy briefly. Unfortunately, uncertainty, inflation and high interest rates would strangle possible business growth. Unemployment would worsen, sending the U.S. back into recession or even creating a depression.
Not to much, we would be nervous as consumers, but the government would pull out whatever stash we have hidden and life would continue with more stress and fear in the atmosphere....
The problem arises only when the number of unemployed increases beyond the employed can support. A market collapse with massive lay offs alone is sufficient to trigger an inverse spiral
Now we have Bernanke intimating QE3 - there road to ruin just gets more and wobbly
The Economy will collapse again and when it does, it will take the "American dollar" with it. Thus, crashing our monetary system.
The question many people refuse to understand is "why?". And, the answer is "government" in effectiveness and inefficiency with regards to handling the Economy. It has forever used a debt system, to create injections for the Economy and directed the injections, into either bad sectors of industry or directly into the pockets of the wealthiest business owners.
The government, by it's own words, do nothing to prevent the slowing periods that happens to the Economy. It only fights to reduce the slowing periods. That is the difference.
in truth, can the Goverment really do anything about those periods. Stimulous programs, and such like that seem to have no affect, and the slowing turns into prolonged time and worsens the situation. I am not sure they have any business interfearing in it, except for the idea of easing the burden on citizens, if they really can. but they are not and have not been very sucessfull at this.
Actually it can, but chooses not to. To do so, is to spend money to make money. But, government is broke. A $14+ Trillion debt speaks volumes about it's debt and that's not accounting other factors, in the totality of America's debt.
It has to borrow money, just to operate. There is no money surplus in America, because politicians and bankers, are too busy playing numbers games with denominations(bills).
That should tell you that they injected the money into the wrong sector of the Economy, to give it a boost. Were they guessing? Seriously...
They spent money poorly. That is the most obvious detail. They should be sufficiently funded for operations and still generate a money surplus.
The best path is spend money on the most vital aspect of the Economy and that is the individual citizens. The citizens need to have the knowledge(education) they require and if government is serious about growth, then it should be done. Very little money is going for education and it's long term effects are dangerous.
There isn't much left of any country-by-country economies. The economy today is a world economy, with different segments concentrated in different regions - but all are interdependent.
If one goes down, we all go down.
Australia and New Zealand are dependant on the USD regaining some strength, and yet Greece could bring down the US economy. This is a dangerous time for all economies including China and India, as these two rely on there internal markets to survive, becoming the new consumers.
America needs to play to it's strengths within it's own people to find a way to refloat the boat and quickly.
I saw a documentary today on an American electrical company that has not laid anyone off in 100 years, pays fantastic salaries and shares profit with employees.
The offer total job security, great salaries and manage to have made a profit all but two years out of 100 years in business.
America needs better managers, ones with vision as it has had in the past, and even now, I believe she will find them in time.
Obama is a good enough president, he just needs to have a decent government to work with, a treasury that is not a bunch of criminals from the aaa toilet paper loans. and a congress that can't be smelled from Australia.
I agree with you regarding the need for better managers and about Obama. I really just hope the Republicans will stop sabotaging his plans and policies. It's very sad that that's what they've been doing since Obama won. They tend to forget that he inherited a great mess from his predecessor. It's as if it's okay for that man to make mistakes, but not Obama. How "self-righteous", eh?
It has been non stop sabotage with no forethought. Looking from outside it is crazy what some of the extremists have been able to put up as "valid" opposition to the incumbent that is little more than thinly disguised racism in many cases no doubt.
Almost beyond comprehension! a disgrace.
Someone once said wisely that a democracy is only strong when it is able to support it's weakest. Australia and most of the free world has had free medicine and medical, dental care for 40 years, and all I here is opposition even to the plan they themselves proposed not so long ago.
Despite all of that, I believe in the bulk of American people and believe that despite the best efforts of the terminally hateful, America will rise again soon ala Ford who have taken the Asians and Europeans on and I believe beaten them on quality, price and value this year. Made in America, at a great profit.
That spirit is still alive and well in the American psyche, and it is way too early to call it's demise in my view.
A new economic giant will emerge, with China leading the pack. Not sure though if American business people will let that happen, though not a few of whom already have investments there. Also, if the US economy collapses, capitalism will go down the drain as well which may lead to modified socio-political system in state market economies.
This has been seen in science fiction movies in the 60's. Actually automation was suppose to kill the worker.
I own a small manufacturing company. While some methods of manufacturing become more efficient some are lost. The computer controled machines cnc's are very efficient in some aspects but in others they are not. Many of the most efficient machines in the world prior to the cnc were much more efficient than todays machines.
Screw machines and turet lathes while some are still used are being replaced by cnc lathes.
Large routers and mills are being replaced by smaller less rigid machines which are no where near as efficient as the old big machines in the amount of material that can processed.
The cncs open up a whole world of new possibilities but at the same time they close down some mass manufacturing.
In a time shorter than we know, we will be reaching wage parity with many countries who are producing wares and goods. Some of the things in the third world will not be able to be produced due to a lack of resources and infrastructure. The development is many years off for many countries.
Times will be tough for many people in the near future. The economy as a machine will not stop. Standards of living may erode but if you have not seen how things are manufactured it is hard to explain why there will always be some sort of production.
For those who want to work, there will be jobs. There will always be industries that support production.
I have lived through many years of industrial change. The thought of no workers is not a new one. Automation long before I was born was thought to replace the worker.
Economies will change also with respect to production moving to less developed countries but the major shift has already happened.
Economies will change and along with globalization we will have to change both as companies and individuals.
I have heard the exact question being asked many years ago. While change occured, the dire warning never materialized.
I suspect it will always be that way.
I never said all works will be shut down due to technological efficiency. My question is if there are not enough consumers(as people can't afford to buy) to buy products, won't more companies get shut down, which will cause more unemployment? When the employed- unemployed balance till to favour the latter, won't the whole economy collapse? We may afford not to buy a TV or car, but we can't afford not to buy food. When the number of hungry people increase and the government not able to feed them(As unemployment increases tax revenue decreases), what will happen to humanity?
There will always be enough work. There may be a point in time when there is more hunger than there is now. I don't know the exact stats but I would guess about 1/3 go hungry often. That will be a problem.
I suspect that this will become worse.
1)However, at best many third world countries have very anemic consumption of our products. Even many developing economies like Mexico and the Philippines, dont use as much of the developed countries products as we would like to think and US products like Colgate just as an example are produced in the consuming country.
2)Most of what we ship to other countries are staples like food. This will continue despite the recesssion. People have to eat.
There will always be enough consumption to support those who want to produce. That is the bottom line. Even if the whole economic system colapses, another one will take its place without fail. People will want stuff and there will be people who can provide it and they will want to make money on their ability to provide it for others.
With all this said, the consumption in the developed world will be more than the workers required in the developed world. Some companies my close but for the most part you have seen the extent of the mass exodus of production. The economy here may be stagnant for the next decade. However, despite this people will consume and so there will be a need for production.
Food will be the most immediate concern for the future. When people can no longer afford the taxes imposed on them, let alone the rent or mortgage, auto loans, credit card payments, student loans, utility bills and numerous other bills, they will stop paying on them and focus on the need for food. The banks and creditors will be unable to foreclose on the massive numbers of people, so they will be able to stay in their homes for sometime without paying but they will need the food. People will stop going to work because they are not getting paid, the grocery stores will not be able to replace its inventory, as there will be no workers to ship or stock the shelves. Even if our money has not become totally worthless, there will be no employees to run the stores. All hell will break lose to likes of which we've never seen. There will be rioting in the streets, looting in the businesses and those who cannot get the food will be robbing others for it! Welcome to the new World.
Not exactly. People have already done this and food wasn't even thought of. People were so screwed up in their minds about their situation, that they actually preferred to be homeless and take handouts from missions and pantries, so they could live. It's already happened and continues to happen.
Unable? What exactly is going to stop them?
Those who have jobs, will continue to work, but will be forced to take pay cuts, because the standard wage won't be able to be paid, due to lack of revenue coming in for the business.
This could happen. I'm not saying it will, but could.
This will happen, but not on a massive scale.
The new world? The total collapse of the American dollar, will actually help reset America's Economy and show how the values(over-inflated already) of products/goods and services are, and will bring them down to a reasonable level.
If the U.S. economy collapses, the people who run the Fed and the other big banks will summon their motherships to take them back to their home planet and leave the rest of us on Earth to die. And as theyre leaving theyre gonna look like this.
there are several state governments that have completely shut down due to lack of money
Minnesota and Conn among them..
I guess if enough shut down then the fed is next
AS a Connecti-nut, I am not aware of our state shutting down.
My niece lives in Minnesota and when it all shut down, they were very scared. they had no more state police or state programs. im not sure whats happened since. do you know anything?
The previous two posts from business people (Ben and Earnest) who are involved knee-deep in the economy are, IMO, more incisive than most that we read.
Bear in mind that the gov't economists and risk rating services gave no warning of the housing collapse, the Enron collapse or the Goldman-Sacks speculation mess.
Listen to the pros, but do your own research and remember that Wall St. is pretty much a stacked deck. The remedy will come from an informed and active public who will demand more honesty and some serious reforms from our leaders.
That is why I am moving to Dubai its economy looks pretty good.
This seems to prove your point: http://gulfnews.com/business/property/u … -1.838548.
Goodluck with your relocation plans. Hope you've also done some research on Dubai's culture - and not just its economy.
In dubia right now there no one living in those expensive condos that they built because of the oil crisis in the middle east. This economic problem effect everything and anywhere.
Without wishing to offend but the great American Dream is based on a ‘ME’ economy driven by greed and selfishness. It scares me that the current generation of people who play with our money, (and I use the word play advisedly) are worse and more driven than those before them. They seem to have little regard for risk or consequence and certainly have no knowledge of history.
Powerful Countries and Economies have come and gone over the centuries only for the next to rise to the top, few if any in the World’s financial markets pay any attention to what is happening around them, the UK still in the grip of a major recession, the Euro Zone fighting to stabilise itself in the wake of weak member states like Eire, Portugal and Greece and the mighty Dollar in crisis.
Wouldn’t it make more sense for someone to shout; “TIME OUT !” So that we could have a rethink ?
We are supposed to have One World Market so why not end the speculation and have a One World currency ? Cut the money speculators off at the knees at a single stroke for starters.
Re evaluate Trade on a level playing field by ensuring everyone gets a fair share in both directions, a market for what they can produce and a means of acquiring what they need in return.
This may seem like some sort of Utopian dream, but one day it will have to happen if we are to survive without the slip sliding ‘Boom and Bust’ world we have created for ourselves.
One thing’s for sure if and when the US economy collapses it will squash once and for all time the stupid Illuminati conspiracy theories that there is a small group that wants complete World domination by controlling the economy !!!
If the US economy collapses then I will finally be able to consider myself rich. Why? Because I've never had money to begin with, so when there is no more for anyone I'll be one of the few who won't miss it. Therefore, I'll be rich and all the current "rich" will be poor.
thats right but i think that it'snt matter for companies only its matter for common man
Maybe we should all be reviewing survival hubs, just in case?
ok, so here in Canada, we are doing alright....but, we are so strongly tied to the american economy, that when they struggle, we do too. BUT, the federal govt has decided to save some money by cutting IT jobs and departments. A lot of people are angry about this (mostly govt IT workers), but from personal experience, I know that there is a lot of wasted money in the federal government IT departments and think its a necessary evil. we will save millions when it is all said and done. the federal govt also wealth shares between provinces to keep the struggling ones on their feet during difficult times. do the United States have similar programs?
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