www.byzcath.org Forums General Discussions Town Hall Is America's Economy About To Crash ?

Economics is not one of my strong points, but their seem to be some real tell tale signs of late. This morning the dollar slipped to an all time low against major currencies, Gold prices are the highest they've been since 1979, oil is at an all time high, and heating prices are supposed to be through the roof this coming Winter. Due to financhial difficulties in Chicago, the CTA is planning next week to eliminate 39 routes, lay off 600 employees and increase faires, and every business owner I've spoken with seems to be telling me they are going to have to make significant price hikes after the first of the year.

The situation may be overstated. We may come into a more intense inflationary period, but for an economy to collapse it has to have a "perfect storm" kind of atmosphere.

How much inflation can the economy absorb? Will there be a change of consumer purchasing habits that has a greater effect on the day-to-day economy? Will there be a widespread distrust in the value of the dollar?

The value of the dollar on the international money market affects trade, but it also encourages foreign spending in our country as the value to the foreign investor has increased. I asked one of my economic professors about this a while back and she said for me not to be worried about the value of the Dollar vs. the value of the Euro.

Terry

it might. It might not.

In the end, the question is what effect does the economy crashing have on us as a society and in our lives of faith.

I guess if we're talking Great Depression scale the church would need to organize to take care of its own and others if the resources are available.

Initially I'd say it'd be harder on city folks, but how many country people these days grow their own food? Most of the fields around were I grew up are field corn because of the ethanol subsidies, which I guess could be eaten, just doesn't taste well or have very many nutrients. Also, if gas prices and oil keep going up, how are the farmers going to afford to use their tractors without making food too expensive (oil now over $90)?

Hopefully you have a job that is depression proof...my day job isn't (too fuel dependent), but I could expand my auction business (sad thought of selling other people�s possessions who are down on their luck, but I'd only do it if asked by them (probably not for the bank but never thought about it)).

As far as government and society, it will be like the time of the Great Depression where a problem the government helped cause will be used as an excuse to create an even bigger government, and we'll lose even more of our individual liberties in the name of security. Oh, and speaking of government and farming, check out the following which talks about how rich city folk who own farms as investments are getting our tax money (http://www.startribune.com/535/story/1511649.html). Who can possibly be for this? I know neither conservatives nor liberals would openly support the wealthy getting our tax dollars, but this is never changed for some reason.

Hopefully society would realize that one can be happy or even happier without all the luxuries that we currently have and become less dependent on them.

Me, maybe I'll have my luxury bunker built with my food stockpiles only to emerge for fresh venison, squirrel, and rabbit!

I guess I'd try to move to Russia.

More doom and gloom from BBC about the current oil prices that I thougth relevant:




http://news.bbc.co.uk/2/hi/americas/7070346.stm

Fed injects $41 billion into U.S. financial system to help ease credit problems
http://www.startribune.com/535/story/1522395.html

Stocks plunge in early trading
http://www.startribune.com/535/story/1522187.html

Consumers, battered by housing and credit crunch, slow spending
http://www.startribune.com/535/story/1522149.html

Number of U.S. homes facing foreclosure doubles in third quarter
http://www.startribune.com/535/story/1522099.html

These are short term bumps, they come and go. What I would be worried about is when the baby boomers retire and begin drawing form social security. There may be a significant drop in productivity and their children and their children's children may not be able to fully absorb the cost.

Then if you add the costs of a socialized health care on top of that, then I would be worried.

The credit problem is a consequence of overbuilding and the mass of speculators who bought houses for profit rather than for their end use.

Terry

Here's another interesting story from the London Telegraph

Saudi minister warns of dollar collapse
By Edmund Conway
Last Updated: 1:29am GMT 17/11/2007



The dollar could collapse if Opec officially admits considering changing the pricing of oil into alternative currencies such as the euro, the Saudi Arabian foreign minister has warned.


Will Opec pour oil on troubles?
Prince Saud Al-Faisal was overheard ruling out a proposal from Iran and Venezuela to discuss pricing crude in a private meeting at the oil cartel's conference.


Saudi Arabia's Foreign Minister Prince Saud al-Faisal (right) and Saudi Arabian Oil Minister al-Naim: supportive of the dollar


In an embarrassing blunder at the meeting in Riyadh, ministers' microphones were not cut off during a key closed meeting, and Prince Al-Faisal was heard saying: "My feeling is that the mere mention that the Opec countries are studying the issue of the dollar is itself going to have an impact that endangers the interests of the countries.

"There will be journalists who will seize on this point and we don't want the dollar to collapse instead of doing something good for Opec."

After around 40 minutes press officials cut off the feed, which had been accidentally broadcast to the press room.

Prince Al-Faisal added: "This is not new. We have done this in the past: decide to study something without putting down on paper that we are going to study it so that we avoid any implication that will bring adverse effects on our countries' finances."

Iran and Venezuela have argued that the meeting's final communique should voice concern about the level of the dollar, which has recently fallen to new record lows against the euro. They are pushing for oil to be denominated against a basket of currencies.

advertisementThe greenback also weakened slightly against the pound, although sterling's own recent weakness has pushed it down from $2.10 to $2.0457 during the week.

Nigerian finance minister Shamsuddeen Usman said that Opec could declare in the communique that: "While underlining our concern for the continued depreciation of the dollar and its adverse impact on our revenues, we instruct our finance ministers to study the issue exhaustively and advise us on ways to safeguard the purchasing power of our revenues, of our members' revenues."

Chancellor Alistair Darling will today urge his fellow finance ministers at a major G20 summit to increase investment in oil production and refinement.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/17/cndollar117.xml