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Recession !!!!





WhistleTurning
I have just read an arcticle on the recession and it's causes:-

Quote:
In 2008, an economic recession was suggested by several important indicators of economic downturn.These included high oil prices, which led to both the drastic high food prices (due to a dependence of food production on petroleum, as well as using food crop products such as ethanol and biodiesel as an alternative to petroleum) and global inflation; a substantial credit crisis leading to the drastic bankruptcy of large and well established investment banks as well as commercial banks in various, diverse nations around the world; increased unemployment; and signs of contemporaneous economic downturns in major economies of the world, a global recession.

The major reason was given:-High commodity prices

Medium term crude oil prices, (not adjusted for inflation)The decade of the 2000s saw a commodities boom, in which the prices of primary commodities rose again after the late-twentieth century commodities recession of 1980-2000. But in 2008, the prices of many commodities, notably oil and food, got so high to cause genuine economic damage, threatening stagflation and a reversal of globalisation. In January 2008, oil prices surpassed $100 a barrel for the first time, the first of many price milestones to be passed in the course of the year. By July the price of oil reached as high as $147 a barrel although prices fell soon after.


OK so are we now out of recession, now that the price of oil has dropped back to less than $50 a barrel are we heck. Even the price of petrol needs to be lwoer to reflect the price of crude. Some on some where is making a killing!!!
deanhills
The price of oil is down because of less demand for oil. Industrial activity is much less than it has been before and industry is currently downsizing rather than expanding and increasing stocks of oil. This may change of course as the oil producers are thinking of producing less oil and if they all can be on the same page on this, that may just work to their advantage. So I guess everyone should keep their fingers crossed that Russia will have a greater need for selling its oil at cheaper prices, than to cut its production of oil. That should help to keep the price of the oil down, and perhaps even in a odd way help Russia, as it would be in its interest to have a world economy getting back on its feet, rather than to add a higher price of oil in a very serious recession and increase all the countries' woes.
WhistleTurning
Nice to see in the news that the OPEC countries have had a go at Gorden about the level of taxes the UK have to pay on a litre of petrol. He was told (allegidly) that he should reduce the price of fuel by dropping the highest taxes on petrol in the world rather that ask OPEC to drop their prices.

Will it do any good. NAH soak the motorist has always been a good soap box type of phrase, whether it is wrapped up in green issues or just plain money maker, it is sooo easy to do in the UK.
LumberJack
Politicians are going to have to start increasing taxes or reducing services soon.... government deficits are going to get really big really quickly and it is going to compound the credit crisis even more. Governments competing for credit dollars with the private sector. I shudder to think what is going to happen Sad
deanhills
LumberJack wrote:
Politicians are going to have to start increasing taxes or reducing services soon.... government deficits are going to get really big really quickly and it is going to compound the credit crisis even more. Governments competing for credit dollars with the private sector. I shudder to think what is going to happen Sad


I wonder what is going to happen to credit cards? May soon become so expensive, perhaps impossible to get. Perhaps soon everyone will be on debit cards instead?
LumberJack
I use my Credit Card for most things and then just pay off the balance every month. Debit cards are highly used in Canada, the problem is, what if you don't have any money? Then there is also transaction fees...
deanhills
LumberJack wrote:
I use my Credit Card for most things and then just pay off the balance every month. Debit cards are highly used in Canada, the problem is, what if you don't have any money? Then there is also transaction fees...


True. I'm not an Oprah fan, and landed with one of her shows when I was clicking for lack of anything worthwhile to watch on TV. She had a financial guru with her who kept repeating that we have to stop lying to ourselves, take a grip, and Rule No. 1 has to be, if you do not have money, don't buy anything. Stop buying! Well I guess that goes a little counter with the Government policies everywhere of getting the economy going by spending, so somewhere they will have to make up their minds about this. Laughing
Chinmoy
lets hope for the best.
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