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So,the UK economy is one huge ponzi scheme is it? I'd say ours is 4X the size,same disease. Maybe it is true after all that people cannot live beyond their means. I had about decided you could.



HERE
Perhaps we could look at the present global financial/economic meltdown as an economic version of the second law of theromodynamics: "you can't get something for nothing".

The UK's economy is now concentrated in the financial industry. What will they have to sell if this industry goes down?

LINK
Quote:The UK, a leading trading power and financial center, is one of the quintet of trillion dollar economies of Western Europe. Over the past two decades, the government has greatly reduced public ownership and contained the growth of social welfare programs. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with less than 2% of the labor force. The UK has large coal, natural gas, and oil resources, but its oil and natural gas reserves are declining and the UK became a net importer of energy in 2005; energy industries now contribute about 4% to GDP. Services, particularly banking, insurance, and business services, account by far for the largest proportion of GDP while industry continues to decline in importance.
JT,

I don't understand a lot of things.

Since I was a kid starting at 12,I've wondered how we get away with what we do. My dad died when I was 12 and an uncle became a role model for me,he was a Goldwater type. He pretty much educated me about free enterprise,taught me to fear the government as Jefferson acolytes would,low tax virtues,stuff like that.

I've never figured out how we could continually live beyond our means w/o paying for it. I knew as a kid that people can't do that permanently,but,it seemed government and nations could at least WE could. It's been like levitation.

Maybe the levitation was ephemeral. I fear the indebtedness of us as individuals and the public might be too much to bear and we'll have to pay terribly for the profligate mentality as a nation.
Palladin Wrote:So,the UK economy is one huge ponzi scheme is it? I'd say ours is 4X the size,same disease. Maybe it is true after all that people cannot live beyond their means. I had about decided you could.

HERE
Yep, it's odd. The "economy shrank by 1.5%". So, why "must families brace themselves for a slump of far greater severity and longevity than the recessions of the 1980s and 1990s, they warned".? I mean, 1.5% less consumption for everybody, who gives a @#$%? Unless they have way more in mind for "families", hinted by the term "far greater severity". Seems as if families must bleed for somebody else whose incomes can keep growing inspite the recesssion.
It's of course always good advice to keep consumption humble and not to throw yourself into debt, in particular not in a time such as this. But why can the government suddenly start to do exactly that, if families can't? Families evidently won't profit from the increased government spending, so who exactly will?

Germany also had a high profile bankruptcy this week, the chipmaker Quasimodo (or so). Never heard about them before. Some 1,500 unemployed. They were a spin off of the chipmaker Infineon (a DAX company, after all), which was a spin-off of the chipmaker Siemens a couple of years back. Infineon stocks sold like hotcakes when Siemens got rid off them, don't know about Quasimodo, that was after my retirement. Never understood why. Why would a giant like Siemens sell it's chip production for any other reason as the expectation that it won't make profits?
Quad,

I admit to not understand much,but anytime any economy has a - sign preceding growth figures,watch out. It's because there are more people,less output.

That says jobs are disappearing. Since,IMO,most Americans and probably lots of British folks are indebt beyond reason,ANY loss of any income becomes a crisis. They will now have to foreclose on the homes they couldn't afford,probably let their Mercedes go that should have been a Nissan,etc,etc,etc.

It's way worse than just subtracting -1.5% of our weekly income.
Palladin Wrote:JT, I don't understand a lot of things.

Since I was a kid starting at 12,I've wondered how we get away with what we do. My dad died when I was 12 and an uncle became a role model for me,he was a Goldwater type. He pretty much educated me about free enterprise,taught me to fear the government as Jefferson acolytes would,low tax virtues,stuff like that.

I've never figured out how we could continually live beyond our means w/o paying for it. I knew as a kid that people can't do that permanently,but,it seemed government and nations could at least WE could. It's been like levitation.

These things baffle me as well, and color me Jeffersonian in the same way.

One of the reasons for the fall of the Roman empire was a huge devaluation of their currency and the necessity to raise taxes to a high level, along with a concomitant micromanagement of their economy. Are we heading that way?
JT,

Stay tuned! Maybe,maybe not!
IMO,
the US ecnomy since ww2 is following sawteeth patern. With the sawteeths growing bigger and bigger by the time...