I suppose it is not too controversial to say the US and the world is a-fixing to take an economic slide. How could it be otherwise? Things are going so well, a downturn is inevitable.
I have moved my ready money to a Euro account. Already, the dollar is starting to slip I am overexposed to the US market, but I meet with my broker in December.
Are you battening down your financial hatches? How?
I contend that the economy will stay on course until a correction occurs.
I moved a large portion of my retirement funds into gold funds about two years ago. I’m better for having done it.
The general public in the US doesn’t have a clue that this is happening.
I’m no economist, but
Well, perhaps, but I am playing this game for myself. Selfish self-interest I suppose.
I just do not see how the economy can withstand this rise in oil prices. (Incidentally, I would love to see a chart of recent oil prices expressed in both Euros and US dollars. Perhaps the problem is not really old prices, but dollar value Anyone see anything like that?)
It’s a little of both. I am looking at some data describing the price of Brent Crude Oil in USD and EUR here, and while all both columns show an increase (adjusted for inflation), the increase is most dramatic in the column for USD.
In 2007-dollars it appears that the oil price is approaching 1980-levels, but has yet to reach it ($95 seems to be the magic number in the data I am looking at here, I have seem numbers between $90 and $98 elsewhere)
I am not an economist, nor do I work with oil prices at a daily basis, so don’t base any decisions on this post, check with someone who is supposed to know these things. 
Paul - I sold almost everything in July before bernake decided to give the markets a free put.
I’d say people are in major denial. The sub prime problem is at least 2x bigger than the S&L. American’s don’t really have savings. The Fed has done major misteps starting with Greenie jumping the shark over not popping the high tech bubble, then staving off recession by allowing the US to piss away mortgage equity.
One thing a lot of people fail to realize is that the price of oil goes up as the dollar goes down. The US devaluing the dollar is going to be painful rather than the quick fix that a lot of people are looking for.
I’d say we are in for a helluva mess and within months.
I’m UK based and I’m pretty certain there’s a recession coming. I haven’t made any major changes: put off some purchases, made sure my savings are protected, and moved to permanent employment rather than staying a freelance.
We’ve had a run on a bank (Northern Rock), and rises in interest rates. With the debt level as high as it is, that’s going to affect a lot of people adversely. I don’t see how we can avoid a recession in the next few years - its just a case of how bad it will be.
You probably wound up buying euros near their peak against the dollar. You really think there’s a lot more downside to US currency? You should have bought euros 5 years ago when Warren Buffet did. He’s made billions off it (after he initially lost a ton and people thought he had lost his touch).
I doubt USD goes much lower. Europeans are already worried about the Euro’s value against the USD. There’s no way the Fed can cut rates again into $90 a barrel oil, or $800 gold (whatever it is).
I could see a recession though. I was reading the other day that some economist calculated that a 1 decrease in the value of people's houses decreased their spending by .06.
And, we’re not even near the bottom of the housing. Not even near it. Trillions are going to be trimmed.
For me, I’ll just keep some cash sitting around and try to snag some bargains in the stock market if things really drop.
I put it all in zinc.
I might be willing to spring for a couple of tons.
I got out of the advertising business and took a government job. Recessions don’t scare me anymore.
I used my savings as a down payment on a new home a little over a year ago. Now I have no savings and my house is worth much less than I owe.
I’m fucked.
I’m in a pretty recession-proof job–I am a professor at a highly selective liberal arts college. No matter how bad things get, they will be able to fill their freshman class with paying customers. I will continue to get paid. Hell, I’ll probably continue to get my 2.5% annual pay increase. As for my retirement fund–I’m 35; whatever recession we go in will go away by the time I retire, so as long as I don’t do something stupid like panic and sell at the bottom of the slump (thereby taking a big loss), the value of my fund will recover before I need it.
No debt, no mortgage (I rent), no car, no savings. I’m working on the savings. Fortunately, the Canadian dollar has gone up relative to the US dollar (some of this is the US dollar going down, some isn’t), so certain items I’m looking at buying are cheaper. OTOH, the value of my RRSP would have gone down if I hadn’t been contributing to it. 
So I’m not in great shape, but I’m a lot better off tham many folk.
If Asia keeps going well and currencies here keep appreciating against the US dollar, I may be able to pay off my student loans a little earlier.
Maybe in a couple of years I can work in investment advisory for all the Chinese companies coming in to buy up once proud American firms.
The missus and I both work in healthcare. While not recession-proof, people are going to go right on getting sick even when the economy slides. Sure, a recession will affect healthcare spending, and people who lose their jobs and health insurance will put off all but emergency care, but as far as industries go, it’s not a bad place to be. We’re young enough that we’ll just have to grit our teeth and watch our investments lose value in the short term, knowing that we’re going to go through a few more of these before we retire. I’m a little worried about the house losing value. We’d planned to sell in 2009. I guess we’ll burn that bridge when we get there.
I couldn’t have done it without youse guys.
Recessions tend to spaced out by a few years. There were 32 recessions in the US between 1854 and 2001. Predicting we will have one in the next few years is kinda like predicting there will be an earthquake with a death toll in the thousands somewhere in the next few years. Not that you’re wrong. I’m just sayin’.
A few problems with this.
One: Chinese currency isn’t allowed to float freely so it can’t significantly appreciate vs. the dollar. Also, Until Chinese money is allowed to float few people will want it in the west so investors would have to use dollars, euros or something to buy once-proud US companies.
Two: Places like China rely very heavily on exports to keep their economies going. If the US goes into recession, the Chinese economy will take a big hit as well.
I also fail to see how buying euros protects a person from recession. It just means your betting on the euro to rise in value. It’s already really high. The best way to gird against recession is to avoid unnecessary expenditures and look after your savings. Of course, if everyone does that it could help bring on a recession.
Well, here’s one way it might: