The US economy....Where do YOU think it is headed ?

[Wire-Wheels]

We are into the 4th. quarter of the year. The COLA figures are out. They say S.S.I. will go up 2.8 percent. My question is, what does everyone think the economy will do in the next 6 months ? I know what I think is going to happen, but I will keep that to myself until others add some comments. I am just an old, retire guy myself. ...J.D.

 

[NutmegCT]

What will the economy do in the next six months? The US "economy" in six months, barring unexpected surprises, will be where it is now.

Excellent question! If we can keep on the "economy in six months" topic, without just finding groups to blame, we can learn something here.

There are so many factors involved in "the economy", and that doesn't even take into account what an "economy" is. Galbraith, one of my heroes, saw how huge corporations were determining what people want, and eliminating the small businesses that previously had produced what people want.

Today, for many people, the NYSE reflects "the economy": Majority of stocks go up, the economy is strong; majority go down, the economy is weak. "If my neighbor is out of work, it's a recession. If I'm out of work, it's a depression". DJ up while SP/NYSE go down - the economy is weak. Vice versa - the economy is strong.

So many "indicators" are conjectural, anecdotal, or random guesses. Take a look at how the "unemployment" number is determined. Take a look at how European and Asian economies are fairing, compared to the US.

I've been following "indicators" since the 1970s. Using indicators, I've predicted 12 of the last three recessions (joke ...). A young man asked JP Morgan if the market would go up, or go down. His reply: "The market will fluctuate". “Security Speculation – The Dazzling Adventure,” Laurence H. Sloan, 1927.

The US "economy" in six months, barring unexpected surprises, will be where it is now. Without major existential or regional crises, we tend to have faith in the system; Sisyphus continues to push the boulder up the mountain.

But when we lose faith in the system, and see the system slowly being destroyed, the system itself crumbles, and we plunge into the abyss of broken systems. "Pray for the health of the king [the "system"], for without the king, the people will devour each other."

OK - back to my cave.
TM

 

[Wire-Wheels]

I ask a wide open question. I have to expect a wide range of responses. I do not even care the WHY the economy does what it does. I am not in any position to make any difference anyhow. I just go with the flow and try to keep my old, retired self above water. Certainly not interested in the politics behind this stuff. ...J.D.

 

[waltesefalcon]

In my view I see the economy as slowly dying. I look at inflation and what real value my money has. In my lifetime, I was born in 1980, the value of the dollar has steadily decreased. When I get a pay raise it doesn't make me richer it simply helps me try to maintain where I am wealth wise. On paper I make more money than I ever have, in reality I had more puchasing power ten years ago. At the rate the dollar is currently being devalued it is entirely possibly that I will never be wealthy enough to entirely retire, even with my 403b and my pension.

 

[NutmegCT]

Hi Walt - I see pretty much the same thing. My SS goes up 2.8% next year, but my costs (food, mortgage, insurance, utilities, etc.) have gone up 20% in the last ten months. Ridiculous.

What do you think the economy will do in the next six months?

TM

 

[equiprx]

Hi Walt - I see pretty much the same thing. My SS goes up 2.8% next year, but my costs (food, mortgage, insurance, utilities, etc.) have gone up 20% in the last ten months. Ridiculous.

What do you think the economy will do in the next six months?

TM

My increase is going to be about $20.
Thanks for nothing.

 

[waltesefalcon]

Hi Walt - I see pretty much the same thing. My SS goes up 2.8% next year, but my costs (food, mortgage, insurance, utilities, etc.) have gone up 20% in the last ten months. Ridiculous.

What do you think the economy will do in the next six months?

TM

You remember the Weimar Republic, Tom?

 

[Basil]

It is very difficult to discuss this

Certainly not interested in the politics behind this stuff. ...J.D.

That's good because we don't do politics here (one of the reasons we all get along so well). I do know my IRA is doing very good, especially on recent news that inflation was not as much as had been predicted. The fun part about the economy is the $38 Trillion in debt we have accumulated over many years. Just to give you an appreciaten for that number, here is a video I created several (8) years ago when the debt was "only" just under $20 Trillion. Our debt has nearly doubled since I made this video, but the concept of $1 Trillion is still applicable.

But to your question, what do I think the economy will do in the next 6 months? I guess it depends on what metrics you use, but I do think that the economy will improve (some), driven largely by big tech and investments in AI technologies and infrastructure. I think unemployment will fluctuate somewhere between 4.5% and 3.5%. I think inflation will continue (as it always does), but not at an excessive rate. Combined inflation was over 8% in mid-2022, but has been coming down since and is around 2.9% as of the end of August, which was slightly lower than predicted. I don't think inflation will come down or go up much more than the current rate (maybe +or- 0.5%). I think energy prices will gradually come down, which hopefully will drive some other items down, or at least mitigate increases. This is my prediction without getting into the politics of what I think might drive these metrics.

 

[mikephillips]

Well, we're going to have to make tough decisions soon when it comes to spending and the debt we all won through government. It's everyone's fault and if we don't get a handle on it we risk destroying the value of the dollar and with it all of us rich or poor. Weimar Republic of the 1920s could be indeed what we have to look forward to. Complicate too be the world around us learning already to live without us.

I don't know that things will return and be great or we drive off that cliff over the next few months but we as a country are doing that "Put your fingers in your ears and make the LA-LA sound" over the last few years which doesn't bode well.

 

[DocDup1]

As a retired economics professor, I am most worried about the debt. Today, the country spends three billion of dollars per day on interest payments on the current debt. It is now the second largest item in the federal budget. When we hear that the debt is $37 Trillion, that number is simply too big to comprehend. As an example, one million seconds is 12 days, one billion seconds is 32 years, but one trillion seconds is 31,688 years! The shear size of the debt suggests that we will never pay it off, and that is not really an issue. The problem is that the interest payments can kill us. Every dollar spent on interest is a dollar that we don't have to spend on other things like health care, defense, law enforcement, etc. If we keep printing and spending money at the current rate, the future is not looking good. Just think what else we could do with $3 billion dollars each day.

 

[3798j]

Our debt...

 

[mikephillips]

All factions need to get into the same line when it comes to the debt, working to be careful with spending and finding ways to bring down what we have by any legal means possible. All sides yell about it when not the ones in power and gleefully go find things to spend on when in power. I worry about how life might be for my nieces who are in their 20s as the next decades come and go. And how they and their peers will view us and these last 30 years or so as it spiraled out of control.

We have the ability to get a handle on this and start rolling it back, we all just need the will and desire to do it. And wouldn't hurt if we found a way to get everyone to pass a law that can't be circumvented concerning future debt to avoid rushing right back into the same hole.

 

[Basil]

When we hear that the debt is $37 Trillion, that number is simply too big to comprehend.

That’s why I made that video RE: the debt and how big a Trillion dollars is.
The problem is, everyone talks about the need to cut spending until someone actually does, then the same people lose their “stuff”. De Tocqueville warned us:
“
The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.”

 

[NutmegCT]

That quotation reminds me of Mencken - not de Tocqueville!

 

[DocDup1]

I like the saying that: He who robs Peter to pay Paul can always count on Paul's vote.

 

[Basil]

I like the saying that: He who robs Peter to pay Paul can always count on Paul's vote.

But what about Mary?