What will the economy look like in 6 months time?

addaword

Roger the cabin boy wrote: »

Perhaps those in the know, know that that this era of money is truly borked and we are as well just borrowing up as much as we can now as its not going to mean much if a financial reset is afoot.

The Chinese, to whom most western debt is owed, will not reset the debt to zero. Have not doubt about that. They are ruthless.

Wanderer78

addaword wrote:

The Chinese, to whom most western debt is owed, will not reset the debt to zero. Have not doubt about that. They are ruthless.

Most debt comes from financial institutions globally, I seriously doubt it's largely owed to the Chinese, unless you can prove this?

Blueshoe

Wanderer78 wrote: »

Most debt comes from financial institutions globally, I seriously doubt it's largely owed to the Chinese, unless you can prove this?

https://hbr-org.cdn.ampproject.org/v/s/hbr.org/amp/2020/02/how-much-money-does-the-world-owe-china?amp_js_v=a3&amp_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=15901379862192&csi=1&referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s&ampshare=https%3A%2F%2Fhbr.org%2F2020%2F02%2Fhow-much-money-does-the-world-owe-china

It's about 1.5 Trillion owed to the Chinese according to Harvard business review

Wanderer78

Blueshoe wrote:

It's about 1.5 Trillion owed to the Chinese according to Harvard business review

Is this the majority of western debt?

ELM327

Yes, certainly for the US it is.

Wanderer78

ELM327 wrote:

Yes, certainly for the US it is.

Does the figure above include private debts, are is it just public debt?

ELM327

Wanderer78 wrote: »

Does the figure above include private debts, are is it just public debt?

from the link above


" China has become a major global lender, with outstanding claims now exceeding more than 5% of global GDP. Almost all of this lending is official, coming from the government and state-controlled entities."

Wanderer78

ELM327 wrote: »

from the link above


" China has become a major global lender, with outstanding claims now exceeding more than 5% of global GDP. Almost all of this lending is official, coming from the government and state-controlled entities."

so is the majority of global debt in the public domain or private?

Blueshoe

Wanderer78 wrote: »

so is the majority of global debt in the public domain or private?

Read the article. People are answering your questions but you just respond with further questions.

Wanderer78

Blueshoe wrote: »

Read the article. People are answering your questions but you just respond with further questions.

it seems like the article only truly mentions public debt, please correct me if im wrong, there doesnt seem to be much if any mention of private debt, the larger of the two, private debt being the bigger concern globally, and the main cause of the previous crash, and strangely enough, we still havent truly dealt with. theres a good chance the global banking system will wobble again soon, largely due to this overhanging private debt. as defaults and none performing loans increases in the private domain, due to the oncoming downturn, expect the issues of our banking sector to resurface. the large increase in public debt isnt a major concern as governments have the ability to print money via their respected central banks, and can also service these debts via mechanisms such as trade deals etc, being conservative now in regards public debt in a recipe for future disaster. public borrowing now is critical for recovery. i suspect the majority of western debt, in particular private debt, again, which is larger than public debt, is in fact held by largely western financial institutions, i.e. i wouldnt be overly worrying about debt held by countries such as china

Snow Garden

What sector will lead the recovery??

After 2008-2011 it was Tourism, Agri-Food and Multinationals with the help of the Emigration safety valve.

Tourism is ruined.
Agri-Food and Multinationals will be hugely impacted by depressed demands in our major markets.
Emigration is much less of an option due to a global economic crisis.

So what sector will lead the recovery??

Blueshoe

Snow Garden wrote: »

What sector will lead the recovery??

After 2008-2011 it was Tourism, Agri-Food and Multinationals with the help of the Emigration safety valve.

Tourism is ruined.
Agri-Food and Multinationals will be hugely impacted by depressed demands in our major markets.
Emigration is much less of an option due to a global economic crisis.

So what sector will lead the recovery??

Bio pharma. Sales to the Us are already way up

NIMAN

Snow Garden wrote: »

Hertz are now doing a 'Crisis Sale' where you can get the deal of a lifetime...https://www.hertzcarsales.ie/

Even if they say so themselves;)

Some of the savings not that big either.

ELM327

It's 1k off cars that are aging on the showroom floor. Hardly a crisis sale

NIMAN

Wanderer78 wrote: »

Is this the majority of western debt?

So if the West owe trillions to China, who does China owe money to?


The national debt (or government debt) of the People's Republic of China as of May 2020, stands at approximately CN¥ 39 trillion (US$ 5.48 trillion), equivalent to about 48.4% of GDP.

Wanderer78

NIMAN wrote: »

So if the West owe trillions to China, who does China owe money to?


The national debt (or government debt) of the People's Republic of China as of May 2020, stands at approximately CN¥ 39 trillion (US$ 5.48 trillion), equivalent to about 48.4% of GDP.

probably largely to themselves via their own public banking system, but of course they would owe money to other nations as well

McGiver

And we've got touchdown. Euro-bonds are coming, as predicted (shhhh they are just not called "bonds").
It had to happen, the EU would potentially break. It's a very positive move, along with the UK gone, this will push the integration further.

We're going fiscal stimulus full steam ahead, it's going to be a ride.

Also, I hope to see some real competences given to ECDC, that should be the lesson learned from this story.

Blueshoe

McGiver wrote: »

And we've got touchdown. Euro-bonds are coming, as predicted (shhhh they are just not called "bonds").
It had to happen, the EU would potentially break. It's a very positive move, along with the UK gone, this will push the integration further.

We're going fiscal stimulus full steam ahead, it's going to be a ride.

Also, I hope to see some real competences given to ECDC, that should be the lesson learned from this story.

This idea was originally floated by Hungarian billionaire George Soros.

Wanderer78

Blueshoe wrote:

This idea was originally floated by Hungarian billionaire George Soros.

Was it really?

Geuze

McGiver wrote: »

And we've got touchdown. Euro-bonds are coming, as predicted (shhhh they are just not called "bonds").
It had to happen, the EU would potentially break. It's a very positive move, along with the UK gone, this will push the integration further.

We're going fiscal stimulus full steam ahead, it's going to be a ride.

By "eurobonds" are you referring to this plan?

https://www.bbc.com/news/world-europe-52712370

Merkel + Macron 500 bn plan / Recovery fund.

Blueshoe

Wanderer78 wrote: »

Was it really?

Yes.
https://www.project-syndicate.org/commentary/finance-european-union-recovery-with-perpetual-bonds-by-george-soros-2020-04

He wrote the article and all

stephenjmcd

McGiver wrote: »

And we've got touchdown. Euro-bonds are coming, as predicted (shhhh they are just not called "bonds").
It had to happen, the EU would potentially break. It's a very positive move, along with the UK gone, this will push the integration further.

We're going fiscal stimulus full steam ahead, it's going to be a ride.

Also, I hope to see some real competences given to ECDC, that should be the lesson learned from this story.

Link ?? Haven't see anything about the recovery fund being finalised today

Geuze

Blueshoe wrote: »

Yes.
https://www.project-syndicate.org/commentary/finance-european-union-recovery-with-perpetual-bonds-by-george-soros-2020-04

He wrote the article and all

George Soros is proposing perpetual bonds / consols.

See here:

https://voxeu.org/article/using-perpetual-bonds-finance-european-recovery-fund


Did Merkel and Macron suggest that in their plan?

I will check.

Geuze

The Merkel + Macron proposal.

500bn of grants to member-states, not loans.

Borrowed by the European Commission.

Repaid by EU each year, based on member contributions.

So as Ireland is a net contributor to the EU (due to inflated GDP), then we would receive the initial grants, but end up paying back more?

https://www.bundesregierung.de/resource/blob/973812/1753772/414a4b5a1ca91d4f7146eeb2b39ee72b/2020-05-18-deutsch-franzoesischer-erklaerung-eng-data.pdf?download=1




Four-pillar model for reconstruction

https://www.euractiv.com/section/economy-jobs/news/merkel-and-macron-roll-out-e500-billion-covid-19-recovery-initiative/

Geuze

Note that the Merkel+Macron plan is separate from the European Commission proposal.

Zenify

Snow Garden wrote: »

What sector will lead the recovery??

After 2008-2011 it was Tourism, Agri-Food and Multinationals with the help of the Emigration safety valve.

Tourism is ruined.
Agri-Food and Multinationals will be hugely impacted by depressed demands in our major markets.
Emigration is much less of an option due to a global economic crisis.

So what sector will lead the recovery??

Pharmaceuticals?

I know we may have some turbulence in this from the US long term. But short term could we see this helping our economy out?

wassie

I would think so. Trump may have made noise about Phara in Ireland, but he could be gone in 6 months. If so, I would think that longer term, Pharma may actually benefit from increased US investment as it moves to shorten supply chains away from China and the east in general to closer & more trusted partners. There is still a great benefit to be had by having access to the EU.

snotboogie

Zenify wrote: »

Pharmaceuticals?

I know we may have some turbulence in this from the US long term. But short term could we see this helping our economy out?

Even in IT, are we going to see a big downturn? Are the likes of Google, Facebook and Amazon going to struggle?

Zenify

snotboogie wrote: »

Even in IT, are we going to see a big downturn? Are the likes of Google, Facebook and Amazon going to struggle?

Google and Facebook will have more problems in a downturn, they are dependent on the marketing budgets of other companies. Amazon makes money directly from customers so would do better. I dont see any of them being winners in this economic downturn though, if lucky they wont be losers. Not going to pull us up to a recovery.

Could we see something new? I'm seeing lots of skilled Irish workers (IT usually) set up their own business consulting and invoicing for their skills rather than being a direct employee. Lots were even WFH doing this before covid. Could we see lots of small business grow here in skilled consultancy work? Could this be the future, we have always focused on education and skilled workers. This could be our fallback if anything happens to our 12.5% multinationals.

Snow Garden

snotboogie wrote: »

Even in IT, are we going to see a big downturn? Are the likes of Google, Facebook and Amazon going to struggle?

All the large IT services companies are seeing a decreased demand from their large enterprise customers. Demand for software solutions and technical services will continue to decline until the end of year at least. Layoffs have already been announced or projected. IBM announced large layoffs today, believed to be in the 000s.