Recession Fears! - Page 2

Saajan · 18-05-2008, 08:08 PM

Quote:

Originally Posted by Man_

I dont understand that? Despite doing Economics, why is food prices such as rice increasing despite the fact there is BIG asian companys producing vast quantites? Whats happend to this sector? Its quite interesting...

If the price of fuel goes up then everything goes up because you need fuel for transportation.

Saajan · 18-05-2008, 08:11 PM

Also these companies may be producing in vast quantities, but if it's going to cost them a lot of money to move it, then they'll need to add it to their costs which affects the pricing.

**Pete** · 18-05-2008, 10:00 PM

We are in a spiral worldwide. As Saajan says, fuel costs are driving up the cost of everything.

Also the explosive economies of India and China are creating a middle class with money to spend on things never imagined even a decade ago. So they are buying cars and even more fuel. The demand for electricity is also a factor. It is often even more limited in supply that fuel and while construction of dams and generators help spur local economies, they also require more fuel to build.

Virtually everywhere, with some dreadful exceptions, the standard of living for everyone is rising. Not mine, but overall.

As someone old enough to remember the first time the Middle East joined into their cartel and raised the prices to the point that in the US there were odd and even days to buy gas, if you could find any, I can tell you we will survive. (Driving to an out of state funeral during that period is an experience I will never forget.)

I had bought a piece of land on the water just prior to that time and was having a home built. The price of many materials virtually doubled from when I contracted the house and it was complete. The developer I bought it from offered me a sizable profit to not move in, but to sell it to him. Doing do would have resulted in at least a divorce, if not death, as it was my wife's dream house.

Not only did the US and the world survive, but I now own property that has increased by over 6 times it's original cost. The land itself nearly 10 times my cost. This is by an annual appraisal, so while it might be down a bit, it's pretty close.

I'll tell you what I have always done when "times get tight", when the economy takes a downturn. Get ready, I'm about to reveal a golden secret.

Nothing!

Just keep living as always, buy if I can, do without until I do have the money. Yeah, a trip to the store might be made in my wife's VW Bug instead of my Suburban, but we still go where we have always gone, do what we've always done. And eat what we've always eaten.

Ignore it and it will go away......
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**Anthony** · 20-05-2008, 10:51 AM

Quote:

Originally Posted by Pete

I'll tell you what I have always done when "times get tight", when the economy takes a downturn. Get ready, I'm about to reveal a golden secret.

Nothing!

Ignore it and it will go away......

Very interesting theory Pete, most insightful post too.

The dwindling economy gets daily air time, most recently UK property experts stated home sales will fall by 40% because of the credit crunch.

The cost of fuel at the filling up stations is noticeable, without a doubt. I don't notice it so much when buying things at the supermarket though. An exception is Chicken, which is ludicrously priced.

Has this stopped us going about our daily business? Sure prices have increased slightly, but we will keep paying them, right?

**Anthony** · 20-05-2008, 10:56 AM

Here we go. Just browsing today's business news and here's the first bout of the recession talk:

Quote:

The UK is "more exposed" to rising food price rises than its peers, adding to recessionary fears, according to a report by Ernst & Young.

Its Item Club says "the implications for business are profound" - making it more likely firms will raise prices.

Unlike the US which has a balance of food and France which has a surplus, the UK has a trade deficit in food.

World food prices have risen due to population growth and poor climate in the major cereal producing nations.

Another factor is a growth in the production of biofuels, as crops are being turned into energy rather than food for humans, the report states. Increasing wealth in developing nations - especially China - has prompted a higher demand for meat and livestock products.

Read More: http://news.bbc.co.uk/1/hi/business/7408833.stm

Interesting reading for those intrigued by this topic.

**Pete** · 20-05-2008, 11:05 AM

I'm certainly not down to picking up lumps of coal by the railroad tracks.

Everything is up, milk, bread, food in general. They say Wal*Mart and Target, etc. sales are up, while the Marks & Spencer types are down. And it does seem mostly fuel related. They say the corn going into ethanol is raising farm prices, but then they say the cost of corn in a box of corn flakes is 5 cents. It does seem to come down to transportation costs.

A year from now we'll be at another plateau for another decade or so, but in the meantime we'll have to adjust a bit.

If nothing else, George Bush will be history. That's got to be a good thing.
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D M · 20-05-2008, 02:59 PM

The article fails to mention that food prices in April saw its first decline for 15 months. It's not the end of the world just yet!

**Andy777** · 23-05-2008, 10:08 AM

There are several theories on how things will progress...

http://www.lifeaftertheoilcrash.net/

Read this, only if you have strong nerves :-)

Tango34uk · 23-05-2008, 11:30 AM

I have no longer got a car, got rid of it, as my suppliers deliver direct to me, and I can post items out at a post office that is only 5 mins away. Now im glad I did get rid of it, I don't think I could afford to run it with the oil prices the way they are.

FiveStarWholesale · 23-05-2008, 06:05 PM

The main reason behind the current economic situation we now face is also the main reason we in the West have enjoyed cheap prices over the last 15 years..... China.

The Chinese are now becoming richer and desire the kind of lifestyle that we have enjoyed. They now want to drive a big car and have a comfortable lifestyle, which they deserve. The only problem with this is that's 1.1 Billion people who want this type of lifestyle. This increases demand for Oil and Food which increases the price, hence the reason for the current level of Crude and Food.

This isn't temporary either. The Far East arn't going to stop wanting more, they have worked hard for years to get to where they are today, and the consumption levels will grow and China becomes the biggest Super Power in the World.

We need to adjust our lifestyles to fit in with the changes that are taking place, and it's not going to be much fun!