American should save your money

When I suggested these very same points merely weeks ago I was laughed out the ball park! I'm no economist, but it's been on the cards and frankly will massively affect the UK and other countries. The knock on effect could be very serious - just look at Citibank (57% slump) and Northern Rock's $40bn bail out from Bank of England. Actually it's tax payers money costing us individually approximately £750, which is the equivalent of 7mths average council tax or 6% of UK GDP!

 

Yeah, its comming but sadly I think even with all the bad news going on in the USA the actual consumer is blind. Just watching the news is enough to confuse someone on how bad it might get. One financial show had a guy on saying a resession is like the greatest thing ever. :|

Everybody save up but do continue to buy ubisoft games. it will make sure I keep a job.

 

Hooray, sounds like fun.

 

No worries I'm planning on getting Assassin's Creed as soon as get my 360 back...

 

Trying to save up some money from my college loan refunds and put them into a CD account. Save it and forget it, and let that thing grow so that when I do get out of college I'll have some money saved up to pay off my student loans.

Also, one good thing about the career I'm getting into is that there will be more jobs than people to take them, which gives me the advantage compared to computer science majors, and computer engineering majors.

 

Nice crystal ball. The last time I made a bet w/ an economist on what way the dollar/yen would go, I won 5000 yen. Of course I lost way more than that in the actual FX trading. A nice little hedge.

If prices were going to go up, wouldn't you want to buy now?

You're young. Forget CDs. Get a diversified mutual fund.

 

Well getting into that costs money first hand and I'm looking for reliability. I am not aiming to end up with a million-million dollars when I retire. My first step is to put money into a CD and as I have more time on my hands and more money to save then I'll look into other options like roth IRA, and other forms of investing.

 

I'm certainly glad I have a fair amount of coin sitting in a mutual fund to fall back upon when I am older.

 

Would you suggest getting your money changed to another currency? I'm not particuarly good with finances

 

I don't mean to sound overly cynical, but man... is there any institution in this country that isn't going down the crapper? Well, technically the economy isn't an institution, but in a way it is.

 

I call bullshit. If a thing's coming "for sure", no way only "some people in finance" would know this. At that, finance people are not the best source for this kind of information.

 

if it was comming for sure and people knew, there would be an increase in activity.

 

That's the point (hence my crystal ball statement). Nobody fucking EVER knows in economics. If they did, nobody would have jobs. They'd bet all their money on these "sure things" and retire.

Not necessarily. You can buy small amounts, and in economic terms, diversified = reliable. As reliable as real investing gets. A CD is guaranteed, but they traditionally under perform the market average. If you're seriously talking about storing your money until retirement, get into mutual funds. Slightly aggressive now, slow it down as you get older.

 

If the US goes into a recession and the US dollar continues dropping it is going to hurt foreign markets much more than the US market. We're already seeing the first effects of this in the current situation. A recession will only amplify it.

The US markets can generally survive as a self-sustained model with limited to no reliance on imports. The US imports now because foreign goods are cheaper. A US recession will continue to raise the price of foreign goods, driving more captial into the US economy rather than outside it.

This, in turn, will have the effect of lowering the cost of US goods exported so that foreign markets will be enticed to buy more US imports. Net effect is one that the US has been unable to achieve through creative taxation but one that the government has been wanting for awhile.

Because of the self-contained nature of the market the major effects of a US recession would be felt primarily on the high end -- businesses and the upper socio-economic class that travels abroad. The majority of Americans don't leave the country and the US dollar is stable from coast to coast so bringing down the overall market doesn't have a massive impact on "Joe Average."

In short, global markets have much more to fear from a US recession than the US itself.

-hl718

 

hl718: I don't neccessarily disagree that the rest of the world has more (or at least as much) to fear than the US in terms of economic slowdown - however, I'd argue against the line "US markets can generally survive as a self-sustained model with limited to no reliance on imports". The US economy heavily depends on oil imports & additionally many goods once manufactured on US soil are now imported. Whilst a depressed world economy would probably eventually lower the prices of/demand for these imports, the weak dollar makes them more expensive in the near term, which would definately have an adverse effect on the average Joe. All major national economies are essentially interconnected these days - one hurts & the others will too, sooner or later - I don't think the US would really be insulated from this. The US could theoretically be capable of self sufficiency & consequently reap some isolation from from global economic strife, but thats not where it's at now & a transition to this would be quite a painful one.

Aside from that, as GP basically stated - no one ever exactly knows whats really going to happen with global economics. Market movements are often seemingly based on sentiment/confidence, rather than any particular logic/evidence.

Best policy is to always live within your means/never over commit financially & always have some savings to fall back on. Apart from that, you're a passenger. Enjoy the ride!

 

didn't know US made Mercedes and BMWs, or do they?

 

Yeah, well, I'm not necessarily afraid of losing my job or anything, it's just the fact that everything gets that much tighter. The price of everyday necessities goes up (food, gas, rent, etc.) means I get to spend less money on things I want.

Which sucks.