In Wake of Dubai, Trying to Predict the Next Blowup

**Luv2BeFrugal** · 12-01-2009, 07:04 PM

This article makes me a bit nervous... I've been wondering if we'll have more 'dips' in our recession.

Sounds like we're all in for a bit more of a 'rough ride'???

**Grainlady** · 12-01-2009, 07:51 PM

Some reports I heard on TV said what has happened to Dubai is also what is happening to California. It will be another huge government bail-out that will cause all kinds of economic havoc in the rest of the U.S. We are living in very precarious times.

I live in a farm community and the bad news today from Creighton University professor Ernie Goss, suggests the Midwest is "still in recessions grip" (after a 7-state survey was taken), with the possibility of another "dip" according to an AP story. When farm incomes go down around here, which they have, EVERYONE feels the effect. I can attest to this since hubby just got his second substantial pay cut this year.

Because of the pending economic destruction to our country, the food I am now stockpiling is largely Emergency Foods in #10 cans - mostly freeze-dried foods. When you see oil prices going up, you'll see food prices following, so stay alert folks....

**KeithBC** · 12-01-2009, 08:16 PM

When you think about it, perpetual growth isn't natural. In a stable system, growth is balanced by reduction - that's what stable means.

So, a stable economic system would have as much recession as growth. We ought to get used to it. The longer we force the economy to keep growing, the bigger the crash will be.

**sabrelvssammy** · 12-01-2009, 10:50 PM

face it everyone...inflation is coming-its inevitable...

and brace yourselves for the higher interest rates too...good for CD/bonds/even savings accts....bad for loan rates (adjusting ones anyway).....

**frugalfranny** · 12-01-2009, 11:46 PM

They've already said that they figure next year will be rough too.

It's scary but as long as we don't let up on our frugal ways we should be able to 'weather it'......hang in there!

**shoiji** · 12-02-2009, 02:36 PM

The first thing I thought was "oh great, another thing to blame on the US and we better not bail them out." All very sarcastic. So if the UAE bails them out it would go that oil prices will go up again to help cover the bailout. Lets face it, doesn't matter where you live in this world and who is hurting, but everyone will be affected.

I am still boggled how all these people who you would think would know about investing, especially in a foreign company did not know everything before they invested.

So Grainlady, I think I will take more notice to my stockpile. Because I think the trickle down effect is only just starting for us regular folks. Think I will talk to my downstair neighbor about gardening this spring and summer.

**NcsstyBrdsIngnty** · 12-02-2009, 04:07 PM

This recession definitely put me on the stockpile bandwagon - FV show me the way!

**Luv2BeFrugal** · 12-03-2009, 03:24 PM

Originally Posted by KeithBC

When you think about it, perpetual growth isn't natural. In a stable system, growth is balanced by reduction - that's what stable means.

So, a stable economic system would have as much recession as growth. We ought to get used to it. The longer we force the economy to keep growing, the bigger the crash will be.

This is exactly what I've been wondering about! Like...why do we have to keep getting bigger/spending more/using more resources to be considered "successful"? That just seems wrong...obviously there are only 'so many' resources out there...and we're gonna pay for it soon if we don't learn to use things more wisely. Seems like 'recession' is the only way to keep it all 'balanced'.

If I think about 'mom & pop' stores, they don't get bigger and bigger every year/quarter/etc. And they used to stay open for a couple generations! Everything just seems so out of proportion anymore???

**sinopa27** · 12-04-2009, 02:43 AM

Originally Posted by sabrelvssammy

face it everyone...inflation is coming-its inevitable...

and brace yourselves for the higher interest rates too...good for CD/bonds/even savings accts....bad for loan rates (adjusting ones anyway).....

I need to get out of debt fast!! Loan rates.........My mortgage is an adjustable rate. I got it @ 2.75% and is now at 4.75%
This does give me an idea that I should pay my payment at the rate of 5.75% or 6.75% so it isn't a shock to me. And if it doesn't go up, then I can pay off my mortgage quicker.

**NcsstyBrdsIngnty** · 12-04-2009, 11:50 AM

Originally Posted by sinopa27

I need to get out of debt fast!! Loan rates.........My mortgage is an adjustable rate. I got it @ 2.75% and is now at 4.75%
This does give me an idea that I should pay my payment at the rate of 5.75% or 6.75% so it isn't a shock to me. And if it doesn't go up, then I can pay off my mortgage quicker.

I'm no mortgage expert, nor do I know the terms of your loan, but I do know what my MIL told me when we purchased our home. She sat me down and told me that she (who comes from some wealth) would never have dreamed of a nice home like I have for her first home - because for the ten years surrounding when they purchased in the 80's, during inflation, interest rates were closer to 10% and 11% (Look up Paul Volcker, head of fed in early 80s and Obama's current recovery board, then wiki Federal Fund Rate and look at the graph of the 80's). My suggestion would be to really look into what the cost is to refinance to fixed, vs the likelihood of 8-10% interest rates.

Just a thought anyway.

As far as this being cyclical - that is correct in a free market. When you have the fed determining interest rates and the fed government controlling banks (and who they loan to) we are just going to see artificial recovery. Again, JMHO.