I am not an economist, neither by profession nor by hobby. I don’t claim to be … Economists are in high demand especially during time what they call recessions. It is one of the professions that appears to be harmless to humanity. In a sense everyone is welcome to offer his or her free (well...mostly) opinions. You can pretend to be intelligent. And since no one is taking you seriously, world is safe! But I do like economics. So here are some of my predictions about the economy in near future.
1. Energy: Global oil markets will likely remain tight through 2008. Crude oil has already crossed $ 100 per barrel psychological mark. It will remain mostly above $ 90 unless supply and demand cycle changes dramatically. That means be ready to pay $ 3.5 to $ 4 per gallon at the gas station.
2. Consumer Debt – At the end of 2007, consumers held over 2.5 trillion dollars in debt not secured against real estate. For example, average household debt is estimated to be 6.34% of annual salary. On the other hand 3 out of 10 have ever been 60 or more days overdue on any credit obligation. Now good credit is always a good sign of economical health of individual as well as the economy but not outstanding debt!
3. Employment: Major issue of concern. Construction employment decreased by 27,000 in January 08 and has fallen by 284,000 in past 12 months. Manufacturing lost 28,000 jobs in January and over 269,000 jobs in the past 12 months. Since reaching a peak in December 2006, employment in financial activities has declined by 99,000. Statistics indicates the future trends.
4. Inflation: Mostly because of higher energy prices. But not a major issue, in my view. Escalating energy and food prices may shake home economics though.
5. Dollar Decline: Dollar is not likely to regain the historic strength in coming years and even may continue downfall. It may worsen energy prices. But I take is as an opportunity. This makes US attractive investment destination and accelerate the influx of foreign capital. On the other hand cheaper US dollar can boost exports and help to regain mostly lost manufacturing industry.
6. Housing: Not likely to improve and conditions may even worsen. Prices will continue falling, inventory will continue rising which will adversely affect construction industry, building material industry, banking sector and the common consumer.
Economy stimulus package: Most of the experts, on both demand and supply side, agree on the one single thing - putting extra dollars in the pockets of tax-payers will have a limited effect. It will mostly help low-end retailer chain such as Wal-Mart and of course the junk manufacturers across the pacific!
Again – I am not an expert, but everything seems so obvious, logical, realistic and horrific.
Next time - world economy outlook … it’s even easier.
1. Energy: Global oil markets will likely remain tight through 2008. Crude oil has already crossed $ 100 per barrel psychological mark. It will remain mostly above $ 90 unless supply and demand cycle changes dramatically. That means be ready to pay $ 3.5 to $ 4 per gallon at the gas station.
2. Consumer Debt – At the end of 2007, consumers held over 2.5 trillion dollars in debt not secured against real estate. For example, average household debt is estimated to be 6.34% of annual salary. On the other hand 3 out of 10 have ever been 60 or more days overdue on any credit obligation. Now good credit is always a good sign of economical health of individual as well as the economy but not outstanding debt!
3. Employment: Major issue of concern. Construction employment decreased by 27,000 in January 08 and has fallen by 284,000 in past 12 months. Manufacturing lost 28,000 jobs in January and over 269,000 jobs in the past 12 months. Since reaching a peak in December 2006, employment in financial activities has declined by 99,000. Statistics indicates the future trends.
4. Inflation: Mostly because of higher energy prices. But not a major issue, in my view. Escalating energy and food prices may shake home economics though.
5. Dollar Decline: Dollar is not likely to regain the historic strength in coming years and even may continue downfall. It may worsen energy prices. But I take is as an opportunity. This makes US attractive investment destination and accelerate the influx of foreign capital. On the other hand cheaper US dollar can boost exports and help to regain mostly lost manufacturing industry.
6. Housing: Not likely to improve and conditions may even worsen. Prices will continue falling, inventory will continue rising which will adversely affect construction industry, building material industry, banking sector and the common consumer.
Economy stimulus package: Most of the experts, on both demand and supply side, agree on the one single thing - putting extra dollars in the pockets of tax-payers will have a limited effect. It will mostly help low-end retailer chain such as Wal-Mart and of course the junk manufacturers across the pacific!
Again – I am not an expert, but everything seems so obvious, logical, realistic and horrific.
Next time - world economy outlook … it’s even easier.
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