Did you know the only reason why we didn't enter an economic crisis earlier was cheaper production?

[Lynx122]

Many governments in the west have been keeping interest rates low and printing money/ taking on debt for decades. Usually the effects of this would have shown way sooner because the currency would get devalued and everything would become more expensive. However the outsourcing of manufacturing and the use of technology has enabled humanity as a whole to produce the same products for cheaper and cheaper prices. So this has balanced out the inflation of the currency and let governments get away with more than they usually could.

This is also one of the reasons why housing has become so expensive because you can't build that in china and ship it, at least not yet. There are more reasons that contributed to this though.

But now we've reached a point where the production cost of goods can't be reduced by much anymore. So the inflation will show up a lot faster than before. Now we actually have to face consequences when governments manage our economy badly.

This is why everything has become more volatile lately because we've reached a point where most decisions are difficult and have negative consequences, the end of a debt cycle.

The next 10- 20 years will be quite difficult for a lot of countries. People will probably try and evade the consequences for as long as possible but that will just make it worse and harder to deal with when it finaly comes. Unless there's some new magical economic phenomenon that bails everybody out it will get rough. There might be unrest and uprisings etc.

What's your view on the economy and how things will progress?

[RebelinSteel]

That is a bit skewed.

keeping inflation low is a standard approach as it hits interest rates which in turn hits mortgages, rents, stifles business.

It is not the building materials that result in high house prices, it’s the land and market forces based on where the house is built and the average house price in that area.

You build a house in Kent, England and the exact same house in Hartlepool England, the materials are the same price, however land and house prices are vastly different.

Then the bit on devaluing, that was last done in 1967, quite a few years. I think it’s only been devalued twice in over a hundred years.

Also this sentence is wrong, ‘Many governments in the west have been keeping interest rates low and printing money’

Printing money is one of the causes of inflation, keeping interest rates low helps combat inflation, where as printing money produces the opposite effect.

Some of the major issues have been the shortage of components, primarily due to move towards electric cars including putting more tech into them, that led to a global component shortage, dramically increased the lead time for products, and increased their prices, that was starting to stabilise. Then we had Russian invasion of Ukraine, this pushed up fuel costs, pushed up fertiliser costs, pushed up grain costs, all that led to increased energy costs and increased food costs.

Then the next big issue is Yemen targeting shipping, this runs the risk of pushing shipping around the Cape Hope route, which pushes up costs, pushes up energy costs.

The other big issues is the water shortage impacting the Panama Canal, this is having a major impact on Liquid Gas and similar products, pushing their price up,

A decent approach is for western countries to remove the majority of manufacturing from non western nations, bite the bullet for price increases, manufacturing will then stabilise with more jobs. You then put manufacturing into countries that are aligned with the west.

(only partially serious about the last paragraph).

[Lynx122]

Keeping interest rates low does not combat inflation it increases it, that's why the fed had to raise interest rates.

[In_Trance]

Firm disagree.
I think the only thing that keeps the economy from collapsing is drug money

[Lynx122]

That's why you're consuming so many? I'd like to thank you personally and also for the whole of humanity.

[In_Trance]

No... no. that's not why. Idgaf about an economic crisis.

[Lynx122]

I'm still grateful :)