From what I have read, the economic recession is a fact of life, a cyclic mechanism. Almost every ten years or so, there is an ‘adjustment’
I came to Canada in 1993, right in time to experience the first recession of my life. I had no idea what did it mean. I realized something was wrong when I could not even get a job as a dishwasher or a cleaning lady. I got my first good job six years after my arrival here. We have seen the value of our propriety decreasing two years in a row, only to bounce back and gain extremely well about 10 years after we purchased it.
We sold it just in time. A year after, the real estate market started spiralling downward and so far it has not reached the rock bottom.
But, going back in time, I don’t have any recollection of a ‘global economic crisis’. Which makes me think that this time it’s worse than anything we have experienced before.
I believe that most companies refrained from firing people before Christmas, hoping that maybe there is going to be a stimulus package to help them out of the trouble. But so far nothing substantial has been announced. I mean nothing beside the help already given to banks- which are the most responsible for the deep shit we are in- and the automakers- which are having insanely salaries.
Not to mention the trades. The guy doing renovation on our house charged us with a whopping $45/hour. We stop the work when we ran dry on finances and we had a slight hope that now, when the recession is in full blast, he is going to reconsider his fee. Unfortunately he did not. The reason ‘the economy is bad, we have to make as much money as we can’ WTF??!!!! I am happy to have a job that pays me $30/hour. How the heck to pay him $45?
I was reading that in the States the manufacturing sector bled jobs at the sharpest rate during January in more than 26 years, shedding 207,000 workers. Construction industries dropped 110,000 jobs and retail firms cut 45,000 people last month. And our trades, here in Canada, still ask for insane money.
Internationally speaking it’s normal to see tensions rising.
China cautioned already incoming Secretary of State Hillary Clinton to handle their ties with care. China is unhappy with the U.S. position with regards to Tibet as well with the support given to Taiwan, seen as closer to reunification to the mainland China in the near future.
At the same time, China’s central bank said U.S. accusations that it was manipulating the yuan currency were misleading. Yeah right! As they have not been doing it for years to stimulate their exports.
With a yuan much undervalued the Chinese exporters have a big advantage, which is to be blamed for U.S. job losses and the U.S. trade deficit, which hit a record $256.3 billion in 2007.
Now the Chinese want to make sure that the U.S. will not apply trade protectionism in an attempt to narrow their trade imbalance and continue importing from China. Considering that China is the biggest lender to the U.S. I guess they have the upper hand.
The next bad thing waiting to happen is called ‘credit card crunch’. And you know why? because people are asked to buy, buy, buy to save the economy by spending money they don’t have, but taking advantage of low interest rate. But wait!
The low- almost zero- interest rate set up by the Central Bank of Canada is by no way matched by what Visa or Master Card charge right now. And just wait to see how tragic is going to be when suddenly the rates will increase sharply.
The banks are in winning situation, like the trades. We got screwed not matter what.