So pitch your theory!

[On Our own]

So basically none of you know either!!!


Seriously, anyone who thinks this is about mortgages hasn't figured out the whole picture yet. I said, to a banker no less, that this is the first time in history that the entire global economy is based by and large on one currency and that one currency is a fiat currency!

He looked at me like I was a really dense child and said, "First time in history?! This currency has been fiat for over 30 years!" He was truly incredulous that I didn't "get" that.

I was incredulous that he didn't "get" that history was a heck of alot longer than 30 years......

I think it is possible that this country can stabilize the economy and the global economy can stabilize for even another 30 years. And, many people are happy with 30 years. To them that is forever and us nutjobs who think it will collapse will be all wrong. But, 30 years is nothing. As I am 45, I remember life for longer than 30 years in the past. And all things being equal I hope to live more than 30 years into the future.....

So, I am sticking to my the whole thing will fall apart belief, but it is entirely possible that it will not happen for another 30 years.

 

[DrakeMaiden]

Of course no one knows what will happen exactly, but it seems like a good bet that things will change.

 

[SKR8PN]

Of course no one knows what will happen exactly, but it seems like a good bet that things will change.

The only thing constant in life, is change.
And you can take THAT to the bank

 

[DrakeMaiden]

Of course no one knows what will happen exactly, but it seems like a good bet that things will change.

The only thing constant in life, is change.
And you can take THAT to the bank

Or put it under the mattress!

 

[unclejoe]

It's funny but people have cut back a lot and that is one of the reason it keeps getting deeper. Most people are buying only essentials. Have you noticed how many restaurants are closed up? Jewelery stores are dying. Wal Mart is the only retailer that's doing okay.If people continue to stay scared and don't start spending again it will become a depression. It's interesting to see what this will turn out like.

This speaks volumes. Commercial real estate is teetering on the edge of a knife. As consumer spending dwindles, more and more shops are closing their doors. When shops close, the owners of the CRE properties can't pay their mortgage. I don't know about other parts of the country, but around here, ads and billboards for office and retail space available are everywhere. With unemployment still on the rise, I don't see how this situation is going to get better any time soon. If the CRE market collapses the way the housing market did/is, I don't see how a full blown depression can be avoided. JMHO

Our whole economy is based on spending. That's why Washington is trying to get the spending going again. Just imagine what would happen if people only bought what they absolutely needed to live on. Only a small portion of our economy is based on supplying essentials, food, water, clothing, electricity, etc. So all the other businesses go out of business. Then the only people that have jobs are those that work in essential businesses. Next thing you know there are masses of people needing food and shelter with no way to pay for it. The same problems are happening in Europe and Asia.

I just found this tidbit on CNN this morning.

http://money.cnn.com/2009/04/10/news/economy/retail_malls/index.htm?postversion=2009041014

 

[FarmerChick]

In the end, the changes will happen. For good or bad....will be interesting to see where we end up in a few years.

Service based companies like tanning spas, even luxury stores like jewelry stores etc....they are hardest hit when money gets tight and people cut back.

But it is also good to weed out so many luxury type stores. If they can survive that is great...but in the end business owners now that their stores are the "luxury" type items people buy and it is a crapshoot if the economy can hold up for them to stay in business.

It is a vicious big circle when it comes to the economy. We all know that.

 

[enjoy the ride]

I read the article the unclejoe linked in his last post- "Strip malls, neighborhood centers and regional malls are losing stores at the fastest pace in at least a decade,"
True but 10 years is not a long time- the specialy shops always fall to poor economies. The fact that a few mall corporations have trouble getting rents is not worrisome or even the shopowners are unemployed- the only thing that is painful is that there are less retail jobs for those who have used this as an easy and continual job source. They always paid poorly but these shops did provide a niche market of short term employment. They usually had jobs available for teens and young people in local communities.
Looking at most malls in most communities- there has been a excess of places to shop for items that are not needed and endup in land fills.
If other sources of employment are developed, IMO most malls are sources of blight anyway. They have short life spands and, unless re-developed constantly, become ugly little bits of crime.

When incomes fall, rents and costs fall too. Unfortunately not simultaneously. There is usually a period of pinch for those who have had their income reduced but eventually, a person who rents has a choice between having unrented, money-losing property or reducing their rents to be affordable.
Food will probably take more of a person's income but, except for people hanging on the edge anyway, not to the point there will be mass starvation. For that to happen would take a wide-spread, catastrophic farming event like floods occuring at the same time as drought with an gasoline imbargo, with etc........... Might happen- not likely at all.

 

[FarmerChick]

mostly when a small niche store closes, you lose family income. most small business employee the family, and maybe a part time person to help wtih hours and such.

so not many suffer, but add up enough of those stores and yup, alot of people are out of work.

but niche stores are a gamble, even in good times everyone knows that....so in bad times anyone opening a luxury type service or product store knows what they are getting into usually.

in good times small stores fail all the time----all this is common sense to business owners

 

[Mackay]

Don't know if anyone mentioned this yet but if malls and small town streets loose shops and rents are not paid then the landlord can end up defaulting on his loans and going into foreclosure unless they can find a new business to occupy the property, which in many areas just isn't going to happen. Some say it is the next shoe to drop for the economy and it will hit very hard.

 

[FarmerChick]

Don't know if anyone mentioned this yet but if malls and small town streets loose shops and rents are not paid then the landlord can end up defaulting on his loans and going into foreclosure unless they can find a new business to occupy the property, which in many areas just isn't going to happen. Some say it is the next shoe to drop for the economy and it will hit very hard.

This shoe is dropping all the time I think.

Many a small town has died. (In town shopping). People haven't truly "shopped" small town shops in decades.

Small town interior shops have been dying and I still see it happening...and with the hard times, seems alot more will sink fast.

Hard times like now just speed up a continuing process.