Recession appears : LUSENET : TimeBomb 2000 (Y2000) : One Thread

I just reread Bruce Beach's posting on OIL, etc. Splendid article. I just want to add my comments about the current economic situation. It appears that we are suffering from the ill effects of Y2K. It will never be known for at least 50 years from now because nobody will ever admit the problems exist. The truth will show up on the A&E channel.

This is exactly how the last recession started. Only last time they needed a reason to cause a shortage. Knocked out Iran. I had a relative who was an executive at an oil company. They needed to reduce the the oil by 5% in order to increase the cost of gasoline. Understand it was the same price since the 50's. The FEDS had changed IRS ruling towards the OIL companies that a well drilled that was flat could not be written off. It cut into profits, so Iran was chosen.

This time the reason was handed to them. Last time the price of a gallon was .38, peaked at 1.59, settled at 1.09, (understand the tankers were in the Atlantic loaded with fuel while we waited in line for gas) now at 1.39 will probably peak at 3.75 then settle back down to 2.75. The heads will be telling you how lucky you are to buy gas for that price. The last time people said if gas hits a dollar a gallon there will be a revolution. (Full stomachs)

Meanwhile shortages will develop. They did the last time. Some shortages were real some were artificial. Any of you remember the price of sugar the last time?? People were paying $7.00 for a 5 pound bag. An earlier posting mentioned the mortage rates at 9%. On that response I stated that they went to 18.5%. As was replied to that post the housing values dropped and people simply walked away from it all. (This was a very grave concern in Texas).

This is the start of a very ugly situation. The truckers are only the beginning (truckers are not the problem, the first to be seriously affected). The last recession virtually elimated the manufacturing sector of our economy. In Pittsburgh I believe in one day thousands of people lost their jobs in the mills. Understand, manufacturing requires large amounts of capital to operate it, so that when a product is completed and sent to the buyer it maybe 2 years, such as a bridge or tranformer. When the labor costs skyrocketed the order was already placed with the costs, thereby locking in the manufacturer. Inflation rising 13% yearly. I was receiving 10% raises per year with a 6% Xmas bonus and it was not enough.

Money market funs were tax exempt paying 18%. I was working as a computer programmer for a company that retailed shoes and wholesale of safety shoes. In a matter of 90 days the company lost 2 million on the lost sales of the safety shoes to the mills, and the retail operation suffered terribly. At that time the company usually made 7%profit on their operations and it was a great year. But when the inflation hit they sold the company to an English firm for 50 million put the money in the money market funds, closed 150 retail operations and 12 mobile units. Over 800 people were displaced. In 90 days.

Some notable items: In the 70's I could do minor work on my auto, tried to save money, todays auto, (yea right). It is difficult to get at an oil filter.

Remember the Heating Credit? If you insolated you home you got a tax credit? Also remember how high the cost of insulation went? 5 fold.

Remember the tax credit for purchases made over $100. You could write off the sales tax. They disallowed it because heating costs went over $100 per month for a large number of people.

I watched the elderly suffer because their pensions did not have cost of living allowances. This was the real beginning of skyrocking divorce rates (young two income families could not afford it).

We would go 3 weeks into any given month and we were broke, ended up with large consumer debts with credit cards. No choice with kids.

The IRA was developed at this time to get people to put money into long term savings accounts, why not the banks would (fractional banking) loan it out at 18-21%. We were not given the IRA for our benefit.

As a kid growing up in the 50's I remember my grandparents talking about the depression. My dad's best friend lived on a farm, there was money owed to a bank on the mortgage. When the banks collapsed they were notified that their mortgage was called in, they had some money in a savings account, but received only .10/dollar. Lost the farm, had to live in an ajacant house (rent free) if they would work the farm. That would make you feel good.

My grandmother lost her entire savings, not much by todays standards.

One thing that separated that time from today, the majority of the people grew a considerable amount of their food. Do they today? Do they know how to even can?


Japan will throw the worlds economy into the tail spin. (it already appears to be happening) America will be blamed, espically by Europe. It was American Bankers and government that advised Japan on how to correct their problems.

Long paralyzing strikes for Higher wages, will cause Shortages.

The fallout of the last recession was emergence of the info age and the service community. This will be what gets hit hard this time, retail sales will fall, causing further unemployment.

Credit card debt is out of control, more problems for the average family. Debt load will become unbearable.

Low income/unemployed will take to the streets. As more people turn to the government for assistance, the resources will dry up.

Turn on the evening news, if a Republican was in the White House, it would be recession/inflation, recession/inflation, but we don't hear any of this do we.

Fir those of you with your preps, you can smile. I wait for rebuttals.


-- bobby knight (rknight@nb.netb), February 27, 2000


Right now, here in Cali-fornia, we're paying $1.65-$1.95/gallon, same as we did last summer when our refineries exploded. And the "back east media" didn't even shed a tear for us (sob).

You think we're heading to $3.00/gallon? Damm, that's going to really f@ck things up bad. I hope we can keep it at around $2.00/gallon.

Last nite, reruns on CSPAN of thursday's oil crisis senate hearings, one of the senators mentioned US refinery supply is down 17%, demand is up. Do you think that -17% has "anything" at all to do with Y2K embedded-chip related failures...or just a coincidence?

-- INever (, February 27, 2000.

There's still technically time enough to prepare for a recession, if it's unavoidable.

Get of of (non-mortgage) debt.

If we run up an even bigger, you'll have more purchasing power.

As much as I doubt that TPTB would allow another global recession/depression, the writing on the wall would suggest that the factors that may take us there are too ********systemic: not responding to band-aid treatments***** to contain by organizing all the big-money dudes - a la LTCM - to run interference.

--Got the ability to take a pay cut?

-- lisa (, February 27, 2000.

No rebuttals from me. well thought out. thanks.

Lisa is right-get out of debt. Do anything you can to be able to deal with inflation in prices at the same wages.

DO NOT STOP GIVING. TITHE. BE GENEROUS. In times like these it is easy to turn inward. Be a giver, and someday you will reap what you sow. God will be merciful to those who have shown mercy.

-- hard (times@coming.soon), February 27, 2000.

Bobby Knight,

A very nicely thought-out analysis (a rarity around here these days.) Thanks for putting it up. I am somewhat gun-shy about predictions lately, but your pieces do seem to fit the puzzle.,

It is goddamned good to see you here (or anywhere.) It has taken me some time to adjust to life without my beloved community. It is not to be found here on this fourm. I have missed you, your quick wit, and your real-life analysis. I am still waiting for these new forum "regulars" to make me laugh the way you used to. Let us see more of you.

Your pal, semper

-- semper paratus (still_here_with@my.pals), February 27, 2000.

Semper, I so miss you, too....(how again you say 'always broke'?)

The great hope (for me) was that none of us would need to come here for economic analysis...

Been taking a break for last couple months, revelling in ::no immediate problems:: plus hot-rodding my 'new' '65 Mustang.

Still doing financial prep, though... and expect the snowball to hit us too soon.

Hope I'm wrong.... but doesn't smell as if I am.

-- lisa (, February 27, 2000.

Hey Bobby throw any chairs lately ;-)

What stands out in my mind is the ignorance. Book on cycles that a read (Prechter???) pointed out that a memory takes three generations to disappear. I can remember how tough the 70's were for Midwestern manufacturing but only know the depression from books. Many don't even know that much, gotta go sick child...

-- Squid (, February 27, 2000.

What do you think will happen to the price of gold during all of this?

Thankyou, nancy

-- NH (, February 28, 2000.

Glad I'm outta debt and liquid :-)

-- Tim (, February 28, 2000.

Bobby knight,

How long in weeks or months do you think it will be before the recession causes the big layoffs to start. Every one says that the job market is booming right now how long until it isn't and you best stay where you are to ride it out or something.

Thanks for the good post.


-- Obo (, February 28, 2000.

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