Thursday, February 24, 2005

some thoughts on the economy...

One has to consider if US or possibly the world is headed for another
recession. We have:

rising basic materials costs:
Oil is back over $50 a barrel

Both and many other are demand driven rather than uncertantly driven. not-withstanding what happens in the US demand for oil in China is expanding at rates of about 15% per year.

We have automakers seeing serious pressure from commidity prices:

We have other automakers who have finally tapped out the market for oversized fuel consuming SUV's and are begining to resort to the most desperate incentive tactic yet (actually lowering prices) having exhausted the possibilities of 0% financing offers, masssive incentivized options packages, cash back offers, free computers and so forth.

It may be that everyone who want an SUV already has one, or that the
hangover from all the recession era 0% finced suv purchases has already
take hold but the US automakers are headed for some kind of collision
between higher materials costs, oversupply of vehicles and not enough

Japan's economy is likely to rebound in the short term from their brief

But in the absence of the Japanese consumers spanking the plastic which they still seem loath to do, it's exports that are going to hurt particulary if the value of the dollars falls more and us consumers stop buying toyotas...

One supporter of the dollar (probably the 4th largest holder of) in the world currency markets appears to be drying up, or maybe not.

This is all sort of a narrow view which needs more supporting research

No comments: