cricket1again

I have one simple philosophy and I've had it all my life and managed to stay afloat in business. This is that all activities born out of greed will eventually be exposed and sink. That's what this current credit crunch is about.
We are a small company producing a quality product. The customer gets it at a fair price (made in Australia) and we make a fair profit.

I honestly think we'll see a lot of businesses collapse especially if they are relying on goods from China, but if there was ever an opportunity for entreprenurial enterprise to kickstart home manufacturing, it's staring us in the face right now both in Australia and the UK.
I never believed the ideal that manufacturing had gone to China because England was too expensive. I was a producer back then and by settling for a smaller profit, we could always compete
People wanted cheap manufacturing and much higher profits. It's coming back to haunt them now.

Fleaflyfloflum

Can i just say before I go on, how much I am enjoying this thread. Many different opinions and philosophies.

I have a question.

The words disaster, catastrophe, armaggedon and such like, are being bandied about by all of us when describing the possible outcome of all this.
But what exactly WILL happen to us all in Britain if the £ collapses, and the country goes bankrupt?

I'm not being facetious, its a serious question. I think we ought to delve into this a bit more. We are all using the above words to describe the situation without actually knowing the precise consequences of it.

There are 60+ million people in UK.

Yes, there will be job losses, but will people starve because the government has no money left?

People wont be able to pay their mortgages, but if so many people will be out of work, and the banks and government are bankrupt, will people be flung on the streets to live?

There will be some jobs left. Medical staff would still be needed. BUT, if the country is bankrupt will there be? No way of paying for medical supplies!
A bit far fetched I know, but what actual disasters and catastrophes are we talking about?



I think i will be interesting to explore this.

cricket1again

I don't think the UK will go bankrupt but it seems it will have to borrow heavily to stay afloat. This means that our kids are going to be paying the debt off for a long time so the UK's quality of life could mean all work and not much of a lifestyle. There will be cut backs to all the main services like health and education. The implications are difficult to imagine at this stage.
It's main industry now is service and information so maybe there is scope for the UK to seriously start thinking about manufacturing again. I could take my business home tomorrow, employ people and as long as I am happy to take a smaller profit, it would work. It's just a case of getting the timing right.
I honestly think the UK press is doing most of the damage to the economy. This will be creating an oppressive mood amongst the population and what for? To score political points.

I don't see this kind of self sabotage here in Australia. They all seem to be steering in the same direction.

Fleaflyfloflum

But who would they borrow from?

cricket1again

The IMF probably. It's not just the government who are to blame. The UK is now a consumer based economy. It was ludicrous to ever get rid of the manufacturing sector in favour of cheap imports from China & India.
Anyone who has opted into the spend now, buy later culture is going to have to pay back any borrowing. This means a large percentage of the British public are equally as liable for any borrowing and debt as the government. You can't have it good for so long during a boom, then complain during a bust because if you spent more than you earned, you helped create the problem so now you have to be part of the solution.

Not referring to you personally of course.

As they say, there is no such thing as a free lunch.

Fleaflyfloflum

Now theres a good point. The IMF. Just how much money do they have and where would we be in the queue?

I agree that UK needs to change. I also agree that we should be concentrating more on making our own stuff and employing UK based people to work there.
Just look at the outrageous policy of dumping UK workers in favour of Indian call centre staff. All fuelled once again buy large corporate greed with no thought for the community they are leeching from.

Maybe we should change the whole banking structure too. Not really sure to what, but more a credit union type setup.
Stuff the greedy banks.
I know this all sounds a bit outlandish, but if you really think hard about it, there might be some worth in it.

Or should we become a communist state?

cricket1again

It will all come good, there was so much corruption and exploitation that it had to happen. I'm not really worried, it's just trying to plan a direction that's the frustrating part.

Globalcommunismiscoming

The IMF cannot afford to bailout all the economies in trouble with its 200 billion dollars worth of reserve. The IMF will have to resort to printing SDR's (what they call paper gold). Inflation everywhere will get completely out of control in the next few years as fiat currency is diluted. <<snip>>the problem is global but that doesnt change the severity of the situation.

babycart

I don't think it will be as simplistic as some countries will avoid recession & some won't. As this is a global phenomenon it becomes a question of which country will fare worse than another.

Economists suggest that the UK will suffer more than other countries, but that doesn't mean that there will be mass starvation on the streets. What is interesting is the idea that there we are heading for social unrest. There are two interesting articles recently which have addressed this issue from really two extremes of perspective.

The first is the statement from Strauss-Kahn IMF Chief, "violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite....social unrest may happen in many countries - including advanced economies.

http://www.guardian.co.uk/business/2...nancial-crisis

The second is a witty article by Jeremy Clarkson, which makes some outlandish statements on what could happen, but under the sarcasm there may be uneasy truth which might just play itself out.

... I can see the day when I will have to shoot some of my neighbours - maybe even David Cameron - as we fight for the last bar of Fry’s Turkish Delight in the smoking ruin that was Chipping Norton’s post office.

http://www.timesonline.co.uk/tol/dri...cle5292547.ece

Globalcommunismiscoming

I would be sad if there were no unrest. But I guess it would show how apathetic and spineless the British have become. The destruction of the UK economy has not been from incompetence. It has been completely criminal. For those who doubt this is possible, you just have to look at the South Sea bubble in the 1700's to see how something like this plays out - the criminals dont get punished.

cricket1again

I think what is likely to happen is that some people will use the current crisis as an excuse to cause unrest and as such will bring other agendas to the fore such as any grievances they may hold for whatever reason.
That's the danger for the UK because there is already civil unrest of a kind on so many fronts, not necessarily financial but on issues of crime, immigration, taxation and the governments handling of the situation not to mention their apparant blase attitude towards borrowing so much money.
I do not believe we will see crowds on the streets in any kind of violent protest but we all should take some responsibility towards not pre empting such an event by suggesting it could happen and therefore placing the idea in a handful of rebels minds. Road rage didn't exist until someone gave it a name.

Danny B

Same as what has happened in Zimbabwe, 231 million % inflation rate, millions homeless, no health care, corrupt government and general anarchy on the streets.

Bevm

Various things could happen. Wild inflation is one possibility and not just in the UK. That would mean that a cup of coffee would cost hundreds of devalued dollars. People actually working would be paid in inflated dollars, but it wipes out savings. Sure, someone still has 10,000 whatevers in their savings, but that now buys the week's groceries and then it's gone.

It's happened, so could. Zimbawbe is a particularly awful case, but a dinner out there costs in the billions. They have billion dollar notes for everyday purchases.

Deflation isn't as dramatic, but wages and prices drop, industries fail, higher unemployment, lower government revenue so fewer services and little repair of roads etc. Sort of slow decay.

Of course with any severe debt problems taxes go up and up.

But the thing is, life goes on for most people. It did in the big depression. It is, just about, in Zimbabwe. It's just down to the essentials for most people, and if they're lucky, more community connections as people share, help out, and support one another.

Some say that if we think time's going to be really tough we need to find a real community to live in and be prepared to be part of it.

Bev

cricket1again

We can scare ourselves with all kinds of various scenarios and possibilities. Isn't it funny how we always consider the worst case and not the best case??
This financial meltdown could have been so much worse yet although it's bad, we are not seeing anything remotely as bad as the 3 day working week, dole queues going on forever, whole towns coming to a standstill when mines have closed and this wasn't that long ago.
I remember when there was a lorry driver strike and deliveries of essentials couldn't get through. People thought they were going to starve and at least in two shops that I was stood in, there were situations of irrational panic because there was no bread.
It was ludicrous. I think we all need to have faith and stay calm. We're not in Zimbabwe, we're not of the same culture and we're not facing the same kind of corruption.

Danny B

It's amazing how much that country has declined in the last 9years..