How long is it going to take for the economy too completely fail ?

Question

me thinks 1-2 years.

Answer 1

Best Answer - Chosen by Asker

The economy of the western world will not collapse. There is no reason for it to do so. The present difficulty is based on a failure of the credit market in USA, and is artificial.

Quite soon, perhaps within 2 years, the multiplier-accelerator effect will kick in when a few firms simply have to replace some capital equipment or engage in refurbishment or some similar fairly small activity. At that point, orders will start to build and economies will take off.

Hyperinflation and/or depression are not likely since there is no shortage of economic resources in western countries. There is a good supply of oil and gas (surplus to current needs), machinery and factory space, skilled labour (surplus to current needs) and so on. The slightest kick in the economy is all it will take and the cycle typically is 4 years from start of orders to substantial recovery.

What will happen in eastern economies is something else. China has labour but not the full range of economic resources to lead the recovery. India lacks discipline in its work force and has a high level of illiteracy and poverty. South East Asia generally is unstable and seems to be looking to the west for assistance, which will not come until later.

So, sit tight. Spend as much as you can afford but not more, and it should start to come right by the summer of 2010.

Source(s):

http://en.wikipedia.org/wiki/Accelerator…
http://en.wikipedia.org/wiki/Multiplier_…

Asker's Rating:

Asker's Comment:

ill die before i pay for the governments mistakes

Answer 2

Nice positive thought. Then what?

Answer 3

If everybody thinks like you, we ARE in trouble, people got to be confident again and the economy will be good again

Answer 4

Chicken littles have always existed. I wonder what they said about the longevity of the U.S. during the Great Depression.

Answer 5

I say 12 to 18 months before hyperinflation kicks in. You can't put 8 trillion dollars into the economy and not expect hyperinflation.

Governments will stop buying our T-bills due to the devaluation of the dollar and that will leave the Fed to just print the money. After a period of hyperinflation I believe the government will try to introduce a new currency to "stabilize" the economy.

Better get out of debt now, buy metals and stock up on food. I'm already there! :)