Off Topic » The 2023 economy...your thoughts?

You guys are all mature, intelligent BMW owners, so it stands to reason you have reasonably good insights into the current state of affairs in the US and elsewhere, economically-speaking.

So...what's your outlook for 2023? This is relevant to our motorcycling habit, because strength or weakness in the economy often dictates the path motorcycle manufacturers take. Recall that in 2008, motorcycle sales took a big hit...

Thanks.

Great question; 6 months ago I was very sure that 2023 would see a heavy recession, now I’m less sure, consumer spending is holding up, employment is strong and vacancies are aplenty. That keeps wage rises moving onwards and inflationary pressures remain. There has to be a painful outcome, but when?
In the meantime, I’ve added a GS to my personal stable ( hence fewer posts here) mainly to accommodate my stiff hip, still prefer the RS in so many ways. The ferry to Spain (Santander) is booked for late April, a trip I’m so looking forward to, along with the arrival of spring.
In the meantime, I’m cutting a few costs where it doesn’t matter in order to continue enjoying a warm home and decent wine - it’s a matter of priorities.
I wish everyone a great 2023 by which I mostly mean a healthy and happy year.

So, once a month here the local supermarket (which has an extensive wine section) has a "wine sale", for 25% off. Also, on the first Thursday of each month they have "senior day", which is another 10% off. Guess when we buy wine?

As for the economy, things look relatively stable at the moment, but I think that's an illusion. The so-called "big money" is steadily divesting themselves of the assets that have made them wealthy in the 10+ years of the Federal Reserve's money-printing era. That era is over, and according to a friend who runs a precious metals hedge fund, the Treasury's funding needs are set to increase, resulting in a further rise in interest rates. Housing is falling sharply (historic drop in pending home sales reported today), which is how most of "middle income" families judge their relative wealth...so the "wealth effect" is another headwind. Add to these factors the risk of "Black Swan" events (Russia/Ukraine, China/Taiwan, etc.) and there are reasons to act conservatively for the near future.

People are living paycheck-to-paycheck (I've read something like 60% of Americans fall in this category) more so now than in the last decade, and they have historically high debt levels. Some even resort to "buy now/pay later" for routine purchases like groceries, according to reports. The consumer is judged to be something like 70% of the economy, so that's another real headwind, going forward.

Sounds pessimistic, but the reality is that we've been living in an artificial environment since 2008, with more money created out of thin air than at any time in history. Economic cycles are like tides, and high tide has passed. As Warren Buffett once said, "When the tide goes out, you find out who's been swimming naked".

Most people think after this year that 2023 HAS to be better. The big surprise would be if it's worse...

As Dennis Miller used to say, "That's just my opinion...I could be wrong"...and the reason for the solicitation of your opinions!

How should I put it? Bad.

We're not talking, "Oh my, we're in a bit of a pickle." We're talking, "Taking it up the dirt road so much that we need adult diapers afterwards."

Both the USA and Europe has been creating money out of thin air long before Covid, and even worse after Covid. The only saving grace is that every western nation is more or less in the same boat...incentivizing nations to work hard to try to keep everything from flying apart.

Key nations like China have been buying up precious metals, rare earth minerals, etc. because they see what's coming and know it will become an economic war of attrition. Other nations are coming together to create a commodity-backed currency...challenging the US dollar and pretty much all other western currencies based on nothing but the promise to accept it as payment for goods and services. The ONLY thing keeping the US dollar afloat is its position as a global reserve currency (chiefly for the sale of oil). Like a live electrical wire, it's not the volts, it's the amperage that gets you. The USD is strong so long as it has that "amperage" or dollars in use as currency. If that drops off, it's like a dead wire. Lots of currency out there but not being used.

We already have massive inflation because of irresponsible economic policies and self-destructive political agendas. Once a major pillar goes down, the others will follow. The economy needs ordinary people buying WANTS and not just NEEDS. Once people can't afford the WANTS, whole sectors of industry will have to lay people off, which impacts subsidiary industries that feed/benefit that industry, which means people not earning money, which means more not spending on WANTS. Government will step in with massive welfare spending, but all that money will have to be borrowed because there is not enough tax revenue to fund it.

I'm quite well off in terms of pensions (RN, OAP and Police - diminishing in that order). I retired at 66, nearly 2/12 years ago. I couldn't afford to replace my from new 2015 1200 with anything like as good a bike and I was concerned with using my only bike on track.

In June I started work again, 3 days a week, low paid stuff.

I now have a track bike! I still can't afford to replace the RS with anything comparable. It is still good to go.

I also run an old motorhome, a Toyota Yaris that my wife mainly uses and bass guitar plus photography 'hobbies'. So I only have myself to blame for my income situation.

I see the UK as a sinking ship. Now that wealth directly creates wealth without any need for labour the polarisation of our economy continues. Popularism stinks and I don't see a way back to some common decency and support for our fellows.

I can't pretend to understand the UK situation, being a US citizen, but it looks to me as though the entire world has gone crazy. Add to that Wessie's comment on retiring baby boomers (I'm one, though I retired early, 16 years ago), and it does appear something has to give. A guy named Harry Dent had put forth a few decades ago the idea that retiring boomers would create a situation of economic decline, simply because once they retire, they decrease their spending on homes, cars and luxuries. I think old Harry was spot-on about that, though he rather tainted his reputation with a number of ill-advised shorter-term market calls that failed to produce the doom he predicted (though much of that can be attributed to the relentless money-printing that began with Bernanke era). The current crop of young people seems more interested in living at home with their parents, smoking dope and playing video games, while collecting unemployment checks for doing nothing, than in buying big houses and cars. Not all of them, mind you, but enough that we know a few who are doing just that.

You can't make the math work on a situation like this. A clean sweep...wiping the slate clean...seems the only way out. Painful? Oh,yes. Necessary? Same answer. Once a building starts to rot, all the paint in the world won't stop the collapse.

Zitat von wessie im Beitrag #8

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[1] for those not familiar with UK prime ministers of the 1980s, look it up as I cannot type her name

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My observation is that prices keep going up for groceries, all types of fuel and construction supplies for DIY projects a lot more than the news media claims. In the U.S. many people are still leaving their jobs, either retiring or looking for a better job that pays more money and doesn't require any manual labor to perform. Meanwhile tens of thousands of people are freezing on our southern border trying to get into the U.S., looking for a better life and to take those jobs that require physical work and then either send the money back home or bring in their relatives to live with them here. I don't know what to call our economy in the U.S. but it does seem strange and likely isn't going to get much better next year. Economists say a recession is on the horizon, but they have been wrong before. I just don't know.

BTW, watching the BBC nightly news it sounds like the UK is going to hell in a hand basket, what with just about every government employee group going on strike. Are they trying to keep up with French workers?

Zitat von BEARR im Beitrag #5

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So, once a month here the local supermarket (which has an extensive wine section) has a "wine sale", for 25% off. Also, on the first Thursday of each month they have "senior day", which is another 10% off. Guess when we buy wine?

As for the economy, things look relatively stable at the moment, but I think that's an illusion. The so-called "big money" is steadily divesting themselves of the assets that have made them wealthy in the 10+ years of the Federal Reserve's money-printing era. That era is over, and according to a friend who runs a precious metals hedge fund, the Treasury's funding needs are set to increase, resulting in a further rise in interest rates. Housing is falling sharply (historic drop in pending home sales reported today), which is how most of "middle income" families judge their relative wealth...so the "wealth effect" is another headwind. Add to these factors the risk of "Black Swan" events (Russia/Ukraine, China/Taiwan, etc.) and there are reasons to act conservatively for the near future.

People are living paycheck-to-paycheck (I've read something like 60% of Americans fall in this category) more so now than in the last decade, and they have historically high debt levels. Some even resort to "buy now/pay later" for routine purchases like groceries, according to reports. The consumer is judged to be something like 70% of the economy, so that's another real headwind, going forward.

Sounds pessimistic, but the reality is that we've been living in an artificial environment since 2008, with more money created out of thin air than at any time in history. Economic cycles are like tides, and high tide has passed. As Warren Buffett once said, "When the tide goes out, you find out who's been swimming naked".

Most people think after this year that 2023 HAS to be better. The big surprise would be if it's worse...

As Dennis Miller used to say, "That's just my opinion...I could be wrong"...and the reason for the solicitation of your opinions!

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Zitat von Valks im Beitrag #13

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Well, coming from someone who's yet to reach 30, is trying to finish building a house, and pooled his chickens into one major hobby/funtime and got an RS, has a vague understanding of economy (graduate) and is in a country whose governmental/finance situations is three steps down from UK/US + had an epic earthquake/epidemic combo.

All the flashiest news usually mean jack s*** and are about as accurate as a 90-day weather forecast with a side dish of clickbait.

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