This graphic says it all really. The poor old middle class consumer is fast becoming a thing of the past. So who will buy all that 'stuff' once what little synthetic credit capacity is left evaporates. Obumacare and non existent retail sales will effectively hobble what remains of the viable SME sector. Throw in the new wave of workplace automation on the horizon and you have a recipe for a surge in unemployment not yet seen.
As margins continue to be squeezed businesses will have no option but to retrench and automate as fast as they can. It will become a vicious circle until it collapses when there just aren't enough consumers left with enough disposable income to support the system.
The burger flipping machine that makes 360 burgers per hr…
For all those wishful thinkers out there that would like to believe that 2014 will be another year of impressive gains think again.
What goes up always comes down and there is every indication things have hit the parabolic top of this trajectory. Plan accordingly.
Freckle she'll be right mate. I've got my exit plan. If all fails declare bankruptcy and make my debt the banks problem.
Better to keep your leverage at a manageable level with a 40% asset contraction (buffer) and preserve your income streams. Crashes don't break people. Too much debt and debt servicing costs do. Address that issue and you ride out the busts and capatilise on the upside once things bottom out.
The world won't end (not for a while anyway) if 40% of people get wiped out and another 30% just survive. Effectively 60% of an economy is still functioning. The name of the game is to be in the 60% that survive.
The Atlanta market is doing very well. My contracting company does a ton of repairs for local real estate agents and houses listed in the north fulton, east cobb & smyrna/vinings area are selling quickly….and closing. Alot of the homes we work on in north fulton are in the $500k to $750k range and the deals are closing….often with financing. Can't tell you about other parts of the country but Atlanta is doing well. Retail chains failing isn't just about the economy as much as it is about service, selection and online sales ripping into them. JC Penny was something 60 years ago….today….no one shops there. The Sears/Kmart combo has had similar problems. It's still a great time to buy in the US….just have a solid plan and a good team. If for some reason things do crash, it will be worldwide and those rightly positioned with rented and performing properties should do just fine. It's anothe reason I love shared housing….it's affordable and it keeps producing revenue!
i dont believe the unemployment will be as bad as you believe. someone has to service these machines, install these machines, and put them out when they catch on fire.haha
The same thing happened when computers were invented, yet here we are still.
I personally cant wait for the day when im sitting at a mates house, drinking beer and monitoring my 20 unmanned aerial vehicles deliver takeaway across australia for an income.
just my 7 bucks worth.
Japan's population decreases by around 200k per year yet their unemployment rate is stable around 4.5%. Australia needs to generate 1040 new jobs per day just to keep up with its net population growth (1.7%)
The problem with computers is that when they were invented they had minimal practical application. Now computing power is just starting to reach a point through miniaturation and processing power that enables a quantitative step towards greater automation. At some point creative destruction reaches a point that overtakes job creation. We are at that point now.
For an example of how your economy will change you need look no further than your rural hinterland. Mechanisation and automation do not produce much in the way of additional agricultural production but it does lower the cost through elimination of manual labor. The number of man hours required to produce x amount has been reduced by 80% over the last 50 years.
Terminator may have been a fictional sci-fi movie but many a true word is spoken in jest as they say. The reality is that we are so smart we are making ourselves redundant.
Worth a read… note that industrialised countries with affordable power generation are potentially the new manufacturing hubs albeit they will be almost totally robotisised and automated.
The Siren Song of the Robot
It may not be the boon we're counting on
by Gregor Macdonald
Tuesday, January 29, 2013, 12:03 PM
Yet the success of American manufacturers has come at a cost. Factories have replaced millions of workers with machines. Even if you know the rough outline of this story, looking at the Bureau of Labor Statistics data is still shocking. A historical chart of U.S. manufacturing employment shows steady growth from the end of the Depression until the early 1980s, when the number of jobs drops a little. Then things stay largely flat until about 1999. After that, the numbers simply collapse. In the 10 years ending in 2009, factories shed workers so fast that they erased almost all the gains of the previous 70 years; roughly one out of every three manufacturing jobs – about 6 million in total – disappeared.
Guy washing wheelie bins from his truck, did not even get out of his cabin once on a 43 degree day. Truck had a lever arm, grabs bin and then a hose comes out and sprays the bin with water and soap. Lever spins bin around and upside down. Done 8 bins in roughly 5 minutes. The lever could even maneuver between obstacles to get to the bin.
My first thought was this thing has put many people out of work.