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How to survive a zombie economy
Old 08-26-2010, 12:15 AM   #1
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How to survive a zombie economy

How To Survive a 'Zombie Economy' - Rick Newman (usnews.com)

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But there are ways to ride the zombie, and Japan has shown us how. With interest rates painfully low and stocks volatile, investors should look for dividend-paying stocks and high-quality bonds. Consumers should keep paying down debt and resist any additional debt if possible. Tempting as it might be to replace an aging car or out-of-style appliance, it's okay to wait. Prices are unlikely to rise by much, and might even fall. Home prices in particular seem likely to keep falling, at least into 2011. And lenders might become more permissive over the next year or two, as they slowly improve their own financial health.

Job seekers should develop every new skill they can, since employers these days are looking for people with two or even three distinct skill sets. Even if the U.S. experience amounts to Japan Lite, the job market will stay tough. People need to go where the jobs are and prove why they're worth investing in during slack times. It doesn't hurt to have a secondary source of income, since raises are likely to be scarce.
Nothing new, just keep your head down and your powder dry.
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Old 08-26-2010, 12:25 AM   #2
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Good article. Thanks for posting the link.

So what countries economies are doing the best right now? Maybe international investments are something to look at if the article author is correct and the U.S. economy will be going nowhere fast for the next few years.
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Old 08-26-2010, 01:01 AM   #3
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I read the title "Zombie economy" and thought, yeah, better stock up on brains, since that's what zombies like to eat, right?

But, what would zombies use for currency? Barter?
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Old 08-26-2010, 07:38 AM   #4
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Actually, Canada is doing pretty well right now. Their housing market did not collapse quite as bad as ours (but I still think it is a bubble).

My equities have always been 50/50 US/foreign. It has worked out well for me.

(I am also working in Canada while DW works in the US. More diversification. )
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Old 08-26-2010, 08:48 AM   #5
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I've had a large portion of my investments in foreign as well and was thinking of pulling back, but maybe I'll keep some there for the time being.
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Old 08-26-2010, 09:09 AM   #6
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With interest rates painfully low and stocks volatile, investors should look for dividend-paying stocks and high-quality bonds. Consumers should keep paying down debt and resist any additional debt if possible. Tempting as it might be to replace an aging car or out-of-style appliance, it's okay to wait. Prices are unlikely to rise by much, and might even fall. Home prices in particular seem likely to keep falling, at least into 2011. And lenders might become more permissive over the next year or two, as they slowly improve their own financial health.
This is the scary part. It seems great because things will get cheaper, but OTOH such situation puts further pressure on wages...Deflation is as scary as high inflation.
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Old 08-26-2010, 10:15 AM   #7
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Originally Posted by Ed_The_Gypsy View Post
Actually, Canada is doing pretty well right now. Their housing market did not collapse quite as bad as ours (but I still think it is a bubble).

My equities have always been 50/50 US/foreign. It has worked out well for me.

(I am also working in Canada while DW works in the US. More diversification. )
Canada is/will be a good investment in the future - commodities and a responsible government.
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Old 08-26-2010, 10:17 AM   #8
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http://www.thezombiechronicles.com/
Soon to be a movie - I like zombie stories - not the fast zombies; that is just stupid - how can you be faster in death than in life, crazy.
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Old 08-26-2010, 10:17 AM   #9
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This is the scary part. It seems great because things will get cheaper, but OTOH such situation puts further pressure on wages...Deflation is as scary as high inflation.
What's even worse is deflation in asset values and wages and inflation in the items of necessity like food, energy and health care. And unfortunately, that's what we have today, the mother of all double whammies.

In other words, "everything I own is declining in price and everything I consume is rising in price." Not a good combination at all.
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Old 08-26-2010, 11:41 AM   #10
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I thought this would be a thread about which ammo to use on zombies and the best price to buy it at.
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Old 08-26-2010, 01:47 PM   #11
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Originally Posted by Ed_The_Gypsy View Post
Actually, Canada is doing pretty well right now. Their housing market did not collapse quite as bad as ours (but I still think it is a bubble).


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Canada is/will be a good investment in the future - commodities and a responsible government.
"Peace, order and good government", as section 91 of the Constitution Act, 1867 has it.
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Old 08-26-2010, 01:49 PM   #12
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I'm starting to think we need a new forum category called "The Sky Is Falling."
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Old 08-26-2010, 01:56 PM   #13
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Originally Posted by Milton View Post

"Peace, order and good government", as section 91 of the Constitution Act, 1867 has it.
Norway might be good also.
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Old 08-26-2010, 02:03 PM   #14
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Canada certainly did have a big housing bubble in the late 1980's. There is currently quite a lot of debate regarding whether we have one now: see CBC News - Should Canada fear housing bubble trouble?

If you own your home free and clear, and don't speculate with rental properties etc., such issues are largely of academic interest.
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Old 08-26-2010, 04:51 PM   #15
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Is returning to sane valuations really a housing crash?
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Old 08-26-2010, 04:59 PM   #16
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Is returning to sane valuations really a housing crash?
Depends. If you bought your house in 1975 and didn't use it as an ATM, then no.

If you bought it with nothing down in 2006, then yes.
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Old 08-26-2010, 05:56 PM   #17
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Is returning to sane valuations really a housing crash?
This whole panic to restore house prices to their former levels is only to help the banks including Fannie and Freddie, China, and to a lesser extent realtors, home builders, illegal alien laborers, municipal taxing authorities, and sellers who plan to permanently leave the market. Lower prices are a wash for those sellers who will buy another home, and a meaningful gain for new buyers. More garden variety cronysim and spin.

ha
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Old 08-26-2010, 11:53 PM   #18
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Canada is/will be a good investment in the future - commodities and a responsible government.
Hmmm. Depends on who you talk to.
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Old 08-27-2010, 12:04 AM   #19
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Canada certainly did have a big housing bubble in the late 1980's. There is currently quite a lot of debate regarding whether we have one now: see CBC News - Should Canada fear housing bubble trouble?

If you own your home free and clear, and don't speculate with rental properties etc., such issues are largely of academic interest.
I think it is a bubble. With a country that large, there is no reason for housing to be expensive. The difference is that it isn't being propped up by a creative housing industry and a supportive government.

A huge amount of housing in Calgary and Fort Mac, AB, and Surrey, BC, is exactly that: speculation with rental properties. From what I can tell, mostly owned by immigrants. Some of the goofiest properties I have seen (huge, million dollar houses built on flood plains in the middle of blueberry fields!) are owned by immigrants. I worked with newcomers in Calgary who thought that was a bullet-proof investment. One guy wanted my opinion about buying distressed property in Las Vegas. I told him it was a bad idea. I hope he listened. When employment collapsed, housing collapsed, too.
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Old 08-27-2010, 10:54 AM   #20
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I'm starting to think we need a new forum category called "The Sky Is Falling."
I'd vote for "Self-fulfilling Prophecy Scenarios"

(might give it a little more sophistication)
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