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Are we heading for another depression?

post #1 of 20
Thread Starter 
I put this down here in case things get heated.

You'll can call me captain oblivious on this one. Up until today I did not really and honestly understand how bad things are money wise not just for us (my family) but everyone.

Today was my bi-weekly grocery day. First thing I have to do is put gas in the car. Its a 98 four door smallish car (V6). I had just under 1/2 a tank of gas put 25 in and still it did not fill up all the way.

Then its off to the grocery store. There I buy every thing but meat. Normally I can get by on average 80 per 2 weeks. Well in an attempt to save some money I decided the other day to make the boys snacks instead of buying them (its a once a day thing)I bought a very things to make cookies from scratch. And I bought stuff to make hubby's tea because he has been buying it by the gallon at 6.00 a week or so. My grand total was 150 dollars. Now I know I bought a few extras but not 60 dollars worth.

Next was the meat market. Normally I buy about 75 worth of stuff for 2 weeks. Well today I bought the same as always and the total was 112. I was in utter shock at this point. We went over the ticket and everything was right so I paid and left.

Next was the electric company. Not to bad there 202 and that was under what we normally pay. But while there I asked her about things to save energy and money.Well she informed me after looking at a book there was not much savings in not using my dryer so I might as well use it.

So on the way home it just hit hit me. We are in really really bad shape and I fear we are heading into an other depression and I cried. Came home and cried talking to my husband about this. I am really worried about this stuff. Today I did not turn the AC on at all. Just fans and open windows. Hubby is buying on of those exhaust fans that go in a window. I told him they all were just gonna have to deal with the heat at least for now because we need to do everything we can to bring costs down.

So what I am asking is do you think we are heading for another depression? If so how far off do you think it is.

Oh and I talked to 3 friends today (UPS, gas company like delivering gas to gas stations, and a factory) the factory is laying off people, UPS is talking about cutting people's hours, and the gas people as well.
post #2 of 20
I live in Michigan one of the worst hit states. I have had neighbors lose their homes and almost eveyone I know has lost their jobs including my husband and my mother(hers ends this month). I believe we are already in it.

We moved in our first home 5 years ago and everything I mean everything has doubled or more in price. Gas, electric, groceries, garbage pickup, I have a fixed rate mortgage but my escrow goes up so my payment is higher.

I have propane gas when we first lived here it was $300-$400 to fill the tank, this year it cost $900 to fill it once and we fill it 3-4 times a year. My electric used to be $30 now it is $80, groceries $70 a week now $110 a week, garbage has gone up $20 every 3 months, my mortgage has gone up about $50 and the phone used to be $35 and is now $60. We live 30 minutes from town gas is killing us.
post #3 of 20
Don't worry Ping I don't think we are going into a depression.

I have to ask kitytise a question though, if your home loan is at a fixed rate, how can the payment go up? I don't understand that about "my escrow goes up" what, exactly, does that mean?

Escrow
a contract, deed, bond, or other written agreement deposited with a third person, by whom it is to be delivered to the grantee or promisee on the fulfillment of some condition.

How can that make your mortgage go up?
post #4 of 20
If you cover your taxes and insurance in escrow and those change, your mortgage payment will change. Mine goes up every year also.

I'm not sure about the depression, but a lot of analysts are stating we are in the early stages of a recession, and they are just not certain how bad it will get or how long it will last.

As long as DH and I can both keep our jobs, we'll be OK, but we are scared to death that one of us will lose them. Until February we both worked at the same company and DH found a different job just in case the company fails. We're older than a lot of folks here and have saved money for a long time now to get to retirement. We can tap into that in a pinch, but I really don't want to work until the day I die.

DH went to the grocery store last week and came home with a $190 receipt. That's for 2 people for 2 weeks and the only thing extraordinary was that he bought extra food to invite the neighbors over for dinner. I saw the receipt and gave a big "ouch".

We're going to put in a big garden this year so that we can at least our produce for free all summer long.
post #5 of 20
I feel we are going in to hard times. I'm not going to go over my expenses because it repeats all the above. The writing is on the wall as people are losing their homes, jobs, and the cost of living is going up. These are not good signs of a healthy economy.
post #6 of 20
We don't think we're going into a depression, but we're pretty sure we're in a recession, even though the 1Q Gross Domestic Product number came out at 0.6% growth.

On October 17, Gary and I published this as part of our morning notes:

Quote:
One of the Reasons the Housing Market and Tighter Credit Mean Problems for the Economy

The issue: personal disposable income, personal consumption expenditures and residential investment expenditures. This number has been negative in six of the past seven years. There have only been 7 other years that this has been the situation since 1929. Two of those years were during the Great Depression; three were just after the end of World War II; the next was 1955, the last was 1999.

How have we afforded to do this? Americans have been borrowing against their homes. With this credit source drying up, there will be less cash available for consumers to use. (We are already seeing the disturbing trend of consumers having to choose between mortgage payments and credit card payments, evidenced by default rates between the two see-sawing). This is the basis of our outlook for a recession in 2008 and potentially into 2009.
But you're right - it's bad out there. Consumer sentiment is at a 26-year low. The S&P/Case-Shiller Home Price Index fell 13% in Feb (vs a year-ago). It's the sixth straight month it's been down, and 17 of the metro areas in the index reported record annual declines. David Blitzer, Chairman of the Index Committee at S&P says that there is no sign of a bottom. Worse? Foreclosures between January and march hit a new high. Nationally, almost 650,000 homes received a foreclosure-related filing in the first three months of the year! Another way to look at it is that one in every 194 households in the U.S. received a foreclosure filing during the quarter.

The job market is weak - first-time unemployment filings are at 380,000 (being consistently above 350,000 is generally considered a weak job market) - and for the week ended April 19, continuing jobless claims rose 74,000 to just over 3 million (the highest level since April 2004).

So people are losing their homes, are having trouble paying for their homes - and are having trouble keeping their jobs and finding jobs.

That said - China and India have been pretty big driver of global growth the past few years, and though as our purchasing power decreases it will likely affect their growth - it is the rest of the world's growth that will likely prevent what we believe could otherwise have become a depression.

The government has high hopes that these rebate checks will help pull the economy out of a recession (if we're in one) or help us to avoid one (if we're on the edge). Gary and I believe that this time, these rebate checks will mostly get used to repay debt as opposed to purchase things - which means they won't provide the economic boost they're hoping for.

But we think it's going to be real tough. The housing market hasn't hit bottom yet, and that's what's been providing the financing for our growth for quite some time.

Laurie
post #7 of 20
Laurie, thanks for that info, I know you and Gary work hard in that field, so your expert opinon is great to hear.
post #8 of 20
I don't think we'll have another depression, but unless something is done, we are definitely going into a recession.

I just took 2 straight semesters of economics and it has given me great insight into how the economy works (go figure ) The programs that FDR instated basically guarantee that we will never see times like the Great Depression.

I can only hope that with a new administration there will be more prosperous times ahead
post #9 of 20
I also think that how bad the economy is/will be depends a lot on where you live and the economy and economic health of the state/area where you live. Here in Colorado, there has been a slow down, but we're not even affected compared to someplace like Michigan. They are even saying that we've peaked over the worst of the housing market crisis here. I see Help Wanted signs all over. Yes, gas prices and grocery prices are going up here like they are everywhere else, but it seems like overall we're not as negatively affected as many other parts of the country.
post #10 of 20
I doubt we will hit a depression point. I'm sure we're heading for recession, or are already in the starting stages. DH and I are building a house right now (which might be considered dumb, considering job loss and whatnot - though I havent seen any of that here yet), but taking advantage of low interest rates and home prices. I guess once we have all the bills, we will feel buying groceries for a month give us a hit in the wallet, etc. I dont plan on using our AC very much, even though our house will be finished around the end of August (and its hot and muggy in Charleston then). But I'm also a person that enjoys saving as much money as I can (including that stimulus check).

But I wouldnt worry too much about a depression.
post #11 of 20
The price of groceries is outrageous!!

I went shopping on Wednesday and spent $385.00 and didn't buy a single meat item! And the sad thing is that this won't last the month!!

A list of things I bought:

8 - 2 litres of lactaid milk ($4.69 each)
3 bags mixed berries ($5.69 each)
2 cat litter ($9.99 each)
1 bag cag food ($9.00)
1 loaf bread ($4.00)
1 litre soy ice cream ($5.69)
1 box of Source Yogurt ($9.99)
2 jars decaf coffee ($7.47 each)
Canned cat food ($33.60)
1 box of 15 microwave popcorn ($9.99)
2 cans tomato soup ($2.99 each)
2 large cans diced tomatoes ($1.99 each)
6 small cans tomato sauce ($1.59 each)
Graham Cracker Crumbs (price?)
2 gallons distilled water for CPAP machine ($2.49 each)
1 pint of egg whites (price?)
1 jar Healthy Choice pasta sauce
1 package spaghetti noodles ($3.00)
1 pound margarine ($2.99)
1 package of parsley flakes (price?)
1 package of basil flakes (price?)
3 packages of veggie bites ($5.00 each)
4 cans of black beans (price?)
2 bags split lentils (price?)
2 bags red kidney beans (price?)
2 bags chick peas (price?)
1 bag of basmati rice ($7.99)
1 box of Special K ($9.00)
1 box of Captain Crunch ($6.00)
1 package of milled flax seed (4.00)
2 packages of mini marshmallows ($2.99 each)
1 small can of Pam ($4.00)
4 bags frozen veggies (on sale for $3.00 each)
2 cans chicken boullion base ($3.99 each)
1 can bread crumbs ($6.00)

Bulk bins:
sunflower kernels
sesame seeds
dried cranberries
cashews


6 apples
6 oranges
8 bananas
2 heads of leaf lettuce
6 vine tomatoes
1 package of sliced mushrroms
3 green peppers
3 red peppers
1 bag of onions
5 sweet potatoes
2 salad mix ($7.00 for both) - on sale
1 - 3 pound bag carrots
2 - stalks of celery
1 large package of strawberries ($5.99) on sale
post #12 of 20
The way DH and I have combated the skyrocketing price of groceries is to make everything ourselves. This has put me into over drive. I can now make buns for hamburgers, bread for sandwiches, and I'm getting the stuff to start canning. I figure this will be worth it in the end because I'll have a totally new skill set once this is all over. This week I'm attempting to perfect making homemade potato chips.

Wish me luck.

As for the OT, are we headed into a new depression? I hope not. I think we as Americans just have to rethink how we get and spend money.
post #13 of 20
Quote:
Originally Posted by Natalie_ca View Post
The price of groceries is outrageous!!

I went shopping on Wednesday and spent $385.00 and didn't buy a single meat item! And the sad thing is that this won't last the month!!

A list of things I bought:

8 - 2 litres of lactaid milk ($4.69 each)
3 bags mixed berries ($5.69 each)
2 cat litter ($9.99 each)
1 bag cag food ($9.00)
1 loaf bread ($4.00)
1 litre soy ice cream ($5.69)
1 box of Source Yogurt ($9.99)
2 jars decaf coffee ($7.47 each)
Canned cat food ($33.60)
1 box of 15 microwave popcorn ($9.99)
2 cans tomato soup ($2.99 each)
2 large cans diced tomatoes ($1.99 each)
6 small cans tomato sauce ($1.59 each)
Graham Cracker Crumbs (price?)
2 gallons distilled water for CPAP machine ($2.49 each)
1 pint of egg whites (price?)
1 jar Healthy Choice pasta sauce
1 package spaghetti noodles ($3.00)
1 pound margarine ($2.99)
1 package of parsley flakes (price?)
1 package of basil flakes (price?)
3 packages of veggie bites ($5.00 each)
4 cans of black beans (price?)
2 bags split lentils (price?)
2 bags red kidney beans (price?)
2 bags chick peas (price?)
1 bag of basmati rice ($7.99)
1 box of Special K ($9.00)
1 box of Captain Crunch ($6.00)
1 package of milled flax seed (4.00)
2 packages of mini marshmallows ($2.99 each)
1 small can of Pam ($4.00)
4 bags frozen veggies (on sale for $3.00 each)
2 cans chicken boullion base ($3.99 each)
1 can bread crumbs ($6.00)

Bulk bins:
sunflower kernels
sesame seeds
dried cranberries
cashews


6 apples
6 oranges
8 bananas
2 heads of leaf lettuce
6 vine tomatoes
1 package of sliced mushrroms
3 green peppers
3 red peppers
1 bag of onions
5 sweet potatoes
2 salad mix ($7.00 for both) - on sale
1 - 3 pound bag carrots
2 - stalks of celery
1 large package of strawberries ($5.99) on sale
Microwave popcorn AND margerine. Oh, that is bad, very, very bad, seriously.
post #14 of 20
I agree with the consensus. It's not that bad yet. I've been through recessions and this isn't anywhere near serious, yet. BUT, the way the economy is being mismanaged by government fiscal irresponsibility, it very well COULD.

Take the example of post-WW I Germany, where a budding democratic republic had first been established. But the country was saddled with enormous war reparations, and to pay for it the government artificially inflated the money supply. Trying to pay their bills with money created out of thin air. Sound familiar? This policy led to a phenomenon call hyperinflation wherein the value of the currency declined so fast it was soon common to see people with bundles and bundles of paper currency denominated in the millions just to buy a loaf of bread. Obviously this led to an economic collapse, a depression, great hardship and misery, and eventually the rise of National Socialism and a fascist dictatorship.

Could this happen here in the US? You better believe it. Are we anywhere close to it? No. A long way from it. But if we continue on this path, I'm not too sure. Who would have believed it possible only a few years ago to have $100+ crude oil and $3.50+ gasoline?

Tell the government to stop creating money out of thin air, to get their fiscal house in order, that if they don't show some responsible spending behavior, they'll be voted out. This recent "economic stimulus" isn't the straw that broke the camel's back, but the camel is getting pretty sway-backed. The poor thing's got a really bad backache.
post #15 of 20
Wow! And I thought groceries were expensive here! It is not not nearly as expensive here for groceries, but the stores here are competing with the Exchange on the military bases.
If our economic stimulus check does not arrive soon, I am going to have to move or sell my truck I just bought with my tax refund. My SO is not making much money, but what he does make, he spends like it grows on trees. I have never seen anyone spend money on crap like he does. When I was working full time, I paid most of the bills. We just went to a friend's wedding, which I knew we would have to spend some money on, but not nearly as much as he did. I am about to lose my mind, and my doc wants me to go on disability due to my medical problems and constant stress over this.
post #16 of 20
Sounds like he needs some financial counseling. Money differences are a major stressor on relationships.
post #17 of 20
I dont know anything about econaomhy or how it works... maybe i should have paid attention in Highschool... all i know is im scared.

My boyfriend just went through a forclousure and divorce at the same time. now we are renting. money is very tight. Gas prices are killing us.

I'm scared and there is no comfort to be found... is there?
post #18 of 20
You'll figure out some way to survive. Don't worry about it as much. Life is too short.

ETA - well, OK, that sounded flippant. What I meant was that people (and this includes you and your boyfriend) are resourceful. Times may get tough, but people manage to find out some way to get through them. Will things be the same as they were? That's probably your main fear: fear of the unknown. But....things always change ... they never stay the same. So insofar as you've faced change and new things, well, that's something you've already successfully done. There's no reason to think that this is any different. You CAN face it, you CAN get through it, you WILL come out the other side.

Now, go do something nice for yourself.
post #19 of 20
I'm starting to get scared things are so bad. The other day DH almost had to miss work because we had no gas. He ended up scrounging around two dollars and he made it the 25 miles to work on that. Then a guy he works with took the car to the gas station and put a little over a half a tank in it. DH and I can barley afford to eat half the time. It will be a little better when I get a part time job but if the economy gets any worse I don't know where we'll be.
post #20 of 20
ugh hon, same boat... pocket change is a big thing right now to get enough gas to make it the places we need to. And the food thing too... this is out of control.
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