Economic Crash Coming?

So I was looking at tungsten bucking bars today, and noticed the price of tungsten has come WAY down recently, and that got me thinking, so I did some checking.

The price of pretty much all raw materials (steel, aluminum, copper, etc) is down tremendously in the last year or so, and is still dropping as of this month. That most likely means manufacturing output has pancaked somewhere. Also, I've seen reports that international shipping is way down, but I'm not sure how to verify that.

On a probably related note: China is in the toilet, but nobody knows exactly how far, because they're pants-on-fire-level liars. We do know their stock market has absolutely shit itself though.

Oil has totally crashed, and may or may not have finally bottomed out at 30$ a barrel. The sanctions against Iran just went away, and they're about to dump a massive amount of oil on the market (They've been stashing it up in offshore tankers waiting for sanctions to lift. I'm talking upwards of 50 million barrels). Part of the oil price drop is due to increased production, and part is due to the strength of the Dollar, but the majority seems to be just simply lower demand.

The European economy is also pretty shaky. They still haven't really sorted out their monetary/budget deficit problems.

The Russians are totally fucked. Between the sanctions and the oil crash, they're in really bad shape.

Our (the US) stock market is down, but not officially crashing yet (although it's extremely jittery). The low price of materials and oil should help us overall, but if China et-al really go down they'll take us with them.

I guess what I'm trying to say is, I think something big and ugly is going to happen this year. I think China is either about to crash and burn, or already has and we just don't know it yet. Exactly how much that will affect the rest of the world remains to be seen, but at least in the short term it'll probably be bad.

And I think the economic problems might just be the start. Desperate people do crazy things, and if China crashes/has crashed, their leaders will be quite desperate indeed. Their people have been getting increasingly restless, and an economic crash could bust things open. They might need to come up with a distraction to keep the people from revolting. I could very easily see them starting something with Taiwan for example.

So anyway, I dunno if that made sense to anyone, but what do y'all think? Personally, I think there's enough going on that I'm starting to get a little worried.

Edit: I found this article that lays out the problems with raw material shippers
http://www.wsj.com/articles/dry-bulk-shipping-firms-face-unprecedented-crisis-1453293892

 

Here: http://www.fin24.com/Economy/South-Africa/
Just lightly brush over the headlines - you'll get the picture. This is a direct result of the least responsible (fiscally) government this country's ever had. The USD is worth 45% more to us than it was only 6 months ago.

Our economy is tied in directly with both US and Chinese economies, both being our largest trading partners, and as you can imagine, it's tough going for the both import and export markets.

So yes, I agree - something's going down this year.

 

Yeah, I think inflation will really take off here in the US if China has really cut production as much as it appears.

And speaking of China: all the "experts" are saying the drop in commodity demand is because China's growth is slowing (but that they're still growing). That doesn't add up. If they're still growing, just slower, then raw material demand should also still be growing. It's not. If your economy is using 100000 tons (just an example number) of iron, and it's rate of growth slows from 10% to 6% (the official Chinese GDP numbers), then logically you'd just use 106000 tons of iron instead of 110000. I realize that's oversimplifying things, but raw material imports to China have fallen off the chart in the last 12 months. Now, over time, China was trying to convert to a more service based economy, but you don't do that in less than a year.

 

Part of the problem is having an election year here as well. Normally this doesn't start until a little later in the year but the US economy always seems to get shaky and/or slow down during election years. Having the fucking circus that this election is doesn't help I'm sure.

 

Eh, the US is about average among developed nations as far as debt goes. And the Dollar is getting STRONGER right now. That's part of the reason oil has dropped. Current exchange rate to Euros is 1.08$ to a Euro. That's the lowest I've ever seen. Don't get me wrong, the US seriously needs to crank back on the spending, but comparatively, we're probably the most solid economy in the world at this point.

 

That's the weird thing. The US economy is actually doing pretty well right now (except for energy companies). The problem is, if China suddenly stops/stopped making cheap shit for us to buy, it's gonna really scramble things. Might be good in the long run, cause we might start making things ourselves again, but it could also send everything into a tailspin. Fortunately, I don't think the US is holding much Chinese debt. The people holding their non-government debt especially right now are so very very fucked.

 

Ehh. I think the US has stopped using alot of cheap china labor years ago. Its diversified at least. To mexico thailand indonesia a few others. Walmart might be fucked but fuck walmart.

 

Speaking of walmart, they're closing over 250 stores across the US.

 

yeah but those are just the walmart "express" stores. not the main big box stores. it was just an experiment anyway. the CEO literally shrugged when asked.

 

Never heard of Walmart express. All we got here are super centers.

 

I have a very rudimentary understanding of economics, so bare with me. As far as I know demand drives the supply. Once the supply becomes too great, then the demand is no longer there. The endlessly rising value has to peak and eventually fall. It has just finally taken this long for this to happen.

Why?
*You may want a tinfoil hat for this one* I imagine there is a [insert name for evil hidden world government] that ensures they stay in power by artificially creating demand. Here's an article discussing how they do it for Diamonds. Claim something is rare and sell it for expensive to the sheeple. Have media to distract the masses and claim those that aren't sticking to their role as the bad guys. Is it not ironic that every developing country is somehow on America's naughty list?

The information age is bringing about the age of transparency. Readily available information is making it harder to keep corruption under wraps; no wonder they're looking into controlling the internet. This combined with developing countries giving them the middle finger, and no longer accepting 3rd world status. So the economy isn't crashing, its just finally stabilizing.

But that's just a theory.... a life theory.

 

It'll be interesting to see how it affects the company I work for. China has taken a lot of business from us over the years since they can manufacture parts cheaper, so it could mean more work for us if they crash. But the company is big on importing those cheaper products from China and getting a piece of it, so things might get sketchy during the transition. Either way, it's out of my hands. Time to kick back, raise a glass and watch it all burn.

 

Yeah, it's not really possible to fake demand. With the DeBeers thing, all they have to do is control all or most diamond production and just not produce enough to meet demand. It costs them basically nothing on the front end and they make billions on the back. To do what you're saying, that situation would be exactly reversed. Not only would they have to front the money for all the un-needed materials, but they'd then have to store it somewhere. And in the end, they'll never be able to sell all the surplus materials, because the demand was never there to begin with.

 

Yeah, they're only closing 4 "super" walmarts. Probably the ones they shut down last year to break the union that was trying to form. The ones that the conspiracy theorists thought were gonna be concentration camps

They're basically CVS/Walgreens competition. Just slightly bigger. They're still building them too. There's one 2 miles from my house that's almost done.

 

You should read up on what China did last year. They had a shit-ton of bad debt (remember all those empty cities they built?), and it was dragging their banks down, so they created a couple banks (on paper) and transferred all the bad debt to them and then those banks crashed and burned and (they hope) took all the bad debt with them. It worked for them in the short term, but in the long run that's a really good way to end up like Zimbabwe.

 

Nothing has "intrinsic" economic value. Even in a barter system, an item that's worth a great deal to the guy on your right may be completely worthless to the guy on your left.

Value in any form is always a relative. Money just gives people a convenient way to carry value around with us without lugging everything we own everywhere.

 

Correct. You don't fake demand, you fake a shortage.

 

The way we grow our economies pretty much hardwired collapses into it. We just go full steam ahead all of the time with no long term plans until something breaks, then we rebuild and do it all over again.