The party's over for American consumers | Hacker News Reader

The party's over for American consumers

seattletimes.nwsource.com

19 pointscharzom10 comments

Growth in productivity is just about the only number you need to track on a national scale. On the long term, it is by far the best indicator of increasing wealth.

So I pay little attention to numbers like consumer confidence.

This is important because people change there focus on purchases from luxury extras to necessities. Developing productivity applications that can help someone in a particular industry make more money, I believe is where people will be willing to spend even when credit is contracting (which is happening now).

Ever ask yourself, "Why would anyone pay that much for THAT?" Pretty soon, they won't. If you can provide an offering that makes more fiscal sense to consumers or small business people, you may find fertile fields. I can just hear them now, "I hated paying those $#@^! Now I can use <insert your company name> Web service instead."

1. Not according to the cars I see in the parking lot and the long lines at Outback and every other steakhouse or upscale pasta palace in my area.

2. Christmas shopping season is coming, people will still act like idiots on the day after Thanksgiving when WalMart sells PS3s for $5 apiece or whatever.

3. Wall Street is desperately trying to play the media for suckers and make it sound like a bailout is needed. Remember a lowering of the rate or other steps taken to help ease the mortgage crunch, only helps those buying the mortgages - it doesn't help the person who is paying the actual mortage: they are on the hook regardless.

What would be the best way to benefit from this (other than shorting stocks)?

Am I correct in thinking that all the stocks will be hit? (impact differing only in magnitude, not in direction).

Are you guys doing anything about this, like buy Euros etc?

Of course, big money is only to be made in volatile markets. In a stable, efficient market, people buy value stocks and make money from the dividends. So, you might think that "Well, I predict bad times, so I should short the market..." But that's not the case in inflationary times:

http://www.mises.org/story/2532

The best strategy seems to be:

1) Go where the money will flow, and go where the future is young. This means Asia for the most part. Europe is almost as effed up as the United States, but with smaller defense expenditures.

2) Guard against inflation. You can do this by buying other currencies, gold, or by buying futures on margin, etc.

1) Won't a U.S. crash take everything down with it? 2) Thanks.

Shorting is scary for me due to potentially infinite risk. Is there some other way of doing pretty much the same thing (making money off of declining stocks) without losing more money than you lay on the table?

Oh no! No more cheap plastic crap from china!!! What are we going to do??? OMG we'll have to make it ourselves!!!!!!!!

The same people that worry about trade from china tend to claim that it is cheap and worthless.

Think for a moment about that, and you'll realize neither make sense.

People want it, so it isn't worthless. They make it with a competitive advantage. I'd prefer to live in a country whose competitive advantage was in designing products, not manufacturing them. It's obviously higher value.

I'm just saying there's no reason to panic. There is is an upside as well as a downside to this whole devaluation thing. People on the right AND left have been complaining about the loss of manufacturing jobs for years -- well, now they can have them again -- if that's what they want. I personally wouldn't enjoy working on an assembly line. Hell I don't really like working at all.

Reply on news.ycombinator.com