We're heading for recession

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Ben
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We're heading for recession

#1 Post by Ben » Mon Apr 06, 2020 3:14 pm

It's kinda obvious that we're heading for a recession. Loads of news stories about it (https://www.bbc.co.uk/news/business-52158444)

But one thing I don't get is what is happening with money at a time like this.

Salaries are being paid by the government, people are stuck inside so spending drops, but mortgages, rent etc are still being paid (even if you have a 'mortgage holiday' you're still going to pay it back).

So the part I don't get is... where is all the money ending up?

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Re: We're heading for recession

#2 Post by Shebee » Mon Apr 06, 2020 3:47 pm

Amazon! Lockdown shopping therapy
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Re: We're heading for recession

#3 Post by Gio » Mon Apr 06, 2020 8:57 pm

Touch wood we have lost one tenant, another is paying half normal rent, but, we have enough put aside to manage this year ok.
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Re: We're heading for recession

#4 Post by mangocrazy » Tue Apr 07, 2020 7:41 am

Oh_Shit_the_Economy.jpg
Oh_Shit_the_Economy.jpg (47.14 KiB) Viewed 8046 times
:smt003

Ben
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Re: We're heading for recession

#5 Post by Ben » Tue Apr 07, 2020 8:03 am

He he ok so I'm working out that you've not got much more of an idea of what's going on than I have!

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Re: We're heading for recession

#6 Post by mangocrazy » Tue Apr 07, 2020 9:43 pm

Ben wrote:
Tue Apr 07, 2020 8:03 am
He he ok so I'm working out that you've not got much more of an idea of what's going on than I have!
Yeah, just making it up as I go along (same as ever... :smt003 ). In fairness I'm probably better off than most - able to work from home (been doing it for several years for 2-3 days a week) and we have enough to eat and drink. I'd take getting bored over a dose of Covid-19 any day, so I'm counting my blessings.

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Re: We're heading for recession

#7 Post by Dr Ridin » Mon Apr 13, 2020 8:23 am

Ben wrote:
Mon Apr 06, 2020 3:14 pm
So the part I don't get is... where is all the money ending up?
I'm not an economist, but there probably isn't a lot of money anyway. Most people are paying rent/mortgages, car/bike payments, utilities, rates, loan repayments, buying food and so forth. The only thing that has been curtailed is discretionary spending and for most people, that's not a lot of money. So I guess that in the absence of places to spend it, it's probably (hopefully) gradually accruing in people's bank accounts.

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Re: We're heading for recession

#8 Post by FalcoJock » Mon Apr 13, 2020 8:25 am

Ben wrote:
Mon Apr 06, 2020 3:14 pm
It's kinda obvious that we're heading for a recession. Loads of news stories about it (https://www.bbc.co.uk/news/business-52158444)

So the part I don't get is... where is all the money ending up?
Numbers on computers, that's where much of it ends up. Apart from the tenner left in my wallet, that's where my savings are. A number on a bank computer. Once a month, my pension adds to that number, and the direct debits subtract from that number and add to someone else's numbers on computers. But it's just numbers on computers. Unless, of course, you don't have any and then it's a big, big worry (I've been there a few times).

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Re: We're heading for recession

#9 Post by fatboy » Mon Apr 13, 2020 1:43 pm

I cant help wondering how many MP's have claimed the £10k 'working from home ' allowance?
In today's 'I' newspaper Kier Starmer called for a virtual recall of parliament so decisions can be scrutinised and people held to account.
There is a lot to account for,it was clear in late January that Covid19 would have a global impact
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Re: We're heading for recession

#10 Post by lazarus » Mon Apr 13, 2020 3:29 pm

There isnt a fixed amount of "money" other than the purely physical coins etc. Banks create it because, for example, when you pay for something by debit card, the money goes to the supplier who passe part on to his supplier and part to his staff ant then those staff pass part to the buiding society and part to tesco and so on. And in most of those transacntions no physical money changes hands. So if there is less spending then there is less money in circulation.

Perhaps the point that needs recognising is that when we have a recession, and it could well be 10%, then there is less to share out and people get paid less. That could be disguised by inflatin and it wot be enevly spread. So for example you might be paid the same but your employer gets less and makes a loss. So he doesnt pay out dividends and the shareholder get paid less. Far more complex that that but the principle is simple. If we produce less in a recession then there is less to share out.

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Re: We're heading for recession

#11 Post by wrenched » Mon Apr 13, 2020 11:46 pm

You d not heard about the run on lavatory rolls? :smt005

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Re: We're heading for recession

#12 Post by BikerGran » Tue Apr 14, 2020 11:08 am

That's the thing - some businesses are going to be in trouble even if the government loan keeps them going, because it still has to be paid back. Other businesses are doing very nicely thank you! Big supermarkets for instance. Judging by the fact that I can't get a delivery slot from either of the ones I've shopped online with the last few years they must be doing a roaring trade! There are others too but I can't think of them at present.

So how will this come back into some sort of balance? I think it will take years.

On the other hand, I've seen a lot of ups and down in the country's economy and the world economy and you know what? Whatever happens we'll get through it.
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Re: We're heading for recession

#13 Post by lazarus » Wed Apr 29, 2020 4:02 pm

Not sure about the supermarkets BG . Tesco say " the coronavirus outbreak would cause an increase in operating costs of between £650m and £925m, largely because of increased staffing and distribution costs" . And since we are not visiting the store but using the delivery service, we are spending less - no impulse purchases of caviar and champagne. :smt003

What happens to the money? Well I guess some people are saving / cutting debt.

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Re: We're heading for recession

#14 Post by BikerGran » Wed Apr 29, 2020 9:48 pm

Of course the other countries are going through the same sort of stuff as us, so if we end up all in recession, is it a recession? They always talk about the pound relative to the US Dollar, or the Yen or the Euro. If they're all down as well are we all in the same boat?

Just my ponderings, not looking for answers in case someone tries to explain (I suffer from brain fade very rapidly).
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Re: We're heading for recession

#15 Post by BikerGran » Wed Apr 29, 2020 9:51 pm

lazarus wrote:
Wed Apr 29, 2020 4:02 pm
Tesco say " the coronavirus outbreak would cause an increase in operating costs of between £650m and £925m, largely because of increased staffing and distribution costs" .
Their staffing and distribution costs must have gone up because they're selling more stuff, therefore they must be making more profit. You and I may not be visiting the stores but a helluva lot of other people are!
The tragedy of old age is not that one is old, but that one is young.

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