[Pops]

Always wanted to say "whither" - but alas I'll continue to wait

Anyway, per Heinie's discussion about more economic booms in the pipeline, I thought I'd start a thread about where they might come form.

Here is where Joe Bloe sits:




Here is where .gov sits:




Bubbles are blown on credit:



But nobody is going to borrow anything until housing clears:




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I actually think we'll see 2 current bubbles pop before we see any more blown, this one shows them both:



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So, whither whence the boom?

.

[ian807]

A) Railroad rebuilding. Buffet is no fool.
B) Household power back-up.
C) Electric bicycles.
D) Anything related to caring for and disposing of aging baby boomers like myself.
E) Natural gas. Booming now and it will continue as oil gets more expensive and we start using gas more.
F) Building solarization and energy saving retrofits.

[dinopello]

A) Railroad rebuilding. Buffet is no fool.
B) Household power back-up.
C) Electric bicycles.
D) Anything related to caring for and disposing of aging baby boomers like myself.
E) Natural gas. Booming now and it will continue as oil gets more expensive and we start using gas more.
F) Building solarization and energy saving retrofits.

Good list. There is room for more building too - infill to existing towns and retrofit of car dependent suburbs. People need something to do and food is provided with little human labor these days so apart from maybe some niche vegetable growing I don't think the masses return to the farm. If we had a global jubilee - all debt wiped clean - we would still have to contend with tigher energy supplies per person per activity - but people need something to do, otherwise they just cause trouble.

[Cog]

Coal and Nuclear power

[The Practician]

This thread illustrates the difference between a "boom" and a "bubble" pretty well.

On the topic of bubbles, John Greer seems to be pretty convinced that the next bubble is going to be in shale gas, which seems reasonable enough. The danger there (which I don't care about at all) is that instead of a more subdued "boom" in production at reasonable expectations of return on investment will get blown all out of proportion, and speculators will "need" higher returns than are physically possible, which could result in a feedback loop that destroys production capacity (through the drying up of credit for infrastructure expansion).

[rockdoc123]

I think the fact that there is now something in the order of 5 trillion dollars (I am pulling this from an article I read a couple of months ago on Bloomberg so the actual number may be a bit off in my memory) sitting on the sidelines in liquid accounts held by Americans and the balance of liquid versus equity investment has risen from about 60% in early 2009 to 75% in mid 2011 suggests that there are only two possibilities....either there will be another market boom (and soon) or much of that money is held by "boomers" who are now content to take their money completely out of the market and spend it all.

My guess is that the second option will account for a lot of that money disappearing from markets but if there is any change in market perception of risk (some really good news and lots of it out of Europe as an example) the remainder will flow back into equity markets very, very quickly. You could argue that many of the energy shares (as an example) were overvalued before the mid-2011 collapse with some of the juniors trading at multiples of up to 40 times earnings. That isn't the case now and in contrast there are now many of these energy companies that are trading at less than par with their their NAV.

That being said I think the pain that most endured over the past two collapses of the market will mean that future boom cycles in the market will be relatively short lived. I don't believe the average investor has the stomach for long term investment and balanced portfolio management strategies given recent historical events and will tend to run for cover from time to time.

Of course just my opinion....another guy on the internet.

[Loki]

I'm having a hard time seeing where the next economic boom in the United States will come from, but I'll also admit that my macroeconomic crystal ball isn't clear on the subject. Heineken may be right, I'm not ready to dismiss the short-term resiliency of our Ponzi economy. Perhaps we will see a couple more booms, perhaps the Great Recession will see a definitive end and we'll enjoy another decade or three of “prosperity.” Who knows?

But I don't see how a natural resource boom could revive our economy. Shale gas ain't gonna do it. Maybe there's a Saudi Arabia's worth of sweet crude just off the shore of Oregon, but somehow I doubt it.

High tech doesn't seem to be able to lift the US economy on its own, especially since the great majority of manufacturing is done overseas. Only so many Americans can be computer engineers and iPod marketers. I doubt nanotechnology or anything of the sort will do much for most Americans.

I'm having a hard time seeing housing coming back big. But in 20 years, who knows? Of course we'll be on the downslope of Hubbert's peak by then, so I don't see sprawl making a massive resurgence. Maybe the next real estate boom will be tearing down our old infrastructure and building more appropriate post-peak infrastructure. But with what money?

I think the cancerous growth machine has left the US (and likely Europe) and has arrived in the BRIC countries. That's where the booms will be, and that's where transnational capital is gambling its money. Canada and Australia also seem to be somewhat well placed given their fossil fuel resources.

My best guess is stagnation and slow decline for the next few decades here in the US, and probably Europe as well. Official US unemployment may hover around 10%, but labor force participation rates will continue to drop. Most Americans will continue to see a decline in their material standard of living. Our infrastructure will continue to slowly decay. But it may be slow enough that we'll only see the Long Decline in retrospect.

Climate change is the big wild card, long term.

[Pops]

This thread illustrates the difference between a "boom" and a "bubble" pretty well.

Yeah, sorry, I realized I'd confused things after I titled it "boom" but talked about bubbles...

Pick your topic I guess, booms being eventually good and bubbles being eventually bad.

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The biggest broadest boom right now is commodities.
Is that a sign of a bubble, i.e. "irrational exuberance"?
Is it a result of the finacialization of commodities and deregulation in the '90s?
Is it because capitalism is in the end-stage as predicted by Karl (Marx, not Hole) so gambling is all that's left?
PO?



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I didn't know the number Doc but I was also thinking the boomers must still be sitting on some cash. Another 5-8 years to clear the housing backlog and many will be spending that money on cat food if there aren't any good booms...

[SeaGypsy]

I would not use the word 'Boom' to categorise lifts in certain sectors; these are rightly called 'boons'. There are boons aplenty and no boom never. Can we agree that an American Boom would have sub 6% unemployment sustained over at least what? 3 years? 10 years?
What if this happened only because the bottom 3rd are working for ration packs?
Your system is so geared to funnel wealth upwards that my bet is there will never again be real sub 10% unemployment, for any length of time. I would say the same about Europe.
A boom is when you can walk down the street with no qualifications and a 1 page resume and land a reasonably well paid job. Nope, not past peak oil.

[Heineken]

Pops, I think you also meant whence the next boom. Where will it come from, and where will it take us.

I agree with those who believe we're on the cusp of a period of extraordinary money-printing, in both the US and Europe. A much larger money supply will inflate away much of the debt. They're hoping the inflation can be contained, since we also seem to have deflationary factors operating at present. They're hoping for a soft landing. If that can be engineered, and if resources remain abundant for a bit longer, and if we get a pause in the train of natural disasters, we could have the conditions setting up for another period of economic expansion.

But where will it take us, assuming we do have another expansive period? Obviously to an even worse place than we are now. A more damaged environment, accelerating global warming, more depleted resources, and worst of all more people. Ironically, perhaps the economic/banking system might hold up better, though---the experience of this latest bust is likely to contain some of the worst excesses for a time.

In every bust are the seeds of the next boom. The bust, strangely enough, prepares the ground for the next expansion after some variable period of fallowness. And more obviously, booms sow the seeds of their own destruction.

I have seen time and again how individuals, companies, and whole countries brilliantly recreate themselves to keep the game going. We should not discount such possibilities overmuch.

I see each cycle of boom/bust taking us to a worse place, until at some point, for a combination of reasons (definitely including peak energy), the system can no longer keep the cycle going, and collapses.

I don't think we are currently mired in a permanent depression. As I said on the other thread, there is still too much juice in the system. For example, Asia and South America are still just starting to wake up. There are still some deep pockets of capital out there.

[SeaGypsy]

Whither implies a question as to if, whereas whence implies a question as only to when, not if, as if it is a forgone conclusion. Whither is certainly the correct term.

One of the major reasons there cannot be such a thing as a boom is that the majority of capital is locked into either an inert pattern of production or towards offshoring asap. The kind of sweeping innovation necessary across all sectors occuring simultaneously in a timely fashion is highly unlikely to say the least.

[Ferretlover]

I don't know whether it is whence or whither, but, I am betting that, sooner or later, land, that which is away from the shorelines, AND can grow any crops, will be the biggest boom--as it has been throughout history.
Of course, I could be wrong ... but, I don't think so!

[Heineken]

Gypsy: According to the American Heritage Dictionary, "whither" means "TO what place, result, or condition." "Whence" means "FROM WHERE or what place." Pops in his OP seems to be asking, "given these dreadful conditions, where can a boom possibly come from?" (whence). To which I added "to where will the boom lead us?" (whither). I was trying to find a nice way to let him out of his little error. Sorry, Pops.

[Pops]

I stand corrected!

Had to happen sooner or later LOL

[davep]

From Whence, Shirley?

Oops, I've just re-read Heineken's post "Whence" means "FROM WHERE or what place.". Serves me right for being a smart-arse, really...

[xerces]

A) Railroad rebuilding. Buffet is no fool.
B) Household power back-up.
C) Electric bicycles.
D) Anything related to caring for and disposing of aging baby boomers like myself.
E) Natural gas. Booming now and it will continue as oil gets more expensive and we start using gas more.
F) Building solarization and energy saving retrofits.

There is going to be no boom while there is so much market uncertainty. And also, since the government has mastered the fine art of venipuncture, America's economic life blood have been too drawn out to have enough surplus cash to sustain another bubble.

[Revi]

The next boom will be in potatoes. I heard they are up about 12% since last year.

[Heineken]

The next boom will come from nowhere, and take us nowhere.

[copious.abundance]

Whence the next boom?

Click here.