In a basic way of looking at this, the economic improvements are not for the average person.
By Daniel at 2 December, 2009, 8:15 pm
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The economic factors are improving for the banking and natural resource industries. China, Russia, and the Far East are buying up natural resource materials. India, China, and Russia are buying up tons of gold, silver, and other precious metals. Some of these countries are also buying a large quantities of uranium for nuclear power fuel.
The natural resource companies such as the mining and exploration companies are doing better because of the greater demand for their resources. Many of these companies are having problems to keep up with the orders. The total revenues are so large they are making the GDP look much improved.
Mining companies will consume more materials and services in order to operate. They require to purchase and maintain heavy machinery, tools, and many other types of services. The mining companies and the companies that service them require man power to operate. Therefore, this is a start in participating in the recovery.
The banks are making profits from trading in the markets, lending to large industries, collecting interest on outstanding loans, and charging their clients higher service rates.
As for the average of the North American and European consumers there would not be much difference with this type of economy, weather or not consumers are spending much more or much less. The improved economics are not from anything to do with consumer spending in this case.
During a recession food, transportation, and energy industries have to keep doing fairly well. As for their stock prices they can be dragged down with the rest of the markets, but they should come back as long as they are staying in business.
In a basic way of looking at this, the economic improvements are not for the average person. More people are still being laid off even though the rate of layoffs have slowed, and consumer spending is still decreasing.
Jerry G.
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