[deMolay]

As international trade falls away. And as companies lay off and curtail production, how soon will we see shortages of goods here in North America?

[skeptik]

$this->bbcode_second_pass_quote('deMolay', 'A')s international trade falls away. And as companies lay off and curtail production, how soon will we see shortages of goods here in North America?

[vtsnowedin]

The first thing you will run out of is money. Reduced work hours ,layoffs orders canceled etc. and the reduced payouts from peoples retirement accounts which have been cut in half will reduce the amount of money you have at hand and they have already cut off almost all access to credit. The shelves will be full in every store that is still in buiness but you won't have a dollar in your pocket to buy any of it with.

[eXpat]

that´s a good one

[Leanan]

Idled railcars stack up as U.P. freight business slows
$this->bbcode_second_pass_quote('', 'T')he recession has hit the nation's freight railroads hard, including Omaha-based Union Pacific, which has idled about 50,000 railcars and furloughed thousands of train and yard workers.

Stacked end to end, the idled cars would stretch 500 miles, or about the distance between Omaha and Scottsbluff, said Donna Kush, railroad spokeswoman.

[Sixstrings]

The point about the railroad engines being idle and such surprises me. I remember reading, before all this S started hitting the fan, that our rail network was very stressed -- not enough track to handle all the loads, etc. So now they're sitting idle; that's significant.

[skeptik]

$this->bbcode_second_pass_quote('Sixstrings', 'T')he point about the railroad engines being idle and such surprises me. I remember reading, before all this S started hitting the fan, that our rail network was very stressed -- not enough track to handle all the loads, etc. So now they're sitting idle; that's significant.

[shortonoil]

cbxer55 said:

$this->bbcode_second_pass_quote('', 'P')hoto taken at West Colton CA shows over a mile long line up of Union Pacific locomotives sidelined due to the current economic conditions. I saw not too terribly long a go on Layoff Daily that both Union Pacific (UP) and Burlington Northern Santa Fe (BNSF) have been steadily laying off employees. It amounts to sevreal thousand in both cases.

[dohboi]

Of course, on one level it's a good thing that people aren't buying tons of crap anymore. On the other hand, it is having a ripple effect on the economy and causing more and more people to lose their jobs and their livelihoods.

We on these forums have been thinking about these types of developments for some time. So what do we think would be the best way to proceed? Do everything possible to start up the over-consumption and over-production machine, as the stimulus package seems to be aiming for? Or...what? How do we restructure the economy to be based on something other that limitless growth and consumption?

[wisconsin_cur]

The fact that the relief package was designed to try to prime the pump of consumption told me that tptb do not really understand what is going on or the degree of risk we are under. For me the response is the same. Take every day as a gift and prepare for the full impact of what is to come and help others do the same. If things go slow, I have more time. If they go fast, then I need to be as ready as possible when that happens. I read the news to stay motivated and on task; not expecting to see anything done that I think will be helpful.

[Newfie]

I was reading Limits to Growth:The 30 year update the other evening and was struck by their #1 graph, which depicts the "business as usual" model. In that they seem to predict a peak in industrial goods and consumer goods/person followed by decreased food, life span, services, etc.

The authors say that the charts are only good up to the time of the collapse of the first trend line and then there are too many unpredictable factors to consider.

Their chart seems to have predicted the peak at around 2012 and brought on by resource depletion which diverts capital to resource development which causes capital to go away from industrial goods. It strikes me that their model may have not adequately assessed that our financial system was already drained of capital through the financial nonsense we have perpetrated and that last summers high oil prices then sucked up the last bit pushing us prematurely over the edge into collapse. My suspension is that we will see a dead cat bounce in the overall financials before it takes off to the Marianas Trench once again.

The Baltic Dry Index has recovered somewhat from its pit in January but the climb seems to have leveled off. It is now slightly higher than it was in 2002, just before the big run up. This would seem to indicate some basic raw materials are moving once again. I think that means that we should see consumer goods pick back up in about 6 months.

Maybe. I'd love to hear alternative analysis.

[pedalling_faster]

$this->bbcode_second_pass_quote('cbxer55', 'P')hoto taken at West Colton CA shows over a mile long line up of Union Pacific locomotives sidelined due to the current economic conditions. I saw not too terribly long a go on Layoff Daily that both Union Pacific (UP) and Burlington Northern Santa Fe (BNSF) have been steadily laying off employees. It amounts to sevreal thousand in both cases.

[shortonoil]

Newfie said:

$this->bbcode_second_pass_quote('', 'M')aybe. I'd love to hear alternative analysis.

[Pops]

I'd think the monetary system in the US is well and good, what would you rather hold; Yen, Dinars, Rupies?

My thought is there will be a pruning of the things 2nd mortgages bought with free money; remodels (construction/furniture/appliances), cars, vacations, whatever.

We have experienced a glut of worthless stuff and have been gluttonous.

As we, the world "We", come to terms with the fact we can't be gluttons any longer, we will turn the excess labor, raw materials and infrastructure to producing important things.

Or not.

[bodigami]

$this->bbcode_second_pass_quote('dohboi', 'O')f course, on one level it's a good thing that people aren't buying tons of crap anymore. On the other hand, it is having a ripple effect on the economy and causing more and more people to lose their jobs and their livelihoods.

We on these forums have been thinking about these types of developments for some time. So what do we think would be the best way to proceed? Do everything possible to start up the over-consumption and over-production machine, as the stimulus package seems to be aiming for? Or...what? How do we restructure the economy to be based on something other that limitless growth and consumption?

[patience]

I'm seeing minor shortages now, due to stores not restocking. The local Wal Mart quit stocking most new TV's, and say they are available by personal order, contingent upon being able to find what you want in a warehouse or other store. Implication was that new stock is not coming in to the country.

Went to buy a couple 4 1/2" disc grinders yesterday for the shop, but they only had the one display model. A couple years ago, they kept a dozen on hand. There appears to be a fear of having too much stuff on hand and being stuck with it, so merchants are letting things run out, more so than usual at inventory time.

I'm doing this too. I stock small amounts of aluminum round bar, and sold a bit last week. My price for 2" diameter was $15.96/foot. Take off my 30% markup and that means I paid $12.28/foot, about 2 years ago. I checked the catalog for replacement stock (Enco, Chicago), and found $110.95/6 feet = $18.49/foot, my COST now. No deflation here. So, why would I tie up over 110 bucks in an item that will take 2-3 years to recoup the money? And, no, I'm not restocking it. In contrast to the local hardware store, I operate on a cash basis in business, not ever using a line of credit. Those who do use credit for retail stock have a much greater incentive now to cut back on stock, with dwindling sales.

Add the above problems to those of JIT inventory, and less goods in the pipeline, and we very quickly get to long lead times and shortages at retail level. I expect this to get worse, so get what you need while it is in ready supply and the credit system is still up and limping.

[vision-master]

$this->bbcode_second_pass_quote('', 'I')'m seeing minor shortages now, due to stores not restocking. The local Wal Mart quit stocking most new TV's, and say they are available by personal order, contingent upon being able to find what you want in a warehouse or other store. Implication was that new stock is not coming in to the country.

[mommy22]

I drive all around my county in NEOhio for my job, and when I started a few years ago, it wasn't uncommon to sit at a crossing for a left hand turn many minutes. I was waiting for delivery trucks to go by, and after a few minutes, I would get to turn. Now, I never have to wait at all to mke a left hand turn, as truck traffic has plummeted. I can only imagine that all those truck were delivering stuff that people aren't buying anymore.

[pup55]

according to a little bit of research, the capital cost of a new rail car is $100,000.
so if there are 50,000 of these sitting around, it is causing a lot of problems.

Nowadays, the railroads do not own these cars, they lease them. It was a little industry for awhile to buy a rail car, and own it, and let people lease it from you for a trip or two. How did you get the money to do this? you borrowed it.

So you borrowed some money, bought a rail car, and now it is sitting around on a siding out in Scottsbluff waiting for somebody to ship something....

GE Capital, for one, is involved in this kind of thing.... if you are a railroad, and you want to have an extra railcar but do not want to pay out the 100K for it, you get GE Capital to buy it, and you lease it from them.....well you can get the picture....Your lack of ability to put something in that car is either costing you some money, or it's costing GE Capital some money....Maybe the people that built the rail car just leased it to you instead of selling it to you. Maybe they borrowed money for the materials to do this...

This 50,000 cars times 100,000 dollars per car is 5 billion dollars worth of rolling stock that is not rolling. At 8% interest, that's interest expense of about a million per day that someone is holding the bag for because these things are on a siding.

This is why GE is trading at about 6 or something right now.

Anyway, someone is holding the bag on all of this.

[nobodypanic]

$this->bbcode_second_pass_quote('pup55', ' ')

Anyway, someone is holding the bag on all of this.