I wouldn't blame the problems so much on people living beyond their means as on the government distorting the market. Yes, someone who takes a mortgage that exceeds their ability to pay is responsible, but the government is also responsible for putting interest rates (which they have no business regulating anyway) below the inflation rate, effectively incentivizing this spending binge with fiat currency.

I read today that the current unemployment rate is %6.7.

When I use the word "depression" I mean a shrinking economy. Down by %10 in two consecutive quarters is what I would call a catastrophe-- that's an astounding amount. (Especially since the common definition of a recession is two quarters of declining growth.) That definition of recession is probably great for people who never want to admit we're in one!

Grad school after my rtw just keeps looking nicer and nicer...

If there is one thing that every traveler I have met has agreed on its that the prices given in the guide books, Lonely Planet specifically, are crap especially for how much rooms cost. What are your thoughts on if this downturn will bring down the rates for budget travelers at hostels and so on?

To me the biggest decider would be does it actually reduce the number of budget travelers. Those doing it on credit will find that harder to come buy same for those who made money in the housing market. But what about people getting out of university who can't find jobs and decide to go away for a bit? In some of the small towns it definitely feels like there are some set prices that all of the hostels have agreed upon, but if they start getting fewer people coming someone will break away.

Anybody see and of this yet?

And of course, the depression gets deeper, the Obama administration is running $2T+ on the books debt, with probably closer to $3T in real new debt. To put this in perspective, at the end of the Bush term the total outstanding amount of US currency was $10T. Meaning $3T in new debt equals %30 inflation -- in one year.

This is on top of the close to %20 inflation from Bush in his last year.

This is exactly Zimbabwe style inflation, though it hasn't gotten as bad as Zimbabwe--- but the past and current administrations are following the Zimbabwe plan exactly--- just keep spending to try and solve the inflation problem, the irony completely lost on them.

Of course, people like Stoo (and Obama and Bush) will have an endless stream of excuses and denigrations to hurl at those who point out that the real world doesn't work the way their self serving economic fantasies would like to pretend.

And everyone else suffers.

Just because hyperinflation hasn't happened doesn't mean it won't.

What's the definition of hyperinflation? A doubling of prices every three years?

But inflation in the vein of Zimbabwe is a doomsday case that would require a massive devaluation of the dollar, and a massive weakening of the U.S. economy, on a scale much, much larger than what we're seeing now.

In short, the world would have to completely distrust the U.S.' future earning power — a scenario that I, personally, don't see happening to the magnitude that would be required. It is after all the largest... yada yada yada.

We'll see devaluation and we'll see inflation — probably double-digit inflation like in the 70s or 80s. But will we see Zimbabwe? In my opinion, it's not likely.

Regardless, it's always a good idea to look at hedges against inflation — real estate, commodities, et al — that hold their value well in an inflationary scenario.

But inflation is a way's off — still dealing with deflation here!

I have a slightly different theory on why RTW trips as we know it will become less accessible in the future. The gap between the undeveloped world and the developed world is narrowing. Economies in Asia, South America, and the Middle East are catching up to the US and Europe. The positive implication is that the global inequities prevalent in our world today might lessen. Frankly, I think it is for the better. There is certain unfairness in the way the world is today. A hard working genius born in a poor country will still likely end up much poorer than a lazy idiot born to a first world country. No one ever said that the world had to be fair, but wouldn’t it be nice if it was just a bit more so?

As the worlds economies improve, costs will go up. Old salty travelers often recount of how things were cheaper several decades ago. Imagine a world decades from now where every country was as expensive to travel in as the US or Europe. If the cost of the average RTW trip went from $60 dollars a day to $120 dollars a day, many fewer people would be able to afford it.

I dunno. I mean I'm in Europe right now and yes, it's not the $5 a day mecca it was in the previous generation's day, but the hostels still fill up with long-term travelers. So not as many people will travel sure, but it'll just take more time to save up!

LizaW wrote:Of course, people like Stoo (and Obama and Bush) will have an endless stream of excuses and denigrations to hurl at those who point out that the real world doesn't work the way their self serving economic fantasies would like to pretend.

Little miss sunshine lives in a glass house. Insults? Yes, I mocked your posts. More to the point, I questioned you logic, linked to information and posted graphs that contradicted your rant...and your hurled the ol' insults as fast as you could type them into your iPod Touch while traveling in London...and continue on months later.

It was only six months ago when you were talking up Palladium (then down 66% in less than a year) and Gold (still 20% volatility inside a year). "Self serving"? Spare me. Are you not singularly invested in your precious metals? Do you not preach a one-size-fits-all investment strategy? (Your precious metals, again.)

The term 'hypocrite' comes to mind.

I have consistently qualified my advice in this thread as useful for the short/medium turn savings of a soon to be departing world traveler. Full stop. For you to take it any farther is disingenuous.

I have also consistently (in this thread and others) been a long term dollar skeptic, a point which you consistently ignore.

You should at least give me credit for goading you into posting links to support your arguments. (See, even I can add quality to your life. ) Speaking of your arguments:

And of course, the depression gets deeper, the Obama administration is running $2T+ on the books debt, with probably closer to $3T in real new debt. To put this in perspective, at the end of the Bush term the total outstanding amount of US currency was $10T. Meaning $3T in new debt equals %30 inflation -- in one year.

That is a very bizarre definition of inflation. Care to back that up with a link? It just does not work that way. While Government debt and inflation are indirectly linked, they are defendant upon a hole host of other factors and are not nearly as 1:1 as you insinuate. If what you say were true, then then inverse would be true: a government with 1T in the bank, and 10T in 'outstanding' currency would suffer from deflation. Bizarre.


(lisaw & her precious)