This is why we need Deflation (wage, corporation, jobs, payment)

[Lowexpectations]

Originally Posted by Gtownoe

That makes no sense on the majority of every day purchases.


The majors, housing/transportation, would see an increase in sales if prices were to drop. Not a decrease.




How can homes be priced accurately if Americans can't afford them?

You don't understand deflation, purchase even needs would be delayed as long as possible.

[dpm1]

Originally Posted by Gtownoe

How does inflation spur buying??


Why would people buy more when their wages aren't increasing??


Are you going to magically raise everyone's wages? I can't raise my wages. If I could I'd pay myself, or those who help me more.

How does inflation spur buying?

I will just leave this here again. Keep in mind excessive inflation as seen below, is considered bad.

The prices of imported cars could rise by as much as 30 percent next year, something that Russian consumers know very well, Autostat's executive director Sergei Udalov told Kommersant.
"People who were planning to buy a car next year or a year from now are going to buy them now," Udalov said.
Car dealers saw a sudden surge in sales in November as consumers alarmed by the rapid devaluation accelerated their purchasing plans, a study by the Association of European Business found.


Car Prices Climb in Russia as Ruble's Fall Drives Inflation Up | News | The Moscow Times

[dpm1]

Originally Posted by Gtownoe

Why would people buy more when their wages aren't increasing??

If you know something will cost more tomorrow than today when will you buy it?

[MLSFan]

How can homes be priced accurately if Americans can't afford them?

um... because they can...? Just because "you" (generically) can't doesn't mean that no one can afford them.

Even at the peak of the housing bubble, houses were still being sold... And then deflation hit, and the economy crashed, and homes were "cheaper", but no one was buying them either... They didn't know if the houses would be even cheaper, so people kept holding off for a better deal (well that and they were afraid for jobs)

That makes no sense on the majority of every day purchases.

do you buy clothes out of season/buy things on sale? That's because you know that in the future they will be more expensive right?

[Gtownoe]

Originally Posted by Lowexpectations

You can't have it both ways, you've already questioned why deflation would slow buying after all people have needs and wants and now you are asking the same question on the flip side. Do you understand inflation and deflation?

Have it both ways??

I said deflation would increase spending. Inflation would decrease spending.

Sense when did higher prices on a fixed income lead to increased purchases??

[Gtownoe]

Originally Posted by Lowexpectations

You don't understand deflation, purchase even needs would be delayed as long as possible.

You can't delay to buy the basics. You can't delay a rent payment or insurance payments or food or gas.


Classify your purchases. You can't make a broad generalization when it comes to spending.

[Mircea]

Originally Posted by Dr. Kevin

Deflation does work and is necessary to the system, is positive as well as negative. It destroys the old created world and prepares for the creation of the new world.

That would all be very fascinating if there were some substance to it.

Originally Posted by Gtownoe

What are your solutions to "fixing" the economy?

End government interference.

Originally Posted by Gtownoe

Do you see it as healthy currently?

No, it's marginal at best.

Originally Posted by Lowexpectations

Incomes stay the same in deflationary cycles? That's interesting. What's your doctorate in?

Incomes increased in the last Deflationary Period.

Originally Posted by Ted Bear

We have not seen any broad based price pressure (Inflation) in the better part of a decade.

That only proves there is no Monetary Inflation.

Originally Posted by Ted Bear

But it is out there. The stock market is sending a VERY ominous signal that the world has a problem. QE has had no effect except to surge the price of financial assets for the already wealthy, and now what?

There's no problem.

As I have said repeatedly, Capital is preparing to shift to India, so that India can enter its 2nd Level Economy.

Originally Posted by Ted Bear

Deflationary collapse. NO demand at any price. Seen the price of oil recently? Global commodity. Ditto copper, et. al. Prices have fallen. Still no interest.

Those are Supply/Demand issues in specific Markets as they relate to the shifting of Capital.

Originally Posted by Gtownoe

How does inflation spur buying??

It doesn't.

Originally Posted by Gtownoe

Why would people buy more when their wages aren't increasing??

They don't.

Originally Posted by Gtownoe

Are you going to magically raise everyone's wages? I can't raise my wages. If I could I'd pay myself, or those who help me more.

When you have Monetary Inflation, and you will in about 10 years, your wages will automatically rise with the rate of Inflation, assuming there are no other factors at play.

The catch is that there is a lag time between rising prices and rising wages -- when there is Monetary Inflation. Wages often lag 6 months to one year, during which time consumer take a serious beating. Your wages catch up, but then prices jump again, and you're playing catch-up for the rest of the time, and you never get that last wage increase, so you end up losing your shirt on the whole deal.

These people are confused by Demand-pull Inflation, Cost-push Inflation, Interest Inflation, Wage Inflation and Monetary Inflation, as well as in the inverses (such as Supply-push Deflation).

1951-1960 Avg Wage $3,407.98
Pct Increase for Decade = 43.15%

1961-1970 Avg Wage $4,981.34
Pct Increase for Decade = 51.37%

1971-1980 Avg Wage $9,142.76
Pct Increase for Decade = 92.60% (Due to Monetary Inflation and Wage Inflation)

1981-1990 Avg Wage $17,271.12
Pct Increase for Decade = 52.67%

1991-2000 Avg Wage $26,116.49
Pct Increase for Decade = 47.42%

2001-2010 Avg Wage $37,561.78
Pct Increase for Decade = 26.58%

2011-2013 Avg Wage $44,063.15
Pct Increase for 4 year period = 4.44%


Source: National Average Wage Index

National Average Wage Index




Look at how wages almost double during the 1970s.

There were two causes, the first being real Monetary Inflation running about 10%-15% annually which drove up wages for most everyone.

The second was Wage Inflation which drove up wages for specific sectors of the economy.

For example, wages/salaries for truck drivers doubled due to a shortage of truck drivers.

You had key-punch operators earning the ridiculous wage of $10-$12/hour.

You had a host of technology introduced for commercial and/or household use in the early 1970s, and that required technicians trained in setting up, operating and maintaining such equipment and there were none, so wage went sky-high for certain tech fields.

That's why wages increased so sharply during the 1970s.

The Media coined it "Stagflation" because prices were rising, but many jobs did not see substantial wage increases.

And why?

What we know now is that you had a technology transition phase. The question is not "Can you operate a lathe or grinder?" rather it's "Can you operate a computerized lathe or grinder?"

So if you can operate a computerized machine tool, you were paid 50% to 100% more than your counter-part who could not. And as the transition was made, conventional machine tool operators didn't get pay raises, because their jobs were being phased out. Many other jobs were being phased out with the new computer technology as well, so they weren't getting pay raises either.

Sure, union shops were striking to force employers to pay to re-train workers, and some workers were already in the process of being re-trained, but Supply could never match Demand until much later in the decade.

[Gtownoe]

Originally Posted by eyeb

um... because they can...? Just because "you" (generically) can't doesn't mean that no one can afford them.

Even at the peak of the housing bubble, houses were still being sold... And then deflation hit, and the economy crashed, and homes were "cheaper", but no one was buying them either... They didn't know if the houses would be even cheaper, so people kept holding off for a better deal (well that and they were afraid for jobs)

They were being sold to investors. Not new home buyers

do you buy clothes out of season/buy things on sale? That's because you know that in the future they will be more expensive right?

See above post.




Do you ONLY care about your generation? Or yourself? Because that's what it seems. A bunch of entitlement as if YOU are balancing out the Economy alone. Or your profession.

[dpm1]

Originally Posted by Gtownoe

Have it both ways??

I said deflation would increase spending. Inflation would decrease spending.

Sense when did higher prices on a fixed income lead to increased purchases??

Ignore my link again?

If you have a fixed income and it will be cheaper to buy something today than it is tomorrow and you need to buy that product when will you buy it?

If you live on a fixed income and you know something will be cheaper tomorrow when will you buy it?

[Lowexpectations]

Originally Posted by Gtownoe

Have it both ways??

I said deflation would increase spending. Inflation would decrease spending.

Sense when did higher prices on a fixed income lead to increased purchases??

You now have it backwards