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Per my link, we actually have real wage increases, worldwide (and we have had them for about a dozen years, at least. Chinese wages are a major driver (in spite of the urban/rural divide).
The problem as I see it, is that debt is going up faster than wages. We need wages driving inflation not debt. We need the cost of labor driving inflation not an over abundance of debt. I'm not saying that wages are not going up. I'm saying that they need to be going up faster than debt.
One of the first things TPTB did at the start of the financial crisis was to suspend traditionally accepted accounting practices so that the banks didn't have to mark assets to market. Reinstate these and the system would implode. By any measure we are living in the Matrix where some take the red pill and others the green pill. They will keep this going until they can't. Go Neo.
One of the first things TPTB did at the start of the financial crisis was to suspend traditionally accepted accounting practices so that the banks didn't have to mark assets to market. Reinstate these and the system would implode. By any measure we are living in the Matrix where some take the red pill and others the green pill. They will keep this going until they can't. Go Neo.
Excellent points. Thanks for bringing it to my attention.
That was at the end of the crisis around January 2009. The regulators instituted fair-value accounting of assets in fall 2007 which forced the banks to recognize losses on the mortgage securities holdings. The SEC also dropped the uptick rule for short sales in July 2007. Both of those rules were reversed or suspended after the banks were bailed out.
On September 30, 2008, the SEC and the FASB issued a joint clarification regarding the implementation of fair value accounting in cases where a market is disorderly or inactive. Section 132 of the Emergency Economic Stabilization Act of 2008, which passed on October 3, 2008, restated the SEC's authority to suspend the application of FAS 157.
On October 10, 2008, the FASB issued further guidance to provide an example of how to estimate fair value in cases where the market for that asset is not active at a reporting date.
On December 30, 2008, the SEC issued its report under Sec. 133 and decided not to suspend mark-to-market accounting. [Mish Comment: Markets that rallied into the end of the year, collapsed again in January and February]
On March 16, 2009, FASB proposed allowing companies to use more leeway in valuing their assets under "mark-to-market" accounting. On April 2, 2009, after a 15-day public comment period and a contentious testimony before the U.S. House Financial Services subcommittee, FASB eased the mark-to-market rules through the release of three FASB Staff Positions (FSPs). Financial institutions are still required by the rules to mark transactions to market prices but more so in a steady market and less so when the market is inactive. To proponents of the rules, this eliminates the unnecessary "positive feedback loop" that can result in a weakened economy. [Mish Comment: Markets took off just ahead of the change and never looked back]
On April 9, 2009, FASB issued an official update to FAS 157 that eases the mark-to-market rules when the market is unsteady or inactive. Early adopters were allowed to apply the ruling as of March 15, 2009, and the rest as of June 15, 2009. It was anticipated that these changes could significantly increase banks' statements of earnings and allow them to defer reporting losses.
One of the first things TPTB did at the start of the financial crisis was to suspend traditionally accepted accounting practices so that the banks didn't have to mark assets to market. Reinstate these and the system would implode. By any measure we are living in the Matrix where some take the red pill and others the green pill. They will keep this going until they can't. Go Neo.
So how much inflation do you think we need to be able to reinstate mark to market?
no clue. i am not an economist. what I suspect we need is deflation and to let the business cycle run it's natural course instead of being manipulated by central banks.
Pesto is exactly that. He's an "Austrian" school economist, which means that he's ideologically opposed to all government regulation of economic activity ... except, of course, to make gold the national currency.
Well, there's 10 reasons right there to ignore him.
Quote:
Originally Posted by Philip T
2016: Same as Oil now. Really strange how folks keep "blaming" Saudi. It was US. Between Oil Fracking and Tar Sands -- the US (with Canada), as part of the Global Market of Supply and Demand have flooded the market and cut our own prices (and throats).
Yes, the US position is clear:
Quote:
According to the IEA and the EIA Saudi Arabia must produce 22 mbpd by 2030. But Sadad Al Husseini [Saudi Aramco] claims that "the American government's forecasts for future oil supplies are a dangerous over-estimate." ...Saudi Aramco says that production can be increased to 12.5 mbpd in 2015. They plan a new pipeline with a capacity of 2.5 mbpd, so it looks like they are willing to increase production to 12.5 mbpd, but so far there are no signs of reaching 22 mbpd.
Source: UNDERSTANDING THE PEAK OIL THEORY, HEARING BEFORE THE SUBCOMMITTEE ON ENERGY AND AIR QUALITY OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS FIRST SESSION DECEMBER 7, 2005
So, basically, the US demanded and bullied the Saudis to increase production, the Saudis did, and now everyone is mad.
Note that Saudi forecasts for oil demand were much more accurate than US forecasts.
Cash transfer is one thing. We live in global economy, GWP is what we are dealing with not GDP. So when you transfer a job from a $20 an hr labor pool to a $1 a day labor pool, GWP contracts by the difference in wages.
That's not how it works and GWP is irrelevant.
Quote:
Originally Posted by ContrarianEcon
If you move a lot of jobs from high wage markets to low wage markets the first thing you get is a debt bubble then the second thing you get is deflation as the debt bubble pops.
No, that's not what happens. There's no relationship between wages and debt.
Quote:
Originally Posted by ContrarianEcon
The problem isn't that they got our jobs, it is that they also didn't get our wages.
Why would they? Wages are relative.
Quote:
Originally Posted by ContrarianEcon
That is the real transfer of wealth from the middle to the top. Undo it by upping wages world wide. US minimum wage everywhere or higher.
That would induce economic turmoil via Wage Inflation in those States.
Quote:
Originally Posted by Lycanmaster
"In fact, Buiter says that because of political dysfunction in the U.S., America is the least-prepared economy for the major economic changes coming in the years ahead.
That's because your education system sucks.
The US should have entered the 5th Level Economy in the mid-1990s, but instead, the US stagnated as its education system both public primary and secondary education as well as university-level education collapsed.
Had you entered the 5th Level Economy in the mid-1990s like you were supposed to do, your manufacturing jobs would have been replaced on a nearly 1:1 ratio with R&D jobs.
Quote:
Originally Posted by Lycanmaster
Via e-mail, he spelled out his concerns: "Dealing with the growing inequality...
More than half of ALL business startups go bankrupt, always been that way.
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