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More than half of ALL business startups go bankrupt, always been that way.
The issue here is the hundreds of billions of junk bonds that were sold to the public to finance these doomed corporations. These weren't Ma and Pa startups. What's more the lion's share of the better jobs that have been created by the Fed Ponzi scheme where created by the shale industry. It's all an illusion. At the end, the money was just another transfer of wealth from those desperately seeking higher yields to the Billionaires via financial engineering. The "industry" will vanish just like the secondary mortgage industry capitulated during the last bust.
I do wish people in general doesn't a little researching before posting. I have no idea how someone can draw an analogy between the effects of an shale industry bust to a normal retail clothing store closing down on 1st and Main?
So does this mean I'll be able to afford a house again here in Southern California soon?? Prices are above pre-2008 recession levels here. It's insane.
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.
Deflation is very hard on employment, and the bottom end. Inflation has its own troubles but tends to bring with it full employment. The choice between inflation vs. deflation is the choice between economic hard times with and without full employment. The Great Depression was deflation, that is the level of unemployment you can expect.
We are in for hard times we can't get around it. What kind of hard times we may be able to choose.
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. Unless you generate new debt to paper over the difference. But then what you get is less of the economy based on wages and more based on trading money.
That's not how it works and GWP is irrelevant.
If GWP goes up we have a globally growing economy. If GWP goes down we have a global recession. If GWP goes down we have hard times economically. So GWP may be irrelevant but only to someone that doesn't participate in the economy at all.
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Originally Posted by Mircea
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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.
Care to show your work to justify that? Here is mine. If you move a job from the US to some where else the person that had it becomes unemployed. The FED then loans out enough money to put that person back to work doing something else. Lately that something else has been a housing bubble. Also care to look at a graph of total debt % GDP? http://pringturner.com/book/wp-conte.../Chart-1-2.png The US has been blowing a debt bubble from 1981 on. During that time outsourcing was widely practiced. I know cassation and correlation.
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Originally Posted by Mircea
There's no relationship between wages and debt.
So why can't someone get a $million loan on a $7.25 an hr full time wage without assets or more future income?
You have to pay the debts with wages. "There is no relationship between wages and debts." really? The one pays off the other.
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Originally Posted by Mircea
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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.
And GWP isn't. Nice if GWP goes down we have economic hard times. If GWP goes up we don't.
So why would they get our wages? To keep us from having a global economic depression.
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Originally Posted by Mircea
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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.
Finally we agree on something. They would have wage inflation. And lots of it. Beets the fertilizer out of wage deflation. Wage inflation is the point.
But you wont admit to the point because you say that debts don't have to be paid by wages. As you say there is no relationship between debts and wages.
Where the analysis falls short is that it doesn't explain why, after trillions upon trillions of QE in the U.S., Europe, and Japan, are the economies all over the world collapsing? It is because the newly printed money is all going to the Billionaire Class creating historic concentration of wealth. Without purchasing power in the hands of the 99%, the economies cannot grow. They can grow if the 99% keep borrowing more and more but apparently we are close to peak debt everywhere. Thus we contraction. We have deflation because of the tremendous misallocation of capital causing massive oversoending and debt in the wrong places
Will this be a worldwide debt collapse or will regimes keep changing in countries? All totally unpredictable. What we do know is the QE does nothing to help economies otherwise we would be galloping along by this point.
You keep basing arguments on this middle class is tapped out theme, but consumer spending data shows reality doesn't align with what you claim.
I know, I know... cue the richrf "any data that isn't convenient for me must be fake propaganda" thing...
Yeah, things are so great they are talking about printing trillions more euros and yen as the Central Banks play tag team to b prop up your beloved stock market. Yep, it's all fine and dandy.
China's wages have risen considerably, rising from ~$3000 in 2006 (already well into the wage explosion) to ~$8500 in 2015. The jobs in the low wage markets are actually paying a lot more than they used to.
But the poster said that they would need the wages we were getting to make it work instead of all the gains going to the top 1% and the investors.
There is a big difference between the US and China still, and going from 1 dollar a day to 10 dollars a day for the average Chinese may be considerable but is still a joke.
The problem is the top 1% want all the gains and and nothing left for anyone else and then wonder why it does not work.
So does this mean I'll be able to afford a house again here in Southern California soon?? Prices are above pre-2008 recession levels here. It's insane.
Going back to the 1930's up until the 1980's when the Toxic Housing Mortgaged Backed Securities were created, the average yearly income to house prices was 2X.
That all changed with the Banker Games and they are keeping it propped up intentionally and out of the reach of the average American.
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Prices are above pre-2008 recession levels here. It's insane.
