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Old 05-11-2018, 03:36 AM
 
Location: Silicon Valley
2,775 posts, read 1,223,004 times
Reputation: 5100

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Quote:
Originally Posted by hitpausebutton2 View Post
If your sitting on alot of money in the bank or couch, are you the partial reason for inflation?
If you took your cash out of the bank and hid it in your couch, you would have eliminated the ability of the bank to generate loans on that money, so in theory that would be deflationary.

Hence, when the country is in recession, I try to find all my coin stashes that build up around the house and spend them. It's my little part in helping the economy grow.
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Old 05-11-2018, 08:24 AM
 
5,607 posts, read 4,168,407 times
Reputation: 12348
Quote:
Originally Posted by hitpausebutton2 View Post
So when has this happen, because all i am seeing is price jumps? Everything is higher now then it was 2-4 years ago, production is still high, so if they are spitting them out faster then they can sell, then why keep prices high?


Because demand is high. Think of it this way: If the demand for people with your skill set was high and few had those skills, employers would be paying high wages to attract and keep employees. You’d expect to be paid more because demand is high and supply is low. You are in demand. Would you refuse a larger salary in that scenario? You’d be crazy if you did.

Things you buy are no different. Sometimes prices increase due to increases in the cost of raw materials, production, labor, transportation and overhead. And sometimes even when costs to manufacture are static, prices rise because demand for the product is high. Even if the factory is running 24/7 and cranking out the product, if it’s selling at a high volume the price will remain high. The laws of supply and demand are always at play.

I’m sorry you feel people are being unkind to you, but after many threads and posts showing how little you understand about economic issues, people (including me) get frustrated. The economy is never going to arrange itself to suit each persons ideal version of it. You need to understand how things work and proceed as an informed consumer especially if you intend to buy a house. To do otherwise will get you in trouble. To continue to insist things should work in ways counter to economic theory will get you nowhere. Five years from now you’d still be creating threads on how you wish the world worked and not accomplished a thing by doing so.
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Old 05-11-2018, 08:57 AM
 
8,301 posts, read 3,466,952 times
Reputation: 1589
Quote:
Originally Posted by pittsflyer View Post
Job insecurity I would think would be the main reason not to take on a 15-30 year debt. How sure are you that you wont be laid off within a 30 year period?
A big one.

My nurse of many years is finally buying her own place. She just parted with me just this week to work with a partner, since I am cutting back towards retirement. She will need longer term employment/cash flow.
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Old 05-11-2018, 09:05 AM
 
8,301 posts, read 3,466,952 times
Reputation: 1589
Quote:
Originally Posted by artillery77 View Post
If you took your cash out of the bank and hid it in your couch, you would have eliminated the ability of the bank to generate loans on that money, so in theory that would be deflationary.

Hence, when the country is in recession, I try to find all my coin stashes that build up around the house and spend them. It's my little part in helping the economy grow.

Hiding money in your couch means less consumer spending and is deflationary. Finding lost money in your house and spending it is the opposite.

Regardless of either scenario banks can still make loans because they have excess reserves from QE. Banks are limited in lending only by the numbers of qualified borrowers/loans.

Loans create deposits. The banks don't need our money to loan.

http://www.theguardian.com/commentis...land-austerity
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Old 05-11-2018, 09:23 AM
 
Location: Silicon Valley
2,775 posts, read 1,223,004 times
Reputation: 5100
Quote:
Originally Posted by Hoonose View Post
Hiding money in your couch means less consumer spending and is deflationary. Finding lost money in your house and spending it is the opposite.

Regardless of either scenario banks can still make loans because they have excess reserves from QE. Banks are limited in lending only by the numbers of qualified borrowers/loans.

Loans create deposits. The banks don't need our money to loan.

http://www.theguardian.com/commentis...land-austerity
Thank you for repeating what I said.

and not all loans are home loans the government will buy from originators. Qualifying home loans are funded because of Freddie and Fannie buying them, not because of QE. QE, which is being reversed, was the Feds finding a whole pile of money in their respective couch to offset a bunch of money that was being pulled out in other ways, but with lots of strings attached to prevent it from causing runaway inflation.
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Old 05-11-2018, 10:03 AM
 
8,301 posts, read 3,466,952 times
Reputation: 1589
Quote:
Originally Posted by artillery77 View Post
Thank you for repeating what I said.

and not all loans are home loans the government will buy from originators. Qualifying home loans are funded because of Freddie and Fannie buying them, not because of QE. QE, which is being reversed, was the Feds finding a whole pile of money in their respective couch to offset a bunch of money that was being pulled out in other ways, but with lots of strings attached to prevent it from causing runaway inflation.
I don't know that all mortgages get sold off by banks. But Fannie and Freddie certainly can help.

QE was money created from thin air. No couch was needed.

The 'other ways' money was being used was debt paper. Treasuries and mortgages. The Fed traded the new QE money for those, dollar for dollar.

Runaway inflation didn't happen because demands remained low, and there simply weren't enough qualified buyers to move those now excess bank reserves out into the general population.
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Old 05-11-2018, 04:13 PM
 
16,531 posts, read 17,592,629 times
Reputation: 23670
Quote:
Originally Posted by hitpausebutton2 View Post
If your sitting on alot of money in the bank or couch, are you the partial reason for inflation?
Like literally stacks of cash under the mattress? Makes no sense. Gotta put the money somewhere good house retirement
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Old 05-11-2018, 04:55 PM
 
2,360 posts, read 1,034,056 times
Reputation: 2071
Quote:
Originally Posted by Electrician4you View Post
Like literally stacks of cash under the mattress? Makes no sense. Gotta put the money somewhere good house retirement
cash is great to have vs putting in a bank were they have to report all accounts over x amount and IRS making you pay taxes on it. If i had a millions bucks, u betta i would have it in cash under a mattress.. no way for the irs would know what i earn each year.
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Old 05-11-2018, 05:03 PM
 
2,360 posts, read 1,034,056 times
Reputation: 2071
Quote:
Originally Posted by UNC4Me View Post
[/u][/b]

Because demand is high. Think of it this way: If the demand for people with your skill set was high and few had those skills, employers would be paying high wages to attract and keep employees. Youd expect to be paid more because demand is high and supply is low. You are in demand. Would you refuse a larger salary in that scenario? Youd be crazy if you did.

Things you buy are no different. Sometimes prices increase due to increases in the cost of raw materials, production, labor, transportation and overhead. And sometimes even when costs to manufacture are static, prices rise because demand for the product is high. Even if the factory is running 24/7 and cranking out the product, if its selling at a high volume the price will remain high. The laws of supply and demand are always at play.

Im sorry you feel people are being unkind to you, but after many threads and posts showing how little you understand about economic issues, people (including me) get frustrated. The economy is never going to arrange itself to suit each persons ideal version of it. You need to understand how things work and proceed as an informed consumer especially if you intend to buy a house. To do otherwise will get you in trouble. To continue to insist things should work in ways counter to economic theory will get you nowhere. Five years from now youd still be creating threads on how you wish the world worked and not accomplished a thing by doing so.
5 years from now, i expect to be alive period.. I know im not economics smart to your terms, but smart enough to make business decisions on what networking/IT/infrastructure deals get done. Manage a 400 personal team to wire up (wifi for their ipads/levi dept) every JCP store in America, till they bounced a 8 million dollar check. Had to take them to court, (company I worked for), to get it resolved plus another 2 million for contract violations.

But funny you think Im not going anywhere, and surprised my self when I was handed a new offer letter today for %10 raise now, and double time for holiday work vs time and half. Moved up to second in command for our dept for technical training. So yea, in 5 years if job goes well like it is now, i expect to be project manager of a muli-million dollar company. ( fortune 100).
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Old 05-11-2018, 05:05 PM
 
Location: Omaha, Nebraska
6,318 posts, read 3,495,835 times
Reputation: 15037
Quote:
Originally Posted by hitpausebutton2 View Post
cash is great to have vs putting in a bank were they have to report all accounts over x amount and IRS making you pay taxes on it.
Paying a modest amount of taxes on interest is better than losing the entire stash to a house fire or a burglary.

Quote:
If i had a millions bucks, u betta i would have it in cash under a mattress.. no way for the irs would know what i earn each year.
You'd be surprised what the IRS can learn about your financial situation without even looking at your tax return. Remember, the individuals and businesses you work for also file tax returns, and the IRS can both read and add...
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