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Your pipe dream of having a $30hr minimum wage job is simply not going to happen, so you would do yourself a favor by not continuing to repeat it in every post you make.
Inflation is not an easy way out,
I never said it was. But it is far faster than deflation and it tends to have full employment as well.
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Originally Posted by jimhcom
and if you truly understood economics, you would know that.
The fed targeted wage price stability as they printed enough money to grow the economy. This was the policy from 1981 until the dot com bubble popped in 1999. With this you had GDP inflate by 200% relative to inflation but the average wage for male workers was constant adjusted for inflation. The debt went up but the wages didn't go up in lock step.
Quote:
Originally Posted by jimhcom
In economics like every other mathematical equation, for every action there is a reaction. The action in this case was a massive bubble of debt and unearned consumption.
http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg The bubble that you are talking about is 30 years in the making. The difference between inflation and a bubble is that with inflation wages keep up with consumption and debt. You can turn a bubble into inflation after the fact.
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Originally Posted by jimhcom
The reaction is a period of deflation to balance the books.
You can use inflation to balance the books as well. You need the total debt to be coming down but that is measured in % of GDP not in nominal dollars. If you inflate the economy faster than you inflate debt then you can have full employment and a collapsing debt bubble. (That is my dream full employment.)
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Originally Posted by jimhcom
Another period of inflation only increases the bill to be paid latter.
It depends on how you get the inflation, and what you inflate. If you loan a bunch of money on houses you get house price inflation (bubble). If you put a bunch of money into the stock market you get a stock bubble. With houses what brings the price of houses back down is that you can't sustain a house price to household income ration above 3:1. Above that ratio and too much money goes into interest on mortgage payments and the economy contracts. If you increase wages you don't need the price of houses to come down. It can take 20 years or more to work through a downward correction in house prices. That is how long Japan has been at it. If you increase wages to support the price of houses at the peak of the last bubble then the needed market correction is up from where the prices are currently at instead of down. This is far faster. Normal inflation is driven by too much money in circulation. We don't have enough money in circulation.
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Originally Posted by jimhcom
We are already dangerously close to being incapable of paying that bill now.
In my opinion we are past the point where we can pay the bill. What we need to do is to reset the income distribution so that we can pay the bill. Back in the 1950's the minimum wage was at about 55% of the average hourly wage. Assuming that the top end doesn't move if you up the minimum wage by 4X then it would not quite be back where it was then. You get a 2X on the average wage and we are at a minimum wage of about 25% of the average wage. That would put the minimum wage at 50% of the average wage after the inflation worked its way through.
The old theory on the national debt was that if you keep adding to the national debt at a rate slower than the economy grew you never needed to pay it back. (I think that you still need to pay it back.) What you can do with inflation is you can cut the value of the current debt in half. This is the theory that was been economic policy for the land we live in for all my life.
I never said it was. But it is far faster than deflation and it tends to have full employment as well.The fed targeted wage price stability as they printed enough money to grow the economy. This was the policy from 1981 until the dot com bubble popped in 1999. With this you had GDP inflate by 200% relative to inflation but the average wage for male workers was constant adjusted for inflation. The debt went up but the wages didn't go up in lock step. http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg The bubble that you are talking about is 30 years in the making. The difference between inflation and a bubble is that with inflation wages keep up with consumption and debt. You can turn a bubble into inflation after the fact.You can use inflation to balance the books as well. You need the total debt to be coming down but that is measured in % of GDP not in nominal dollars. If you inflate the economy faster than you inflate debt then you can have full employment and a collapsing debt bubble. (That is my dream full employment.)
It depends on how you get the inflation, and what you inflate. If you loan a bunch of money on houses you get house price inflation (bubble). If you put a bunch of money into the stock market you get a stock bubble. With houses what brings the price of houses back down is that you can't sustain a house price to household income ration above 3:1. Above that ratio and too much money goes into interest on mortgage payments and the economy contracts. If you increase wages you don't need the price of houses to come down. It can take 20 years or more to work through a downward correction in house prices. That is how long Japan has been at it. If you increase wages to support the price of houses at the peak of the last bubble then the needed market correction is up from where the prices are currently at instead of down. This is far faster. Normal inflation is driven by too much money in circulation. We don't have enough money in circulation.
In my opinion we are past the point where we can pay the bill. What we need to do is to reset the income distribution so that we can pay the bill. Back in the 1950's the minimum wage was at about 55% of the average hourly wage. Assuming that the top end doesn't move if you up the minimum wage by 4X then it would not quite be back where it was then. You get a 2X on the average wage and we are at a minimum wage of about 25% of the average wage. That would put the minimum wage at 50% of the average wage after the inflation worked its way through.
The old theory on the national debt was that if you keep adding to the national debt at a rate slower than the economy grew you never needed to pay it back. (I think that you still need to pay it back.) What you can do with inflation is you can cut the value of the current debt in half. This is the theory that was been economic policy for the land we live in for all my life.
Do you mind if I ask your age? The reason I ask, is that your fascination with inflation makes me tend to believe you were not of working age during the high inflation of the 70's.
I am seeing a belief in inflation today that reminds me of the belief in borrowing I witnessed during the housing boom.
The notion that wages keep pace with inflation is completely false. They do not.
Our economic problems are not a result of the lack of inflation. They are a result of poor economic policy that encourages outsourcing of jobs and corporate structure.
Increasing inflation does not create jobs, it destroys them.
If you really want to increase wages, the way to do it is by getting rid of the trade agreements that make it profitable for corporations to offshore production while simultaneously exploiting the domestic market.
If you want an example of a successful, prosperous, first world economy, look to Germany as an example. They protect their domestic workers by trade policies that prevent the very kind of outsourcing production for domestic production that is killing the American economy. Our current economic policies are making robber barons of the wealthy at the expense of our people. Our biggest economic asset is our market place. To give away that marketplace as if it has no value is just stupid.
Do you mind if I ask your age? The reason I ask, is that your fascination with inflation makes me tend to believe you were not of working age during the high inflation of the 70's.
I am seeing a belief in inflation today that reminds me of the belief in borrowing I witnessed during the housing boom.
The notion that wages keep pace with inflation is completely false. They do not.
Yeah, you can always tell a kid -- but you can't tell them much.
Quote:
Our economic problems are not a result of the lack of inflation. They are a result of poor economic policy that encourages outsourcing of jobs and corporate structure.
Increasing inflation does not create jobs, it destroys them.
If you really want to increase wages, the way to do it is by getting rid of the trade agreements that make it profitable for corporations to offshore production while simultaneously exploiting the domestic market.
If you want an example of a successful, prosperous, first world economy, look to Germany as an example. They protect their domestic workers by trade policies that prevent the very kind of outsourcing production for domestic production that is killing the American economy. Our current economic policies are making robber barons of the wealthy at the expense of our people. Our biggest economic asset is our market place. To give away that marketplace as if it has no value is just stupid.
A+ A+ A+
Good Gordy, Jim.
When you hit it, it's a Grand Slam outta the Park.
so the owner of the unit was never foreclosed on, and wasn't making his/her HOA payments also? why would that result in sueing the bank? wouldn't they sue the owner for payments? this is odd to me.
When a homeowner fails to make HOA payments, The HOA files a lien against the home. If they also do not pay their mortgage, the bank will foreclose. When the bank forecloses, the HOA lien is removed and the HOA does not get paid the dues owed it. So then the HOA has to jack up dues for everybody else or cut services. We had to pay higher dues to have the swimming pool this summer because of this.
The PROBLEM is that banks do not want the REO inventory on their sheets so they are not foreclosing. Some owners are sitting in houses not paying anything to the bank or the HOA for 2 or more years! That means the HOA gets no dues for years and they are rightfully sick of it and so are we who have to pay more and more to make it up.
The notion that wages keep pace with inflation is completely false. They do not.
If you get inflation by raising wages then wage lead inflation not lag it. Or the tendency is there to get that.
Quote:
Originally Posted by jimhcom
Do you mind if I ask your age? The reason I ask, is that your fascination with inflation makes me tend to believe you were not of working age during the high inflation of the 70's.
Age 44 I didn't live through the high inflation of the 1970's as a worker.
But you are correct in thinking about then vs. now. But looking at the 1930's is a better place to look. Then we had unemployment in the 20% range. Now we have unemployment in the 20% range according to shadow stats. See the difference in the length of the bad times? I'll take the high inflation.
Quote:
Originally Posted by jimhcom
I am seeing a belief in inflation today that reminds me of the belief in borrowing I witnessed during the housing boom.
The notion that wages keep pace with inflation is completely false. They do not.
Our economic problems are not a result of the lack of inflation. They are a result of poor economic policy that encourages outsourcing of jobs and corporate structure.
I am not just in favore of uppin gthe minimum wage I'm also in favor of a bunch of other things that will tend to get economic health.
Quote:
Originally Posted by jimhcom
Increasing inflation does not create jobs, it destroys them.
It depends on how you get the inflation. If you get inflation by saying that the future price of labor is going to be higher than the current cost of labor then making things now for sale later is the ting to do. The tends to get you full employment. If you get inflation by loaning out too much money then you get problems.
Quote:
Originally Posted by jimhcom
If you really want to increase wages, the way to do it is by getting rid of the trade agreements that make it profitable for corporations to offshore production while simultaneously exploiting the domestic market.
A high savings rate would do the same thing and it wouold tend to limit domestic consumption as well.
Quote:
Originally Posted by jimhcom
If you want an example of a successful, prosperous, first world economy, look to Germany as an example. They protect their domestic workers by trade policies that prevent the very kind of outsourcing production for domestic production that is killing the American economy. Our current economic policies are making robber barons of the wealthy at the expense of our people. Our biggest economic asset is our market place. To give away that marketplace as if it has no value is just stupid.
They also have a high national savings rate. If you save more money than the domestic demand for debt then the difference tends to make debt in foreign countries. That tends to push exports.
This is a very interesting case, as it sets precedent that a bank sitting on a property without trying to sell it, abandons its interest in that property.
This may be an important development in facilitating the much needed bottoming of the housing market.
If banks are left with the option of selling properties and taking some loss or loosing them in court cases and taking a total loss, it may prompt them to begin to unload their massive shadow inventories.
This case will apply not only to associations, but anyone else having liens against foreclosed properties including local governments, etc.
The reality is they will inload those in budles because of the cost of unbundling them;that means investment groups will be buyers likely. It does not bode well for the average homeburer at all.Its unlikely to happen tho.This case could be in court on appeals for years t come anyway. I doubt the homeowners associations have the cash to see it thru.
The good news is that it is vital for the housing correction to balance out for the long run. Once the glut of unpaid mortgages are gone, the housing market will have to establish a going rate based on a true supply and demand instead of this artificial level we are still dealing with.
the bad news that will affect negatively the banks and the banking system and your retirement fund as well. You can't wait when the houses are going to be dirt cheap?
Sounds you are dreaming of another wave of banks' bail out.
The reality is they will inload those in budles because of the cost of unbundling them;that means investment groups will be buyers likely. It does not bode well for the average homeburer at all.Its unlikely to happen tho.This case could be in court on appeals for years t come anyway. I doubt the homeowners associations have the cash to see it thru.
It is costing more to foreclose on and sell some houses than they get selling them. Cheaper to walk away. So I think that the banks aren't going to fight this one very hard.
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