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Old 12-22-2010, 09:34 AM
 
2,515 posts, read 1,720,250 times
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Quote:
Originally Posted by InformedConsent View Post
And when prices increase as a result of increasing wages, what makes you think taking on more debt won't be necessary?
Taking on more debt is always necessary. What upping wages does is allow us to pay for more debt. The good paying jobs that have gone to China among other places have taken way part of our ability to pay for more debt. There was a paper written back in the 1950's that said that if you could find a sink for the debt you could run an economy forever on an expanding debt bubble. The sink is inflation. One way forward is uncontrolled hyper inflation, that is what we are headed for. Another way forward is controlled hyper inflation that is what I am talking about. Yet another way forward is to have an economic depression like the great depression, that is what the fed is trying to avoid and what they are doing is pushing us towards hyperinflation.

So do you want controlled hyperinflation or uncontrolled hyper inflation?
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Old 12-22-2010, 09:42 AM
 
66,289 posts, read 30,193,250 times
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Quote:
Originally Posted by newonecoming2 View Post
Taking on more debt is always necessary. What upping wages does is allow us to pay for more debt.
Your proposals do not account for the concurrent increase in prices. As I've already said many times, we're at margin collapse.
Quote:
Current-production cash flow (net cash flow with inventory valuation adjustment) -- the internal funds available to corporations for investment -- decreased $68.4 billion in the third quarter, in contrast to an increase of $61.1 billion in the second.
http://www.bea.gov/newsreleases/nati...dp3q10_3rd.pdf

The wage increase you propose will not be sufficient to service increased debt as prices also correspondingly increase.
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Old 12-22-2010, 10:05 AM
 
2,515 posts, read 1,720,250 times
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Quote:
Originally Posted by InformedConsent View Post
Your proposals do not account for the concurrent increase in prices. As I've already said many times, we're at margin collapse.

http://www.bea.gov/newsreleases/nati...dp3q10_3rd.pdf

The wage increase you propose will not be sufficient to service increased debt as prices also correspondingly increase.
What we are getting is prices going up without wages going up. This is in the wrong direction.

Reggie Middleton Boom Bust Blog - Sitemap (http://boombustblog.com/sitemap/2010/12/22/more-optimistic-fluff-and-spin-on-pessimistic-macro-numbers-this-type-of-reporting-simply-drives-the-more-intelligent-valuable-eyeballs-to-alternative-media-ex-blogs/ - broken link)

Here is a quote that was quoted in the link

“Stocks are up which means another fundamental data indicator must have missed expectations (following the earlier GDP miss). Sure enough, the NAR just reported November existing home sales, which came at 4.68 million units, a slight improvement to the almost all time lowest number posted in October (4.43 million), a miss to expectations of 4.75 million, and 27.9% off the cyclical peak of 6.49 million from November 2009, when the first-time buyer tax credit expired, and was shockingly not extended. The data follows this morning atrocious MBA numbers which showed a plunge of 18.6% in mortgage applications, and 24.6% drop in refinancings. But if you listen to Goldman, the recent surge in mortgage rates is actually beneficial for everyone involved and buy the f#&$ing dips! Sure enough, the ever cheerful Larry Yun had this to say: “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable.” Um, continuing gains from all time record low levels? Also, the part-time job creation which is the only thing that is being created on steady basis is sure to be the ground for a fertile surge in home prices. And with that the sarcasm is off.”


Here is what Reggie Middleton has to say


“I don’t believe “better” market conditions are coming any time soon. We are just coming off of the best market conditions anyone will see in their lifetime. Those market conditions were predicated upon unsustainable conditions, hence they came crashing down. They are crashing down, not crashed – as in past tense. I believe we have some ways to go. That is why I am not buying real estate, and I believe that those that are jumping in now are jumping in prematurely.”

The only way to get prolonged economic growth is to fix the housing bubble. The only way to fix the housing bubble quickly is to build a base under the housing prices to support the prices at their peak. The only tool that I am aware of to do this is the minimum wage law. Upping the minimum wage far enough to fix the housing bubble will not be without negative consequences. Those consequences are short term. A lot of those consequences can be addressed by an injection of cash into the consumer economy.
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Old 12-22-2010, 10:07 AM
 
66,289 posts, read 30,193,250 times
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Quote:
Originally Posted by newonecoming2 View Post
What we are getting is prices going up without wages going up. This is in the wrong direction.
How do you not understand that raising wages will push prices up even further, thus continuing in the wrong direction at an even higher rate?
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Old 12-22-2010, 10:12 AM
 
19,216 posts, read 12,962,326 times
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Quote:
Originally Posted by InformedConsent View Post
How do you not understand that raising wages will push prices up even further, thus continuing in the wrong direction at an even higher rate?
Prices up on imports?
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Old 12-22-2010, 10:17 AM
 
2,515 posts, read 1,720,250 times
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Quote:
Originally Posted by InformedConsent View Post
How do you not understand that raising wages will push prices up even further, thus continuing in the wrong direction at an even higher rate?
What is wrong is prices going up but wages as in employment is going down. You have been talking about price control you can't stop the rising tide. If your boat wont float then you have to pull it higher than the tide. The rising tide is what the fed is doing to try and stop the collapsing housing bubble. The rising prices is not what is going in the wrong direction it is the falling wages, as in increasing unemployment. (Then the new job doesn't pay what the old job did.)

The collapsing housing bubble is what is driving unemployment. It is taking money out of the consumer economy in the form of home equity. We need to be putting money back into the consumer economy faster than the collapsing housing bubble is taking it out.
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Old 12-22-2010, 10:18 AM
 
2,515 posts, read 1,720,250 times
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Quote:
Originally Posted by ergohead View Post
Prices up on imports?
Yep that is the fed's printing press at work.
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Old 12-22-2010, 10:22 AM
 
Location: Great State of Texas
86,093 posts, read 72,355,317 times
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Prices are rising on commodities as weather, availability and demand are all in play.
There is more demand for raw commodities which in turn results in higher prices.

Notice it's your food and fuel that's rising.
Not your homes, not the interest rate at your bank, not your salaries.
The basic necessities of life are rising due to higher commodity costs because of an expanding world population who are all demanding it.
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Old 12-22-2010, 10:27 AM
 
66,289 posts, read 30,193,250 times
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Quote:
Originally Posted by ergohead View Post
Prices up on imports?
Increasing wages in the U.S. will increase the prices on everything, including imports. The minimum wage employees at Walmart stock and sell imported merchandise, no?
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Old 12-22-2010, 10:30 AM
 
66,289 posts, read 30,193,250 times
Reputation: 8613
Quote:
Originally Posted by newonecoming2 View Post
What is wrong is prices going up but wages as in employment is going down. You have been talking about price control you can't stop the rising tide.
And you are ignoring the compounding effect on increasing prices that raising wages will have. You have not ever addressed that issue.
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