Feeling Poorer these days? (unemployment, gas price, wage, legal)

[BigJon3475]

Originally Posted by emilybh

Feeling poor isn't a figment of your imagination. This Christian Science Monitor article confirms the drop in our standard of living. Evidently it is the worst drop since they started measuring such statistics.

We can thank the Federal Reserve for the declining purchasing power of the dollar it if the truth be told.

News Headlines

"...... Mr. Kowal earns 28 percent less than at his last job.He and his wife now eat out once a month instead of once a week, do no socializing, and eat less expensive foods, such as ground chuck instead of ground sirloin. "My mom was hoping her kids would lead a better life than her, but so far that has not happened," says Kowal....."

You haven't even seen real inflation yet. You've seen cost inflation rise due to a number of different reasons but real inflation isn't one of them.

[BigJon3475]

Originally Posted by HappyTexan

And I'll wager a good chunk comes from the border states.
My supermarket has a dedicated line at customer service on the weekends just for Western Union wires to Mexico with the forms pre-printed for them.
I know because I asked during the week what that dedicated line was for and why it was so busy. I really had no clue but it sure was a wakeup call.
Lots of US money flowing "back home" from these people, probably to take care of their families, extended families.
And it's a 100% cash transaction.

That would be money flowing out of the country which isn't going to decrease the value of the dollar. If anything it would increase it because it's becoming more scarce.

[BigJon3475]

Originally Posted by Taratova

22 trillion dollars have been wired to Mexico since 1997.. 22 trillion dollars not circulating in our economy.

That would be deflation which would increase the value of a dollar. There would be less dollars in the hands of the people.

[BigJon3475]

Originally Posted by emilybh

Yes I have commented on it. I said that people are spending more because of inflation, they aren't getting more stuff. House prices are still artificially high. Education costs have skyrocketed because the banksters now provide government backed student loans. Technology has advanced so sure we have more gadgets but if we can afford them today, if they were available a hundred years ago for what we pay for them today, with the vastly greater purchasing power of the dollar back then people would have been able to afford 30 times as many as we can afford today. The prices of appliances have come way way down since the old days and even in the old days people had all the latest appliances. The electronics industry is a good example of how the price trends of of all consumer items should be if the economy was healthy.

If what you were saying were true about living more lavishly today, there wouldn't be Occupy Wall Street going on. We'd all have staffs to handle our chores like so many did in the late 1800s. I think having a staff is a bit more expensive than your cable TV. People owned expensive musical instruments and yachts and art back then that many can only dream of. I even remember paying in the early 1990s, over $2000 for a monochrome Dell notebook computer with Windows 3.0 and it had a 40 MG hard drive. You wouldn't pay $25 for something like that today.

I don't think you have the foggiest idea what you are talking about regarding living more lavishly today.... unless you were on the receiving end of the bailouts. I highly doubt most people living in a 3000 square foot house could pay cash for a 900 square foot house unless they are near retirement. You aren't living more lavishly if it takes two people to provide what one person could easily provide when the dollar had some purchasing power. Haven't you heard? Most people would have trouble coming up with $2000 in an emergency.

That's credit inflation. Not something you're particularly having problems with right this second as Americans. Four years ago, not so much.

[Katarina Witt]

Feeling Poorer these days?

No. We have more money than we ever had.

[Mircea]

Originally Posted by emilybh

We can thank the Federal Reserve for the declining purchasing power of the dollar it if the truth be told.

The central bank has nothing to do with it.

Originally Posted by Had2SaySumthin

The smart thing to do is buy as many homes as you can possibly afford. We've hit bottom, and we're poised to see sizable growth over the next 3 to 5 years.

That would be wrong.

As I said 6 months ago, your housing market is in the gutter for the rest of the decade, and about a month ago, dozens of market analysts and economists finally agreed with me.

From: 10-01-2011, 12:04 PM

Originally Posted by Mircea

Am I freaking awesome or what?

You can spin it anyway you want, but the numbers don't lie. All the numbers I've been playing with for the last several years all said the same thing, no recovery in the housing market until at least 2020.

Housing Prices Unlikely to Recover Before 2020, FICO Survey Finds

73% of bankers surveyed see elevated level of mortgage foreclosures for at least five years

Housing Prices Unlikely to Recover Before 2020, FICO Survey Finds

Also:

CNBC Mobile Home

Fannie Mae Seeks $5.1 Billion More From Taxpayers

Mortgage finance giant Fannie Mae said it would ask for an additional $5.1 billion from taxpayers as a weaker housing market causes continued losses on loans made prior to 2009.

The largest U.S. residential mortgage funds provider on Friday also reported a second-quarter net loss attributable to common shareholders of $5.2 billion, or 90 cents per share.

Fannie Mae Seeks $5.1 Billion More From Taxpayers

Originally Posted by hnsq

We haven't hit bottom with the housing market...nowhere near it.

Not even close. It will get worse.

Originally Posted by mhouse2001

We are in uncharted territory. To rely on history to determine the future is not wise.

Okay, but you can learn from history.

Originally Posted by emilybh

The problem is your investments in stocks are still denominated in dollars. If the dollar becomes worthless, so are your investments. That is why we need to END THE FED (LIKE YESTERDAY!)

Your Dollars will not become worthless. And you want to replace the central bank with what, exactly? The same Congress that spent all of your Social Security Trust Fund and who buried you in debt?

Oh, that's brilliant. The central bank does exactly what every central bank in the world does, mostly fix your mistakes.

Originally Posted by mhouse2001

You can't deny that the economy is designed to keep the poor in poverty and the rich wealthy.

You most certainly can deny it, especially if you live in reality and are not tripping on Orange Barrel.

Originally Posted by mhouse2001

There's no real mobility except in extreme cases and the "hard work" ethic might as well be considered a lie.

Fair enough. There is mobility, but it has become very difficult of late. That has nothing to do with anything other than the world is changing (for the better).

Originally Posted by mhouse2001

We have surrounded ourselves with the illusion of wealth but are poorer overall.

Impressive.

Originally Posted by mhouse2001

Today, two incomes are necessary and our savings rate is negative.

No, two incomes are not necessary. It only appears that they are necessary, in order to live your illusory life-style. You live in a disposable society, even though it isn't necessary. Most of your wealth you squander and fritter away on disposable items that are totally unnecessary.

If you're going to spend $5.95 buying Cholorx Brand Orange-scented Kitchen Wipes With Aloe and Anti-Bacterial Agent every week, then you're throwing away money, because you could buy 3 cloths for $0.99 and use them for several years.

That is a mere one example out of more than 100 examples I could give where you literally throw away your money.

And then you have the unmitigated gall to whine and cry that you have no money. You have more than enough money, you just don't know how to use it to your advantage.

Originally Posted by Randomstudent

Investing in the stock market more? Are you joking.

I rarely do stocks, but I told someone to buy Chiquita when it was $0.03/share.

It closed yesterday at $8.91/share.

Just think, if you bought $1,000 worth of shares you'd have $297,000 right now.

Originally Posted by hnsq

House sizes have increased.

Uh, no.

An increase would be like 1,400 sq ft to 1,700 sq ft.

We're talking about McMansions that have nearly doubled and tripled in size. 15 years ago my father bought a brand new home and it's 2,400 sq ft. The McMansions in the next subdivision over are 4,100 sq ft. That's really outrageous. What a waste of resources.

Originally Posted by hnsq

The average number of cars per household has increased.

1974 I believe was the year that 51% of households had two cars. The "two car family" was a big deal, almost as big a deal as having your own private phone line instead of sharing a party-line.

4-5 cars is "normal" now, but is it necessary? No, absolutely not. I ride the bus through McMansionville and there's a family of 3 with 5 cars. And the kid isn't even 16 yet. His and her SUVs and his and her sports cars and then the "family car."

Originally Posted by emilybh

All you need to look at is the change in the purchasing power of the dollar which is what this site shows over time to see that I'm right.

You're wrong, and without the Federal Reserve, you wouldn't be on the internet. You wouldn't have cell-phones either.

Originally Posted by hnsq

I am not contesting the fact that the establishment of the FED and removing the gold standard was a poor economic choice.

You can't have credit cards or credit and the gold standard.

The reason you have credit cards and you can buy a home with 0%-20% down and buy a car with nothing down and pay for it for 72 months is because you have fractional reserve banking. On the gold standard, your money supply can grow if and only if the value of gold rises or you acquire more gold.

Very little credit, and what credit exists comes with an exorbitantly high interest rate.

Originally Posted by stan4

That's fine. It's the worst drop because the american middle class has been living in a fake wonderland of riches WAY above their means. Many of them still are. They have an effed up idea of what is a want and what is a need.

That is the precisely the case.

Originally Posted by hnsq

Your last line is complete bulls**t. Many people CAN afford to buy that 900 sqft home, but they want to live in the 3000 sqft house in the suburbs instead, and they go deep into debt to do it.

That is correct.

What were once luxuries are now "necessary vices" so cry the Jones'.

Originally Posted by emilybh

People buying foreclosures are taking advantage of others misfortunes that happened as a result of the banksters taking advantage via the blessings of the Federal Government ie Bill Clinton and Barney Frank... and all of that was CAUSED by the Federal Reserve artificially trying to manage the market.

Not really. People weren't buying homes and then being foreclosed 6 months later. People were buying homes, and then after 5-10 years they were using the equity to get "credit card debt consolidation" loans, ie a 2nd Mortgage and some even a 3rd Mortgage.

A default on the 3rd Mortgage is the same as defaulting on the 1st Mortgage.

Originally Posted by emilybh

Take the Federal Reserve and the Federal Government out of the equation, and the interest rates and housing prices would settle where they are supposed to be by Free Market forces and the market would THRIVE like it did 100 years ago before they established the Federal Reserve.

Not necessarily. Even when the Prime Rate was 13% back in the late 1970s and early 1980s, banks were still offering mortgages in the 4% to 6% range.

Originally Posted by BigJon3475

You haven't even seen real inflation yet. You've seen cost inflation rise due to a number of different reasons but real inflation isn't one of them.

That is absolutely right.

[davehalo]

Originally Posted by RCCCB

True, turning over money to the government is like giving it to crack whores (spending wise). No control, restraint, responsibility or wisdom; but they want more and more of it unwilling to shrink their unneeded role.

gave you a pos+ vibe...then re-read the post and had a thought

the whole essence of capitalism and economics rides on the basic principle of GROWTH. the economy must grow if everything is to remain healthy and in balance. the biggest driver to economic growth is continued population growth. need more jobs, goods and services for the ever expanding job base.

now therein lies a problem both for the public sector and private sector.

you cant create public services and not expect costs to increase
you cant build infrastructure and then not plan for the OMR costs
etc etc etc

so how does one 'shrink' government when the population it now serves is so large and growing?

[slackjaw]

Originally Posted by 20yrsinBranson

Wait, let me email this to a dentist friend of mine who lost EVERYTHING he had in the stock market. I'm sure he'll get a real kick out of it.

I'm not sure what your point is here, given that this is a response to hsnq pointing out average historical stock market returns.

Your dentist friend's problem wasn't the stock market, it was that he/she was a fool, a greedy fool who would have had to make extremely stupid, aggressive, and risky investments to lost everything. Hell you could have had 100% of your money in a total market index fund and from peak in 2007 to bottom in 2009 you'd still have only lost about 50%, and it would have gained most of that back by 2011.

Don't conflate historical stock market performance with some dentist who's a poor investor.

[slackjaw]

Originally Posted by emilybh

Example: Buy paper towels and stock up. You could easily see a cost increase of double what it is today in two years or more. That would be the equivalent of a 100% gain of your stock investment over two years.

You are hedging on a annual rate of inflation for paper towels to be about 50%, which I'd guess is unprecedented and unlikely to occur anytime in the near future.

Those paper towels will come in handy though when you are forced to work cleaning houses at age 85 because you spent your money filling your garage with them instead of engaging in a more prudent retirement plan.

Originally Posted by emilybh

Those were the days when you could arrive 10 mins before your flight to Europe took off and they would still let you on the plane and there was ZERO SECURITY. That was a time when we still had some semblance of FREEDOM in this country. You also got some decent meals on the plane included with the price of your ticket and you could bring whatever liquids you wanted on board.

That flight to Europe "back in the good ole days" cost far more than it does today, and meals on flights to Europe are still included with the price of your ticket.

[Finn_Jarber]

Originally Posted by GregW

When wealth is transferred from the creators to the manipulators the overall standard of living decreases. I remember having much lower wages but greater prosperity in 1980 than 2010.

Standard of living peaked in 1950s and has been on a decline ever since.