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Old 10-08-2012, 09:37 AM
 
621 posts, read 591,543 times
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Quote:
Originally Posted by mathjak107 View Post
cash in the bank has nothing to do with balancing trade... what i think you mean is BOP , balance of payments but again that still has no merit .

as far as out sourcing keeping our money in bank has nothing to do with whether we out source or not.
If the savings rate in a country exceeds the borrowing rate then production tends to exceed consumption. The excess capital tends to buy debt in foreign countries that debt tends to finance consumption in excess of production there. You can say all you want about central banks printing money to fiddle with this but it largely still holds true.
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Old 10-08-2012, 09:46 AM
 
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Not true at all .there are far to many ways of accumulating savings other than the bank.
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Old 10-08-2012, 09:58 AM
 
621 posts, read 591,543 times
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Quote:
Originally Posted by tickyul View Post
YES, the Fed's are inflating a new bubble as we speak. More and more speculative investors...in some areas, are once again pushing housing into the bubble range.

This country cannot and will not fix structural problems.....
Well the people that are running things aren't going to do anything about it. So how about we fire them and hirer some people that will fix things?
Quote:
Originally Posted by tickyul View Post
quick and dirty is the best we can do.
The Fed is just following two presidential directives one wage/price stability, two keeping asset prices from falling. If you do those two things then what you get is what we have. The return to economic health requires that we pick one and go with it. I have been out of work for a long time and so I want full employment. I want the wages to support assets. With higher paying jobs being sent over seas then we need those jobs that are left to replace the dollar value of the income lost. The last I read the average total compensation was at about a $28hr equivalent. If you set the minimum wage above the current average wage then you will by statute give more than ½ the workers out there a raise. This will also put upward pressure on the rest of the wage structure.




Quote:
Originally Posted by mathjak107 View Post
what area has housing back in a bubble ?
OK did the price of houses fall out of bubble range? (Average house price / average household income, above 3.0 is bubble range.) If so then any upward movement is bubble blowing. (Without the wages to pay for it.)
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Old 10-08-2012, 10:05 AM
 
621 posts, read 591,543 times
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Quote:
Originally Posted by mathjak107 View Post
Not true at all .there are far to many ways of accumulating savings other than the bank.
This is too true. But if you put money in CDs in banks or credit unions then you tend to fight outsourcing. The return on your money is not measured in % return on your money it is measured in jobs not sent overseas. Looking at just where you get the highest dollar return is short sighted. Looking at where your money will get your grand kids work to do is also important.
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Old 10-08-2012, 10:09 AM
Status: "ABCDEFGplus" (set 10 days ago)
 
18,827 posts, read 16,672,291 times
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Quote:
Originally Posted by mathjak107 View Post
Not true at all .there are far to many ways of accumulating savings other than the bank.
How do you mean?

Saving is strictly a function of abstinence which is to leave resources on the market even though you have the buying power to claim them. The rate of return economically should be a cut of the marginal gain. For example if you wanted to use a bus ticket to ride to a ball game while someone else wanted it for something more important, then there is an economic gain from abstinence. In a slack economy there are lots of bus seats so there is little marginal gain from simple abstinence.

This is very different than investment which tend to spur basic consumption, for example if you decided to bus people over to a new business. Savings and investment are related, but they are really not quite the same thing.
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Old 10-08-2012, 10:15 AM
 
Location: 3rd Rock fts
748 posts, read 999,603 times
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Except for texdav’s post, all I hear is how it affects stocks, bonds, Banks, companies, strong dollar vs weak dollar; not much talk about individual/aggregate human leverage.

Possession of cash/liquid money is analogous to guns & ammo—it protects the individual from bandits & keeps the peace. Idle** savings; & minimal dependence on credit/debt, is the big stick the citizenry needs to keep the Gov’t/financial apparatus in check.

People who think cash is irrelevant:
DEBTORS
Credit dependant spendthrifts
Investors’ with under-performing retirement plans
Financial Apparatus
Banksters
Real Estate Industry
Automotive Industry
Healthcare Industry
Education Industry
FED/Gov’t (no choice—collectively, the citizenry are financially inept)
Big Business(?)

People who think cash is relevant:
Savers
Soros/Buffett/others of that ilk (no insult intended)
Home buyers that pay in full or substantial down payment
People who respect responsibility & limitations

**I used the word Idle savings to represent an invisible hand of the citizenry to combat the vulture appetite of the financial apparatus.
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Old 10-08-2012, 10:15 AM
Status: "ABCDEFGplus" (set 10 days ago)
 
18,827 posts, read 16,672,291 times
Reputation: 7329
Quote:
Originally Posted by mathjak107 View Post
what area has housing back in a bubble ?
Anywhere that has negative equity for one. I'd also say where the wage to housing ratio is over 4.


US Housing Crisis - Negative Equity Infographic - Zillow


In other words lots of places. I say we are about 1/3 of the way through. Said it would be over a decade in 2008. Nothing in what I see has changed.
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Old 10-08-2012, 10:20 AM
 
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Quote:
Originally Posted by gwynedd1 View Post
Anywhere that has negative equity for one. I'd also say where the wage to housing ratio is over 4.
I'm a bit more conservative at 3:1.
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Old 10-08-2012, 10:22 AM
Status: "ABCDEFGplus" (set 10 days ago)
 
18,827 posts, read 16,672,291 times
Reputation: 7329
Quote:
Originally Posted by DSOs View Post
Except for texdav’s post, all I hear is how it affects stocks, bonds, Banks, companies, strong dollar vs weak dollar; not much talk about individual/aggregate human leverage.

Possession of cash/liquid money is analogous to guns & ammo—it protects the individual from bandits & keeps the peace. Idle** savings; & minimal dependence on credit/debt, is the big stick the citizenry needs to keep the Gov’t/financial apparatus in check.

People who think cash is irrelevant:
DEBTORS
Credit dependant spendthrifts
Investors’ with under-performing retirement plans
Financial Apparatus
Banksters
Real Estate Industry
Automotive Industry
Healthcare Industry
Education Industry
FED/Gov’t (no choice—collectively, the citizenry are financially inept)
Big Business(?)

People who think cash is relevant:
Savers
Soros/Buffett/others of that ilk (no insult intended)
Home buyers that pay in full or substantial down payment
People who respect responsibility & limitations

**I used the word Idle savings to represent an invisible hand of the citizenry to combat the vulture appetite of the financial apparatus.
Cash is relevant to the individual and certainly beneficial to that individual. However mixing the macro economy in that conversation completely changes this. Where is the common interest in hoarding green paper? Its just debt based with no intrinsic value. The more I accumulate it only acts as leverage against someone else in the existing economy. To be sure I have a defensive posture for liquidity, but a macro economic policy to reward green paper savers is just silly in a slack economy. That is why you get nothing for it now. If we all save at the same rate, then apply Say's law. It goes nowhere. The only way to win is to save cash faster than someone else which increases their obligations to you. Its zero sum in a slack economy.
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Old 10-08-2012, 10:24 AM
Status: "ABCDEFGplus" (set 10 days ago)
 
18,827 posts, read 16,672,291 times
Reputation: 7329
Quote:
Originally Posted by pie_row View Post
I'm a bit more conservative at 3:1.
I am a bit more cynical I guess.
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