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Old 10-08-2012, 01:01 PM
 
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whether you put your money in the bank and they buy longer term treasury bonds with your money and keep the difference on the spread and profit or you buy the bonds and profit i see no difference. banks borrow short and lend long.
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Old 10-08-2012, 02:01 PM
 
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Quote:
Originally Posted by pie_row View Post
No you just tolerate more economic rent by the rentier class than I do.
I was really looking at the point of view of what was supportable or an identifiable bubble. On the broader point I think probably that I am not particularly tolerant of rentiers either.

Either way, I like the attitude.
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Old 10-08-2012, 02:08 PM
 
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Quote:
Originally Posted by pie_row View Post
you are not looking long term. I am looking at how to grow the economy so that my grand kids will have the same standard of living that my parents had. The growth in the economy from 1981 on was influenced by the policies put into place. The trend has been for outsourcing. This grows the top at the expense of the middle. We are now top heavy. There will be a correction.

And here is why:


Trade Theory Financialized | Michael Hudson

Summary
Ricardian trade theory was based on the cost of labor at a time when grain and other consumer goods accounted for most subsistence spending. But today’s budgets are dominated by payments to the finance, insurance and real estate (FIRE) sector, and to newly privatized monopolies. This has made FIRE the determining factor in trade competitiveness.


Who is going to sell more apples? Someone who just grows them on free land or someone who grows them paying 1k per acre rent?






All the time I see because wages are lower elsewhere and people living on $5 a day. Well if you pay 1k a month in rent, you can't live on $5 a day.
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Old 10-08-2012, 02:10 PM
 
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well lets just have a depression so we can compete.

on the other hand there arent a whole lot of people who would be able to afford to buy much here today based on labor costs if it had to be made here.

if we had to cast our parts here which by the way we once did we would have to charge about 30-40% more
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Old 10-08-2012, 05:52 PM
 
Location: Brawndo-Thirst-Mutilator-Nation
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Quote:
Originally Posted by mathjak107 View Post
what area has housing back in a bubble ?

Well, I can tell you that in areas of California the markets are very, very competitive. The houses are being bid up way beyond what they should be considering the economic outlook of the USA. This is more speculation which could and probably will produce another housing bubble....maybe not as huge as the last one....but a bubble nonetheless.

So much cheap money floating around, Fannie & Freddie still injecting Billions upon Billions into the mortgage markets....not good.

The last massive housing bubble never truly deflated due to government interference....so another bubble would really just entail partially re-inflating the last one.
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Old 10-08-2012, 06:00 PM
 
Location: Brawndo-Thirst-Mutilator-Nation
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The policies of the federal Government did so much to create the housing bubble. Why do people thing that is is a good thing to have unaffordable housing.

The government artificially manipulates the mortgage markets, causing housing prices to become more and more unaffordable...........why is this good??? Well, it is great for speculators and folks who want to use their house as a source of equity. But what about the girl/guy who lives in an area where the cost of a starter house is artificially inflated to 200K, and they are making 25K..............that house is 8 times that poor persons annual income.

I think a lot of this sickness is all about government control, political posturing and unworkable/toxic ideology on the corrupt politicians behalf.
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Old 10-08-2012, 08:02 PM
 
Location: 3rd Rock fts
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Default Digital Deflation can’t fix this!

Quote:
Originally Posted by gwynedd1
Cash is relevant to the individual and certainly beneficial to that individual. However mixing the macro economy in that conversation completely changes this...but a macro economic policy to reward green paper savers is just silly in a slack economy
In other words, a “Beehive” structured Economy has no need for an individual’s financial freedom. As for the current slack economy: the feeding frenzy of the financial apparatus; enabled by consumer over-consumption, creates a false-reading of slack!



Quote:
Originally Posted by mathjak107
they put most or all of their assets in a bank and did the wrong thing. its a simple concept and requires no high level economics in the discussion about it.
The same could be said of stocks & retirement plans. Lucky the so-called investors have the FED/USGov’t/Taxpayer as their saviors. The 20th Century retirement plans need a conveyor belt of wage inflating, spending bodies. The current predicament of way too many people/not enough work is not going away for a long, long time.


Quote:
Originally Posted by mathjak107 View Post
your getting to deep and involved . its really not rocket science to do what best fits the times we are living in.

we are all responsible for our own financial well being and we need to take the right steps at the right time.

thats all in saying, it goes no deeper then that.

we go to where the food is.
This is right out of the American Indian playbook: the Bulls think they’re running/adapting to the times, when in actuality they’re being herded to the cliff up ahead.

I’m going to take the sage advice from the experienced contrarian Investors & not follow the herd—Cash is King.
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Old 10-09-2012, 02:44 AM
 
621 posts, read 592,806 times
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Quote:
Originally Posted by gwynedd1 View Post
And here is why:


...All the time I see because wages are lower elsewhere and people living on $5 a day. Well if you pay 1k a month in rent, you can't live on $5 a day.
The cost of the FIRE economy can be measured in total debt as % GDP. If you keep the total debt down to 125% of GDP then they can't be taking too much out of the economy. The FIRE economies cost structure goes up with total debt as % GDP.
Quote:
Originally Posted by mathjak107 View Post
well lets just have a depression so we can compete.
We have way to much debt. The second half of the Great Depression was bad because they went from about 300% of GDP as total debt to around 125% of GDP as total debt. That is what is coming and that is what the Fed is fighting. The total debt in % GDP is now closer to 400% of GDP. An economic depression is coming. Or a run on the dollar. Or both.
Quote:
Originally Posted by mathjak107 View Post

on the other hand there arent a whole lot of people who would be able to afford to buy much here today based on labor costs if it had to be made here.
That will change if we get a run on USD. That will tend to balance trade and be really hard on the economy.
Quote:
Originally Posted by mathjak107 View Post

if we had to cast our parts here which by the way we once did we would have to charge about 30-40% more
Yes and your workers would be buying stuff made here. Back in the 1950's the minimum wage adjusted for inflation would be about $12 to $15 an hr now. But if you try to set it high enough to be where it was you would need to put it at about $30 an hr. That would run your cost structure up a lot but the workers would have the wages to buy your product.



Quote:
Originally Posted by tickyul View Post
...
I think a lot of this sickness is all about government control, political posturing and unworkable/toxic ideology on the corrupt politicians behalf.
The Fed is privatively owned. Look at who is pulling the strings not at the puppet.
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Old 10-09-2012, 03:51 AM
 
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heres my opinion on the trade deficit. its all a bull-sh*t number.

back in the day we made it all and the world had nothing to offer us for sale

well we are no longer the prom queen and the world offers many world class products.

we buy foreign products for only 1 reason. each country has learned to excell at making something better and more economical then anywhere else.

i started buying my foreign cars decades ago because they represented to me the best value for my dollars.

i didnt by a foreign product because i expected the emporer of japan to buy something from me.

in a global economy you cant artificially prop up a country to make something unless they can do it better and more economical then anyone else.

this is how all our standards of living get elevated.

brazil tried to make it so you couldnt buy anything foreign if brazil had their own version. well that almost caused a collapse there.

factories like smith and wesson ,ibm and many others packed up and left as the inferior products brazil cranked out couldnt do the job.

at one time it used to cost me almost 200 bucks for a good pair of dress shoes. today the foreign ones i get for 80 bucks surpass the best of them.


the best of breed will always be the best of breed regardless of what country it comes from and we will always buy the best value out there.


if you found a foreign coin in your pocket you could only pass it off to someone if they were going to that country or they knew someone going.

well the dollar is accepted all over the world because eventually there is someone who is going to buy something from us.

those dollars we spend overseas eventually have to come back here or the process stops.

those dollars do in fact come back here . they are invested in our bonds ,in our stocks, and other investments that dont show up in the trade deficit numbers.

while the deficit numbers look good to talk about politically the fact is its all bull. we all benefit from world class products at better value for our money.

Last edited by mathjak107; 10-09-2012 at 04:16 AM..
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Old 10-09-2012, 03:53 AM
 
83,893 posts, read 81,474,565 times
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Quote:
Originally Posted by DSOs View Post
In other words, a “Beehive” structured Economy has no need for an individual’s financial freedom. As for the current slack economy: the feeding frenzy of the financial apparatus; enabled by consumer over-consumption, creates a false-reading of slack!



The same could be said of stocks & retirement plans. Lucky the so-called investors have the FED/USGov’t/Taxpayer as their saviors. The 20th Century retirement plans need a conveyor belt of wage inflating, spending bodies. The current predicament of way too many people/not enough work is not going away for a long, long time.


This is right out of the American Indian playbook: the Bulls think they’re running/adapting to the times, when in actuality they’re being herded to the cliff up ahead.

I’m going to take the sage advice from the experienced contrarian Investors & not follow the herd—Cash is King.
well if mr king cash is your only investment then all i can say is enjoy the return your getting on it .

let us know at retirement how that worked out for you.

actually the herd was wrong. the herd left the markets and fled to cash and they got burned for it.


dont forget we arent talking about people here who are sitting on cash awaiting re-investment , we are talking people who shun all risk all the time and are complaining about zero return as they sit in a bank as a strategy..

between having a total lack of financial knowledge, over spending and lack of investing and planning most folks commit their own financial suicide and have miserable retirements because of it.

more than 1/2 of americans have a retirement plan that is work until you cant.

like i said its not the money we are able to sock away in the bank from our pay checks that will make you financially self sufficiant.

its all about what you do with that money to grow it that will.

Last edited by mathjak107; 10-09-2012 at 04:53 AM..
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