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Old 10-09-2012, 07:29 AM
 
6,979 posts, read 4,833,330 times
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Quote:
Originally Posted by mathjak107 View Post
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.
If you arent getting 3, 4 or 5% interest in a money market (like we used to a handful of years ago) and you know nothing about 'investing', how can you make it 'grow'? People dont want to take on risk, people dont want to wake up in the morning and have the stock market crash or whatever. Also, it takes many years 'learn' how to invest, no? So, you might say "hire someone who knows what they're doing" and i say to that, how do you know you can trust them?

I think people might be a little more apt to take on some risk if they felt like they had some clue as to what they were doing. When you have no clue, you just sit on your cash.
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Old 10-09-2012, 08:02 AM
 
84,087 posts, read 81,619,468 times
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Quote:
Originally Posted by wall st kid View Post
If you arent getting 3, 4 or 5% interest in a money market (like we used to a handful of years ago) and you know nothing about 'investing', how can you make it 'grow'? People dont want to take on risk, people dont want to wake up in the morning and have the stock market crash or whatever. Also, it takes many years 'learn' how to invest, no? So, you might say "hire someone who knows what they're doing" and i say to that, how do you know you can trust them?

I think people might be a little more apt to take on some risk if they felt like they had some clue as to what they were doing. When you have no clue, you just sit on your cash.
EXACTLEY MY POINT.

folks know more about their car or refrigerator then they do anything financial in their lives.

most dont want to know, dont want to learn and then when they make a poor choice its everyone elses fault.

years ago none of us ever read food labels, today we are all very aware of everything we eat.

the same has to be true of your finances or suffer the consequences.

we all need to know enough to get by in life today .

there is no such thing as any asset class that isnt risky at some stage and thats true of cash too.
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Old 10-09-2012, 01:09 PM
 
621 posts, read 593,001 times
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Quote:
Originally Posted by mathjak107 View Post
heres my opinion on the trade deficit. its all a bull-sh*t number.
Tell that to Greece. How you run a trade deficit is your trading partners loan you the money to buy their goods. Eventually the bill comes due. Greece can't print money so they can't inflate away the debt load they have accrued. Germany is also in trouble because they aren't going to get their principle back on the money they loaned out.
Quote:
Originally Posted by mathjak107 View Post

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.
Bull puckie. If you print money and use it to buy debt in a foreign country you can artificially push the balance of trade. That is what happened in the last housing bubble.
Quote:
Originally Posted by mathjak107 View Post

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.
There are two long term sustainable business models. Make a small number of products for the rich or a large number of products for the workers. What they are trying to do now is to make a large number of products for the rich, and that is us, and they aren't pay the workers enough to buy the products that they are making. This isn't 100% true but it has a lot of truth in it. The net result is that they can't afford to buy our products and we are running up a huge debt buying theirs.
Quote:
Originally Posted by mathjak107 View Post


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.
true but the best value is being manipulated by the central banks.
Quote:
Originally Posted by mathjak107 View Post


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.
This is the problem. We don't have the tax base to buy back our national debt with. When everyone figures this out we will get an event like Mexico in 1994. Our national debt is the world's reserve currency. Ready to play hot potato with USD?
Quote:
Originally Posted by mathjak107 View Post

those dollars we spend overseas eventually have to come back here or the process stops.
What has been happening is that foreign central banks have been printing money to buy our debt with. In 2008 the game was almost up. What I have been talking about is how to set things up so that the game wont stop. Balanced trade needs to happen. Balanced federal budget needs to happen, we need to start buying back our national debt. This will postpone the coming run and lessen its severity.
Quote:
Originally Posted by mathjak107 View Post

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.
They are buying our debt to finance our consumption of their goods.
Quote:
Originally Posted by mathjak107 View Post

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.
As long as trade is balanced. Germany is in trouble because they have run a trade surplus for too long. Greece is in trouble because they have run a deficit for to long. Trade neutral is the only long term sustainable thing to do.
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Old 10-09-2012, 07:07 PM
 
Location: Brawndo-Thirst-Mutilator-Nation
18,559 posts, read 18,709,043 times
Reputation: 15439
[quote=pie_row;26437087]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.
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.
That will change if we get a run on USD. That will tend to balance trade and be really hard on the economy.
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.



The Fed is privatively owned. Look at who is pulling the strings not at the puppet.[/quote]






Yeah, uh huh!!!

The Federal Reserve System is governed by the FRB.......member are appointed by
who?????????? Oh yeah, a corrupt politician titled POTUS.

The corrupt government is the dominant power in the USA, no matter what some tin-foil-hatter tells you.
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Old 10-10-2012, 03:19 AM
 
84,087 posts, read 81,619,468 times
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Quote:
Originally Posted by pie_row View Post
Tell that to Greece. How you run a trade deficit is your trading partners loan you the money to buy their goods. Eventually the bill comes due. Greece can't print money so they can't inflate away the debt load they have accrued. Germany is also in trouble because they aren't going to get their principle back on the money they loaned out.
Bull puckie. If you print money and use it to buy debt in a foreign country you can artificially push the balance of trade. That is what happened in the last housing bubble.
There are two long term sustainable business models. Make a small number of products for the rich or a large number of products for the workers. What they are trying to do now is to make a large number of products for the rich, and that is us, and they aren't pay the workers enough to buy the products that they are making. This isn't 100% true but it has a lot of truth in it. The net result is that they can't afford to buy our products and we are running up a huge debt buying theirs.
true but the best value is being manipulated by the central banks.
This is the problem. We don't have the tax base to buy back our national debt with. When everyone figures this out we will get an event like Mexico in 1994. Our national debt is the world's reserve currency. Ready to play hot potato with USD?
What has been happening is that foreign central banks have been printing money to buy our debt with. In 2008 the game was almost up. What I have been talking about is how to set things up so that the game wont stop. Balanced trade needs to happen. Balanced federal budget needs to happen, we need to start buying back our national debt. This will postpone the coming run and lessen its severity.
They are buying our debt to finance our consumption of their goods.
As long as trade is balanced. Germany is in trouble because they have run a trade surplus for too long. Greece is in trouble because they have run a deficit for to long. Trade neutral is the only long term sustainable thing to do.
i have no idea what your trying to dispute because there is no disputing what i said.

those that invest in the wrong asset class at the wrong time will get burned .

all the economic theory you want to post does not dispute that fact.

we also only buy foreign over american if we see it as the better value.

you may not like the way things work and want to argue good or bad the effects but that doesnt change the way things are .

it is what it is so save the theory for a different discussion. anyway im done here as i think we covered it all. thanks for the discussion..

Last edited by mathjak107; 10-10-2012 at 04:36 AM..
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Old 10-10-2012, 04:04 PM
 
Location: Texas
2,847 posts, read 2,112,705 times
Reputation: 1754
yes, save that cash and rake in the big bucks


CD Rates by Bankrate.com
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Old 10-10-2012, 05:52 PM
 
621 posts, read 593,001 times
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Quote:
Originally Posted by mathjak107 View Post
heres my opinion on the trade deficit. its all a bull-sh*t number.
I dispute this. Balanced trade is sustainable long term. Anything else isn't. In order to export more than you import you have to buy debt in the country that you are exporting too. Example Germany Vs. Greece. Greece is done importing more that it exports. No one will loan them the money to keep this up. Germany isn't getting their money back.

The same thing will happen to us.
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Old 10-10-2012, 08:29 PM
 
19,304 posts, read 16,834,088 times
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Quote:
Originally Posted by pie_row View Post
I dispute this. Balanced trade is sustainable long term. Anything else isn't. In order to export more than you import you have to buy debt in the country that you are exporting too. Example Germany Vs. Greece. Greece is done importing more that it exports. No one will loan them the money to keep this up. Germany isn't getting their money back.

The same thing will happen to us.
Not necessarily. If we printed money and bought land, minerals and industrial capital with it, every dollar that flowed out would be supported by industrial capacity. Unfortunately its consumer goods.
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Old 10-11-2012, 09:11 PM
 
621 posts, read 593,001 times
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Quote:
Originally Posted by gwynedd1 View Post
Not necessarily. If we printed money and bought land, minerals and industrial capital with it, every dollar that flowed out would be supported by industrial capacity. Unfortunately its consumer goods.
Not clear on what you are saying exactly.

If we print money and bought land in the US with it then what would happen?

If we print money and buy land in foreign countries then what will happen?

Printing money and buying industrial capacity with it foreign or domestic?

Over a ten year period several years ago the world's monetary base went from $3 trillion to $10 trillion with the printed money used to buy MBS in the US. It went around a bit more but the money that flowed into the housing bubble matched the amount printed very closely. The foreign central banks printed money and bought industrial capacity with it. The new money bought debt in the US that debt was used to finance the purchase of foreign goods.

What I think that we should do in response to this is to restructure our economy so that we can start buying back our national debt and cause world wide deflation as we pull back our money for them to use. Let them use their own money for foreign exchange for a bit and see how they like it.

I'm just in an on-rie mood
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Old 10-11-2012, 11:43 PM
 
19,304 posts, read 16,834,088 times
Reputation: 7502
Quote:
Originally Posted by pie_row View Post
Not clear on what you are saying exactly.

If we print money and bought land in the US with it then what would happen?

If we print money and buy land in foreign countries then what will happen?

Printing money and buying industrial capacity with it foreign or domestic?

Over a ten year period several years ago the world's monetary base went from $3 trillion to $10 trillion with the printed money used to buy MBS in the US. It went around a bit more but the money that flowed into the housing bubble matched the amount printed very closely. The foreign central banks printed money and bought industrial capacity with it. The new money bought debt in the US that debt was used to finance the purchase of foreign goods.

What I think that we should do in response to this is to restructure our economy so that we can start buying back our national debt and cause world wide deflation as we pull back our money for them to use. Let them use their own money for foreign exchange for a bit and see how they like it.

I'm just in an on-rie mood
Sorry I am just so used to new ZIRP created money flowing out of the country. That is to say if we purchased foreign productive capacity. However fiscal spending on real value here could also create some in a slack economy. However internationally it would always be the case.
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