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Old 10-10-2008, 03:18 AM
 
12,869 posts, read 13,765,199 times
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The stock market is not where the primary wealth of america has been located, which has been housing, and what happens to the home equity of the "middle class" (the 40% between the poor 50% and the wealthy 10%) when 5 to 10 million homes get sold at foreclosure auction? Their home's value drops like the proverbial stone. And what happens to consumer spending, which has been so heavily dependent on drawdowns of home equity? It too drops like the proverbial stone. That's called the Wealth Effect in reverse. The rise in household assets since 2000 has been a chimera of borrowed money. Real wealth is the surplus capital accumulated by producing more than you consume--in simple terms, savings which are invested in productive assets. A house is not a productive asset, it is shelter and a repository of value only to the degree it can be profitably rented out as shelter.
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Old 10-10-2008, 04:26 AM
 
706 posts, read 1,210,414 times
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The FDIC won't run out of money. The gov can always print more. The problem is the money they print will be worth less and less and less. So you get your money, but it has no value.
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Old 10-10-2008, 09:46 AM
 
Location: San Diego
940 posts, read 2,960,601 times
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Quote:
Originally Posted by jimmyP View Post
The FDIC won't run out of money. The gov can always print more. The problem is the money they print will be worth less and less and less. So you get your money, but it has no value.
and this is what i'd like to call a hyperinflationary 'depression'. sure, it will not be runaway hyperinflationary like argentina or zimbabwae, however, considering americans possess(ed) the world's greatest power of wealth in the history of the world, a hyperinflationary currency will greatly curtail our blessings into a seemingly bottomless pit relative to zimbabawe, which is a poor nation to begin with anyway! this will be absolutely devastating to the american dream and to the global marketplace.
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Old 10-10-2008, 09:49 AM
 
Location: Great State of Texas
86,068 posts, read 77,237,085 times
Reputation: 27656
Quote:
Originally Posted by floridasandy View Post
The stock market is not where the primary wealth of america has been located, which has been housing, and what happens to the home equity of the "middle class" (the 40% between the poor 50% and the wealthy 10%) when 5 to 10 million homes get sold at foreclosure auction? Their home's value drops like the proverbial stone. And what happens to consumer spending, which has been so heavily dependent on drawdowns of home equity? It too drops like the proverbial stone. That's called the Wealth Effect in reverse. The rise in household assets since 2000 has been a chimera of borrowed money. Real wealth is the surplus capital accumulated by producing more than you consume--in simple terms, savings which are invested in productive assets. A house is not a productive asset, it is shelter and a repository of value only to the degree it can be profitably rented out as shelter.
401K's is where retirement money is. The RE boom didn't start 60 years ago..those people have most of their wealth IN the stock market in the form of 401K, IRA, annuities, stocks, bonds.

Those that thought their home was their 401K are SOL. RE is speculative.
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Old 10-10-2008, 09:57 AM
 
19,346 posts, read 17,096,669 times
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Quote:
Originally Posted by SouthCali4LifeSD View Post
and this is what i'd like to call a hyperinflationary 'depression'. sure, it will not be runaway hyperinflationary like argentina or zimbabwae, however, considering americans possess(ed) the world's greatest power of wealth in the history of the world, a hyperinflationary currency will greatly curtail our blessings into a seemingly bottomless pit relative to zimbabawe, which is a poor nation to begin with anyway! this will be absolutely devastating to the american dream and to the global marketplace.
Hello SouthCali4LifeSD,


OK please try and follow. If they print money to bail out it will be propping up the EXISTING money supply. It will not in anyway be inflationary. We are POST inflationary. The scenario of bailouts causing hyper inflation is completely false.
A hyper inflationary scenario can only happen if the world rejects our currency and the government prints money far in excess of bailouts.

Make no mistake, its still a rip off because in a deflationary environment staying solvent relative to the others is still stealing. If prices are kept stable because one man is printing or "injecting" money it means he is buying it all up. That is the problem. If you are waiting to see hyper inflation as the problem then you will miss this scam right in front of your eyes.
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Old 10-10-2008, 10:40 AM
 
Location: San Diego
940 posts, read 2,960,601 times
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Quote:
Originally Posted by gwynedd1 View Post
Hello SouthCali4LifeSD,


OK please try and follow. If they print money to bail out it will be propping up the EXISTING money supply. It will not in anyway be inflationary. We are POST inflationary. The scenario of bailouts causing hyper inflation is completely false.
A hyper inflationary scenario can only happen if the world rejects our currency and the government prints money far in excess of bailouts.

Make no mistake, its still a rip off because in a deflationary environment staying solvent relative to the others is still stealing. If prices are kept stable because one man is printing or "injecting" money it means he is buying it all up. That is the problem. If you are waiting to see hyper inflation as the problem then you will miss this scam right in front of your eyes.
yes true.... i believe that the only thing saving america is the fact that life today is more global then ever before, and if it weren't for the rest of the world marketplace falling into recession along with us, thus, causing their central banks to react and inject liquidity, we would most definitely be screwed, right? the dollar would face heavy inflation and there would probably be a run on the dollar and an eventual conversion in the world's reserved currency from the us dollar to probably the euro, but it looks like they're having more issues then america at the moment.

thanks for some of the clarifications though... what you say does make sense. i got 30 minutes into the video you shared with me. i'll be away from home all weekend but i'll finish it hopefully sunday night. so far, its a good video.
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Old 10-10-2008, 11:12 AM
 
48,507 posts, read 89,168,042 times
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In the 30's thaey had a free market and didn't really try to con trol n ayhting. Lazze fair that drove the economy into a deep recession in just days.Thank god its not like it was then.
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Old 10-10-2008, 11:19 AM
 
1,954 posts, read 4,953,631 times
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Quote:
Originally Posted by texdav View Post
In the 30's thaey had a free market and didn't really try to con trol n ayhting. Lazze fair that drove the economy into a deep recession in just days.Thank god its not like it was then.
This is not an example of a free market:

Smoot-Hawley Tariff Act - Wikipedia, the free encyclopedia
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