Delfation is here alive and well

[emilybh]

Originally Posted by newonecoming2

Pork futures bubble? Any one? The other shoe is dropping. How can we tell? The DOW is up! Over 12,000 and climbing.

Stagflation. Contracting economy. We need wage/price inflation. We need wage inflation to be driving prices higher. Not monetary inflation driving prices higher. Uncle Ben is trying for higher house prices. The only way that I see to get those any time soon is with a big bump in minimum wage.

The stock market is not keeping up with the plummeting dollar though. Your portfolio may SEEM like it is doing well but when you try to buy something everything costs 2 times as much as it did three years ago. Unless your stock positions have doubled in three years, it hasn't even kept up with inflation and the loss of purchasing power you once had when your portfolio was a lot smaller.

[newonecoming2]

Originally Posted by marcopolo

Newonecoming, is there nothing that fails to remind you of the desire to increase the minimum wage by 400%?

Yes but that is not a subject for discussion on the web.

Originally Posted by marcopolo

Another way to state your objective is that you want to make it illegal for anyone whose labor is not worth $28/hour to sell their labor--and effectively make it illegal for any employer to hire anyone whose labor is not worth $28/hour.

Well, it goes like this for the past 30 years the fed has targeted 5% unemployment. This target gets you asset inflation with wage and price stability. This has been the biggest debt bubble ever. What I am talking about is this, cutting the value of the top end in half, and increasing the bottom end by ½ as well. Making it illegal for someone whose labor is worth less than $28/hr to sell their labor? I’m talking about wealth redistribution and inflation. I’m talking about cutting the top end in half and pushing prices up far enough to get housing prices going up now. If you want to save the banks this is what you have to do. If you want the US to not default on the national debt, this is what you have to do or the functional equivalent of it.

Originally Posted by marcopolo

Your plan would drive unemployment up to 28% or 48%. The 18 month trend of rising retail sales and rising industrial production, increased household savings and reduction in consumer debt would come to a screeching halt. We would end up in depression.

Yes it would in the short run. But it would also set up a sharp V shaped recovery. What we have now is worldwide inflation in the prices of those things that you need to live, (That is what the fed’s printing press is getting us. But with M3 contracting we are having stagnant growth, M3 was inflated beyond what the economy can support so it needs to do one of two things to come down or we need to inflate wages to support a larger M3 take your pick) at the same time the economy is contracting or very close to contracting.

Originally Posted by emilybh

The stock market is not keeping up with the plummeting dollar though. Your portfolio may SEEM like it is doing well but when you try to buy something everything costs 2 times as much as it did three years ago. Unless your stock positions have doubled in three years, it hasn't even kept up with inflation and the loss of purchasing power you once had when your portfolio was a lot smaller.

My comment was that every time something doesn’t quite work out as expected lately the Dow goes up. We had a 15X run in the Dow starting in 1981. Priced in gold the recovery in 2005-ish goes away. After a run like that what normally happens is that it falls below the starting point. At the peak you need to switch from stocks too gold. Now it is about ½ the way down so switching isn’t as called for. But with the feds printing press in overdrive, QE(X), everything is going to be going up. The fed’s printing press is lacking traction and that is because wages don’t support a larger M3.

[GuyNTexas]

Deflation is occurring in the general, non-essential purchase categories, as financial pressures increase due to INFLATION of essential purchases, such as food, energy, health care costs, local tax and fee increases.

This is placing even more pressure on local economies and contributing to unemployment, as a broad spectrum of businesses are forced to adjust to competing for a lesser share of this shrinking discretionary spending market by cutting expenses (jobs) as opposed to raising prices which would further impact their businesses. In many cases, both cuts to expenses and lowering prices are being done to boost declining business. This is a depression like situation for many, which is feeding itself ... while the "corporatocracy" of energy, food, health care delivery, wall street, and the banks are making a KILLING, reaping unprecedented profits in an otherwise economic down spiral.

This is why the flimflam artists don't account for food/energy in the inflation calculation. It's smoke and mirrors.

Of course, mainstream America is so dumbed down, they believe the propaganda broadcast on TV, rather than just looking at their checkbooks, receipts, and paychecks. And if their neighbor seems to be suffering ... well ... it's just an isolated case because the economists are telling us everything is hunky dory, so it must be so.

Now, our financial gurus want to employ techniques to boost residential property values!! Why? Well, because THEY CARE SO MUCH ... well, really because right now ... banks own more residential real estate than the American public, which was the plan from the outset of the creation of, and subsequent bursting of the real estate bubble.

But eva-thang is just fine ... we're on the road to recovery ... just look at the stock market if you don't believe it!!

That sound you are hearing is our economy roaring back to life ... not your stomach growling.

[newonecoming2]

I like the tone of what you are saying but have a few comments to make.

Originally Posted by GuyNTexas

Deflation is occurring in the general, non-essential purchase categories, as financial pressures increase due to INFLATION of essential purchases, such as food, energy, health care costs, local tax and fee increases.

M3 is contracting. The rate of change is headed for expansion but it is contracting. Contracting M3 is monetary deflation. This is bringing down the value of housing or is a result of the value of houses coming down.

Originally Posted by GuyNTexas

This is placing even more pressure on local economies and contributing to unemployment, as a broad spectrum of businesses are forced to adjust to competing for a lesser share of this shrinking discretionary spending market by cutting expenses (jobs) as opposed to raising prices which would further impact their businesses. In many cases, both cuts to expenses and lowering prices are being done to boost declining business. This is a depression like situation for many, which is feeding itself ... while the "corporatocracy" of energy, food, health care delivery, wall street, and the banks are making a KILLING, reaping unprecedented profits in an otherwise economic down spiral.

The Return of Depression Economics Supply side economics doesn’t work when you have an economic depression. Higher wages will support more debt more debt makes for a bigger M3. Bigger M3 means more jobs.

Originally Posted by GuyNTexas

This is why the flimflam artists don't account for food/energy in the inflation calculation. It's smoke and mirrors.

No comment. But this I will say. There was a point in time when the unemployment rate and the payout on unemployment benefits diverged markedly. They were fiddling with the unemployment rate.

Originally Posted by GuyNTexas

Of course, mainstream America is so dumbed down, they believe the propaganda broadcast on TV, rather than just looking at their checkbooks, receipts, and paychecks. And if their neighbor seems to be suffering ... well ... it's just an isolated case because the economists are telling us everything is hunky dory, so it must be so.

That is what they are teaching in school today how to be domb.

Originally Posted by GuyNTexas

Now, our financial gurus want to employ techniques to boost residential property values!! Why? Well, because THEY CARE SO MUCH ... well, really because right now ... banks own more residential real estate than the American public, which was the plan from the outset of the creation of, and subsequent bursting of the real estate bubble.

If you really want to boost residential values try increasing wages… a lot.

Originally Posted by GuyNTexas

But eva-thang is just fine ... we're on the road to recovery ... just look at the stock market if you don't believe it!!

Well where do you think the money from the feds printing press is going?

Originally Posted by GuyNTexas

That sound you are hearing is our economy roaring back to life ... not your stomach growling.

That may actually do us some good as we can’t afford to eat as much.