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Bob
July 1st 03, 01:35 PM
The Federal Reserve, the mainstream press, and the talking heads on
CNBC are all abuzz about the fears of deflation. The Fed has dropped
interest rates to one percent to fight the dreaded deflation foe.
Other than prices falling for electronics and clothing made by slave
labor in Third World counties, I have compiled a list of my personal
costs this year. Can anyone explain where exactly is this deflation?
Electric- Up 12.4%
Car Ins.- Up 10%
Property Taxes-up 6%
Health Ins.- up 30%
Cable-up 10%
Home Ins- up 10%
Phone-up 10%
Food- up 6%
Lawn Guy- up 10%
Plumber- up 15%
Water-up 10%
Auto Mechanic-up 10%
Hot Dog Lady- up 15%
Barber- up 15%
Carpet Cleaner- up 15%
Rent- up 10%
Gas- down 5%
Natural Gas- up 20%

I wonder how the millions of seniors on fixed incomes are coping with
this so called deflation and their income from their savings wiped
out?

Chris Hill
July 1st 03, 02:48 PM
On 1 Jul 2003 04:35:41 -0700, (Bob) wrote:

>The Federal Reserve, the mainstream press, and the talking heads on
>CNBC are all abuzz about the fears of deflation. The Fed has dropped
>interest rates to one percent to fight the dreaded deflation foe.
>Other than prices falling for electronics and clothing made by slave
>labor in Third World counties, I have compiled a list of my personal
>costs this year. Can anyone explain where exactly is this deflation?
>Electric- Up 12.4%
>Car Ins.- Up 10%
>Property Taxes-up 6%
>Health Ins.- up 30%
>Cable-up 10%
>Home Ins- up 10%
>Phone-up 10%
>Food- up 6%
>Lawn Guy- up 10%
>Plumber- up 15%
>Water-up 10%
>Auto Mechanic-up 10%
>Hot Dog Lady- up 15%
>Barber- up 15%
>Carpet Cleaner- up 15%
>Rent- up 10%
>Gas- down 5%
>Natural Gas- up 20%

Most of those involve services, which have not seen deflation. Food
and energy are also very volatile. The deflation has been in goods
prices if it has been anywhere. The reason they are so scared of it
is because there is no easy economic fix once it starts. YOu can
always raise interest rates to stop inflation, but you can only lower
them so far and that won't stop deflation.
>I wonder how the millions of seniors on fixed incomes are coping with
>this so called deflation and their income from their savings wiped
>out?

Chris Hill
July 1st 03, 02:48 PM
On 1 Jul 2003 04:35:41 -0700, (Bob) wrote:

>The Federal Reserve, the mainstream press, and the talking heads on
>CNBC are all abuzz about the fears of deflation. The Fed has dropped
>interest rates to one percent to fight the dreaded deflation foe.
>Other than prices falling for electronics and clothing made by slave
>labor in Third World counties, I have compiled a list of my personal
>costs this year. Can anyone explain where exactly is this deflation?
>Electric- Up 12.4%
>Car Ins.- Up 10%
>Property Taxes-up 6%
>Health Ins.- up 30%
>Cable-up 10%
>Home Ins- up 10%
>Phone-up 10%
>Food- up 6%
>Lawn Guy- up 10%
>Plumber- up 15%
>Water-up 10%
>Auto Mechanic-up 10%
>Hot Dog Lady- up 15%
>Barber- up 15%
>Carpet Cleaner- up 15%
>Rent- up 10%
>Gas- down 5%
>Natural Gas- up 20%

Most of those involve services, which have not seen deflation. Food
and energy are also very volatile. The deflation has been in goods
prices if it has been anywhere. The reason they are so scared of it
is because there is no easy economic fix once it starts. YOu can
always raise interest rates to stop inflation, but you can only lower
them so far and that won't stop deflation.
>I wonder how the millions of seniors on fixed incomes are coping with
>this so called deflation and their income from their savings wiped
>out?

Duran
July 1st 03, 08:23 PM
> The important thing to remember is that we are not in a deflationary
> environment, the fed is only concerned about it and is tampering with
rates
> to boost investing / spending to prevent it.

Two other points I forgot to include:

1. To the original poster: Most of the price increases you posted in your
original message are necessities. In a deflationary environment, the prices
of necessities will in all likelyhood still increase. People with money
will not delay spending the money heating their house (and all other
utilities), driving their car to get to work (gas, car ins, maintenance),
and doing everything else they need to do.

2. One of the reasons the fed may be concerned now more so than ever
(deflation can creep in during in bust period of the business cycle) is that
companies during the last boom carried extremely large amounts of debt.
They do not have that much room to drop prices without going bankrupt.

Duran
July 1st 03, 08:23 PM
> The important thing to remember is that we are not in a deflationary
> environment, the fed is only concerned about it and is tampering with
rates
> to boost investing / spending to prevent it.

Two other points I forgot to include:

1. To the original poster: Most of the price increases you posted in your
original message are necessities. In a deflationary environment, the prices
of necessities will in all likelyhood still increase. People with money
will not delay spending the money heating their house (and all other
utilities), driving their car to get to work (gas, car ins, maintenance),
and doing everything else they need to do.

2. One of the reasons the fed may be concerned now more so than ever
(deflation can creep in during in bust period of the business cycle) is that
companies during the last boom carried extremely large amounts of debt.
They do not have that much room to drop prices without going bankrupt.

Albert Wagner
July 1st 03, 08:35 PM
On Tue, 01 Jul 2003 17:02:22 -0700
Brent Geery > wrote:

> On Tue, 1 Jul 2003 01:59:57 -0500, Albert Wagner >
> wrote:
>
> > On Tue, 01 Jul 2003 12:48:19 GMT
> > Chris Hill > wrote:
> > <snip>
> > > Most of those involve services, which have not seen deflation.
> > > Food and energy are also very volatile. The deflation has been in
> > > goods prices if it has been anywhere. The reason they are so
> > > scared of it is because there is no easy economic fix once it
> > > starts. YOu can always raise interest rates to stop inflation,
> > > but you can only lower them so far and that won't stop deflation.
> > <snip>
> > Right. Current economic theory says it's not supposed to happen, so
> > they haven't a clue how to stop it once it starts.
>
> If it's not "supposed to" happen, then why would they worry about it
> happening?

Because they know that their economic model is unrelated to reality in
any meaningful way. The deflation itself, should it happen, is the
least of their problems. The greatest casualty is their own reputation
for being able to predict and control reality based on their faulty
model.

>
> --
> BRENT - The Usenet typo king. :)
>
> Fast Times At Ridgemont High Info
> http://www.FastTimesAtRidgemontHigh.org
> Voted #87 - American Film Institute's Top 100 Funniest American Films

Albert Wagner
July 1st 03, 08:35 PM
On Tue, 01 Jul 2003 17:02:22 -0700
Brent Geery > wrote:

> On Tue, 1 Jul 2003 01:59:57 -0500, Albert Wagner >
> wrote:
>
> > On Tue, 01 Jul 2003 12:48:19 GMT
> > Chris Hill > wrote:
> > <snip>
> > > Most of those involve services, which have not seen deflation.
> > > Food and energy are also very volatile. The deflation has been in
> > > goods prices if it has been anywhere. The reason they are so
> > > scared of it is because there is no easy economic fix once it
> > > starts. YOu can always raise interest rates to stop inflation,
> > > but you can only lower them so far and that won't stop deflation.
> > <snip>
> > Right. Current economic theory says it's not supposed to happen, so
> > they haven't a clue how to stop it once it starts.
>
> If it's not "supposed to" happen, then why would they worry about it
> happening?

Because they know that their economic model is unrelated to reality in
any meaningful way. The deflation itself, should it happen, is the
least of their problems. The greatest casualty is their own reputation
for being able to predict and control reality based on their faulty
model.

>
> --
> BRENT - The Usenet typo king. :)
>
> Fast Times At Ridgemont High Info
> http://www.FastTimesAtRidgemontHigh.org
> Voted #87 - American Film Institute's Top 100 Funniest American Films

July 1st 03, 08:50 PM
I've seen deflation in tires . . .
jk,
--Tock

July 1st 03, 08:50 PM
I've seen deflation in tires . . .
jk,
--Tock

Chris Hill
July 1st 03, 10:02 PM
On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:

>I've seen deflation in tires . . .


It seems to me that the deflation is happening, but not in goods such
as food and energy that you buy every day, or in services which you
also use frequently. Things that I have noticed decreasing in price
include computer stuff (as usual) and perhaps some building materials.
I've been looking to replace a patio door for over a year, The door I
wanted was going to cost $800 last year, I think I spent around $700
last month and bought some things I'd need to put it in while I was
buying. As far as I could tell, it was the same door. I also got a
bargain on a cordless drill. It doesn't have any fancy features, but
it is pretty powerful and cost something like $30.

Chris Hill
July 1st 03, 10:02 PM
On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:

>I've seen deflation in tires . . .


It seems to me that the deflation is happening, but not in goods such
as food and energy that you buy every day, or in services which you
also use frequently. Things that I have noticed decreasing in price
include computer stuff (as usual) and perhaps some building materials.
I've been looking to replace a patio door for over a year, The door I
wanted was going to cost $800 last year, I think I spent around $700
last month and bought some things I'd need to put it in while I was
buying. As far as I could tell, it was the same door. I also got a
bargain on a cordless drill. It doesn't have any fancy features, but
it is pretty powerful and cost something like $30.

Duran
July 1st 03, 11:48 PM
"Chris Hill" > wrote in message
s.com...
> On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
>
> >I've seen deflation in tires . . .
>
>
> It seems to me that the deflation is happening, but not in goods such
> as food and energy that you buy every day, or in services which you
> also use frequently. Things that I have noticed decreasing in price
> include computer stuff (as usual) and perhaps some building materials.
> I've been looking to replace a patio door for over a year, The door I
> wanted was going to cost $800 last year, I think I spent around $700
> last month and bought some things I'd need to put it in while I was
> buying. As far as I could tell, it was the same door. I also got a
> bargain on a cordless drill. It doesn't have any fancy features, but
> it is pretty powerful and cost something like $30.

At any point in time, good economy or bad, there will always be prices that
are increasing and prices that are decreasing. Each industry / sector has
its own market, and within that, it is drastically different across the
geographic landscape. The Fed will probably be convinced of a deflationary
environment when the CPI (or the PPI maybe), and/or the GDP shrinks for more
than 1 or 2 quarters....this is just a guess though, but probably the best
estimate.

Duran
July 1st 03, 11:48 PM
"Chris Hill" > wrote in message
s.com...
> On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
>
> >I've seen deflation in tires . . .
>
>
> It seems to me that the deflation is happening, but not in goods such
> as food and energy that you buy every day, or in services which you
> also use frequently. Things that I have noticed decreasing in price
> include computer stuff (as usual) and perhaps some building materials.
> I've been looking to replace a patio door for over a year, The door I
> wanted was going to cost $800 last year, I think I spent around $700
> last month and bought some things I'd need to put it in while I was
> buying. As far as I could tell, it was the same door. I also got a
> bargain on a cordless drill. It doesn't have any fancy features, but
> it is pretty powerful and cost something like $30.

At any point in time, good economy or bad, there will always be prices that
are increasing and prices that are decreasing. Each industry / sector has
its own market, and within that, it is drastically different across the
geographic landscape. The Fed will probably be convinced of a deflationary
environment when the CPI (or the PPI maybe), and/or the GDP shrinks for more
than 1 or 2 quarters....this is just a guess though, but probably the best
estimate.

Bubbalicious
July 2nd 03, 01:43 AM
(Bob) wrote:

> the mainstream press, and the talking heads

The VERY people that want you to THINK we are headed for doom and gloom.

Bubbalicious
July 2nd 03, 01:43 AM
(Bob) wrote:

> the mainstream press, and the talking heads

The VERY people that want you to THINK we are headed for doom and gloom.

Shag
July 2nd 03, 01:56 AM
"Chris Hill" > wrote in message
s.com...
>
> The reason they are so scared of it
> is because there is no easy economic fix once it starts. YOu can
> always raise interest rates to stop inflation, but you can only lower
> them so far and that won't stop deflation.

I've heard people say this, but it seems to me that the
government can just "print money" to increase the money
supply (that's not how they would do it, really, but
functionally that's what it's equivalent to). More money
chasing the same amount of goods would lead to
inflation, or in this case, re-flation. What am I missing here?

Shag
July 2nd 03, 01:56 AM
"Chris Hill" > wrote in message
s.com...
>
> The reason they are so scared of it
> is because there is no easy economic fix once it starts. YOu can
> always raise interest rates to stop inflation, but you can only lower
> them so far and that won't stop deflation.

I've heard people say this, but it seems to me that the
government can just "print money" to increase the money
supply (that's not how they would do it, really, but
functionally that's what it's equivalent to). More money
chasing the same amount of goods would lead to
inflation, or in this case, re-flation. What am I missing here?

Neil
July 2nd 03, 01:56 AM
(Bob) wrote in message >...
> The Federal Reserve, the mainstream press, and the talking heads on
> CNBC are all abuzz about the fears of deflation.

There's concern and interest in deflation, but we don't have that. In
a way, it would be interesting if we did, because so many of us have
seen inflation and stabilization, but never seen deflation, although
we wouldn't like it either.

> I wonder how the millions of seniors on fixed incomes are coping with
> this so called deflation and their income from their savings wiped
> out?

If we had deflation, where prices and wages really dropped, I'd think
someone on a fixed and stable income (like many retirees) would do
quite well, because the prices they'd pay for goods and services would
drop. Same would go for anyone with a lot of savings, because those
people's dollar would go further. (Correct me if I'm wrong.)

Some thoughts on deflation:

http://web.ask.com/web?q=what+is+deflation%3F&o=0&qsrc=0

Neil
July 2nd 03, 01:56 AM
(Bob) wrote in message >...
> The Federal Reserve, the mainstream press, and the talking heads on
> CNBC are all abuzz about the fears of deflation.

There's concern and interest in deflation, but we don't have that. In
a way, it would be interesting if we did, because so many of us have
seen inflation and stabilization, but never seen deflation, although
we wouldn't like it either.

> I wonder how the millions of seniors on fixed incomes are coping with
> this so called deflation and their income from their savings wiped
> out?

If we had deflation, where prices and wages really dropped, I'd think
someone on a fixed and stable income (like many retirees) would do
quite well, because the prices they'd pay for goods and services would
drop. Same would go for anyone with a lot of savings, because those
people's dollar would go further. (Correct me if I'm wrong.)

Some thoughts on deflation:

http://web.ask.com/web?q=what+is+deflation%3F&o=0&qsrc=0

Shag
July 2nd 03, 01:57 AM
"Duran" > wrote in message
...
>
> The Fed will probably be convinced of a deflationary
> environment when the CPI (or the PPI maybe), and/or the GDP shrinks for
more
> than 1 or 2 quarters....

GDP decrease for two consecutive quarters is the general
definition of "recession", BTW.

Shag
July 2nd 03, 01:57 AM
"Duran" > wrote in message
...
>
> The Fed will probably be convinced of a deflationary
> environment when the CPI (or the PPI maybe), and/or the GDP shrinks for
more
> than 1 or 2 quarters....

GDP decrease for two consecutive quarters is the general
definition of "recession", BTW.

Brent Geery
July 2nd 03, 02:02 AM
On Tue, 1 Jul 2003 01:59:57 -0500, Albert Wagner >
wrote:

> On Tue, 01 Jul 2003 12:48:19 GMT
> Chris Hill > wrote:
> <snip>
> > Most of those involve services, which have not seen deflation. Food
> > and energy are also very volatile. The deflation has been in goods
> > prices if it has been anywhere. The reason they are so scared of it
> > is because there is no easy economic fix once it starts. YOu can
> > always raise interest rates to stop inflation, but you can only lower
> > them so far and that won't stop deflation.
> <snip>
> Right. Current economic theory says it's not supposed to happen, so
> they haven't a clue how to stop it once it starts.

If it's not "supposed to" happen, then why would they worry about it
happening?

--
BRENT - The Usenet typo king. :)

Fast Times At Ridgemont High Info http://www.FastTimesAtRidgemontHigh.org
Voted #87 - American Film Institute's Top 100 Funniest American Films

Brent Geery
July 2nd 03, 02:02 AM
On Tue, 1 Jul 2003 01:59:57 -0500, Albert Wagner >
wrote:

> On Tue, 01 Jul 2003 12:48:19 GMT
> Chris Hill > wrote:
> <snip>
> > Most of those involve services, which have not seen deflation. Food
> > and energy are also very volatile. The deflation has been in goods
> > prices if it has been anywhere. The reason they are so scared of it
> > is because there is no easy economic fix once it starts. YOu can
> > always raise interest rates to stop inflation, but you can only lower
> > them so far and that won't stop deflation.
> <snip>
> Right. Current economic theory says it's not supposed to happen, so
> they haven't a clue how to stop it once it starts.

If it's not "supposed to" happen, then why would they worry about it
happening?

--
BRENT - The Usenet typo king. :)

Fast Times At Ridgemont High Info http://www.FastTimesAtRidgemontHigh.org
Voted #87 - American Film Institute's Top 100 Funniest American Films

Shag
July 2nd 03, 02:12 AM
"Neil" > wrote in message
om...
> (Bob) wrote in message
>...
> > The Federal Reserve, the mainstream press, and the talking heads on
> > CNBC are all abuzz about the fears of deflation.
>
> There's concern and interest in deflation, but we don't have that. In
> a way, it would be interesting if we did, because so many of us have
> seen inflation and stabilization, but never seen deflation, although
> we wouldn't like it either.
>
> > I wonder how the millions of seniors on fixed incomes are coping with
> > this so called deflation and their income from their savings wiped
> > out?
>
> If we had deflation, where prices and wages really dropped, I'd think
> someone on a fixed and stable income (like many retirees) would do
> quite well, because the prices they'd pay for goods and services would
> drop. Same would go for anyone with a lot of savings, because those
> people's dollar would go further. (Correct me if I'm wrong.)

That raises an interesting question: can the COLA adjustment to
Social Security be negative? If so, those on SS might not have
such a "fixed" income after all.

Shag
July 2nd 03, 02:12 AM
"Neil" > wrote in message
om...
> (Bob) wrote in message
>...
> > The Federal Reserve, the mainstream press, and the talking heads on
> > CNBC are all abuzz about the fears of deflation.
>
> There's concern and interest in deflation, but we don't have that. In
> a way, it would be interesting if we did, because so many of us have
> seen inflation and stabilization, but never seen deflation, although
> we wouldn't like it either.
>
> > I wonder how the millions of seniors on fixed incomes are coping with
> > this so called deflation and their income from their savings wiped
> > out?
>
> If we had deflation, where prices and wages really dropped, I'd think
> someone on a fixed and stable income (like many retirees) would do
> quite well, because the prices they'd pay for goods and services would
> drop. Same would go for anyone with a lot of savings, because those
> people's dollar would go further. (Correct me if I'm wrong.)

That raises an interesting question: can the COLA adjustment to
Social Security be negative? If so, those on SS might not have
such a "fixed" income after all.

Home Brewer
July 2nd 03, 02:28 AM
On Tue, 01 Jul 2003 20:02:45 GMT, Chris Hill
> wrote:

>On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
>
>>I've seen deflation in tires . . .
>
>
>It seems to me that the deflation is happening, but not in goods such
>as food and energy that you buy every day, or in services which you
>also use frequently. Things that I have noticed decreasing in price
>include computer stuff (as usual) and perhaps some building materials.
>I've been looking to replace a patio door for over a year, The door I
>wanted was going to cost $800 last year, I think I spent around $700
>last month and bought some things I'd need to put it in while I was
>buying. As far as I could tell, it was the same door. I also got a
>bargain on a cordless drill. It doesn't have any fancy features, but
>it is pretty powerful and cost something like $30.

I think part of the worry is about the automobile sector. I read
somewhere that some 30% of the economy relies on car sales (directly &
indirectly) and it seems that the automakers are having a hard time
selling their wares even at 0% financing.

Of course, part of the problem is that "Quality is Job One" is an
advertising slogan, not a corporate commitment...

Home Brewer
July 2nd 03, 02:28 AM
On Tue, 01 Jul 2003 20:02:45 GMT, Chris Hill
> wrote:

>On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
>
>>I've seen deflation in tires . . .
>
>
>It seems to me that the deflation is happening, but not in goods such
>as food and energy that you buy every day, or in services which you
>also use frequently. Things that I have noticed decreasing in price
>include computer stuff (as usual) and perhaps some building materials.
>I've been looking to replace a patio door for over a year, The door I
>wanted was going to cost $800 last year, I think I spent around $700
>last month and bought some things I'd need to put it in while I was
>buying. As far as I could tell, it was the same door. I also got a
>bargain on a cordless drill. It doesn't have any fancy features, but
>it is pretty powerful and cost something like $30.

I think part of the worry is about the automobile sector. I read
somewhere that some 30% of the economy relies on car sales (directly &
indirectly) and it seems that the automakers are having a hard time
selling their wares even at 0% financing.

Of course, part of the problem is that "Quality is Job One" is an
advertising slogan, not a corporate commitment...

JazzMan
July 2nd 03, 03:00 AM
Bob wrote:
>
> The Federal Reserve, the mainstream press, and the talking heads on
> CNBC are all abuzz about the fears of deflation. The Fed has dropped
> interest rates to one percent to fight the dreaded deflation foe.

We need all the deflation we can get. The people at the bottom
need a break for a change, and the people at the top, well, they
make and have so much wealth that the costs of food and shelter
are completely and totally irrelevant to them.

JazzMan

--
***************************************
Please reply to jsavage"at"airmail.net.
Curse those darned bulk e-mailers!
***************************************

JazzMan
July 2nd 03, 03:00 AM
Bob wrote:
>
> The Federal Reserve, the mainstream press, and the talking heads on
> CNBC are all abuzz about the fears of deflation. The Fed has dropped
> interest rates to one percent to fight the dreaded deflation foe.

We need all the deflation we can get. The people at the bottom
need a break for a change, and the people at the top, well, they
make and have so much wealth that the costs of food and shelter
are completely and totally irrelevant to them.

JazzMan

--
***************************************
Please reply to jsavage"at"airmail.net.
Curse those darned bulk e-mailers!
***************************************

July 2nd 03, 03:50 AM
"Chris Hill" > wrote in message
s.com...
> On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
>
> >I've seen deflation in tires . . .
>
>
> It seems to me that the deflation is happening,
. . . s n i p . . .

Yes, it's happening . . . but slowly . . . very slowly. After a week or so
I gotta find me an air pump . . .

July 2nd 03, 03:50 AM
"Chris Hill" > wrote in message
s.com...
> On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
>
> >I've seen deflation in tires . . .
>
>
> It seems to me that the deflation is happening,
. . . s n i p . . .

Yes, it's happening . . . but slowly . . . very slowly. After a week or so
I gotta find me an air pump . . .

Duran
July 2nd 03, 06:09 AM
"Shag" > wrote in message
...
> "Duran" > wrote in message
> ...
> >
> > The Fed will probably be convinced of a deflationary
> > environment when the CPI (or the PPI maybe), and/or the GDP shrinks for
> more
> > than 1 or 2 quarters....
>
> GDP decrease for two consecutive quarters is the general
> definition of "recession", BTW.

Indeed it is. I should have made myself more clear. Again, I have no idea
what the Fed's definition of a deflationary environment is, but would guess
they would look at the CPI, PPI and GDP all in tandem.

CPI is the best measure we have of national consumer prices.

So - for example - if the Fed see's the GDP shrink for a couple of quarters
due to say lowered personal consumption, and then see's the CPI shrink as
well (IE, actual prices are falling because of lower consumer spending),
they MAY conclude we are in a deflationary environment. They may just use
the raw CPI to gauge this too, but I doubt it.

Duran
July 2nd 03, 06:09 AM
"Shag" > wrote in message
...
> "Duran" > wrote in message
> ...
> >
> > The Fed will probably be convinced of a deflationary
> > environment when the CPI (or the PPI maybe), and/or the GDP shrinks for
> more
> > than 1 or 2 quarters....
>
> GDP decrease for two consecutive quarters is the general
> definition of "recession", BTW.

Indeed it is. I should have made myself more clear. Again, I have no idea
what the Fed's definition of a deflationary environment is, but would guess
they would look at the CPI, PPI and GDP all in tandem.

CPI is the best measure we have of national consumer prices.

So - for example - if the Fed see's the GDP shrink for a couple of quarters
due to say lowered personal consumption, and then see's the CPI shrink as
well (IE, actual prices are falling because of lower consumer spending),
they MAY conclude we are in a deflationary environment. They may just use
the raw CPI to gauge this too, but I doubt it.

Andy.3rd
July 2nd 03, 06:39 AM
>We need all the deflation we can get. The people at the bottom
>need a break for a change, and the people at the top, well, they
>make and have so much wealth that the costs of food and shelter
>are completely and totally irrelevant to them.
>
>JazzMan

If deflation really hits- guess who gets hit 1st- the people at the bottom gt
laid off first. Those on fixed incomes see less income from investments, stock
owners are forced to sell into a falling market to meet current debt
obligations..

it AINT pretty to be on the bottom of deflation.




His Illustrious and Most Serene Jadedness, Andy, RSM

Andy.3rd
July 2nd 03, 06:39 AM
>We need all the deflation we can get. The people at the bottom
>need a break for a change, and the people at the top, well, they
>make and have so much wealth that the costs of food and shelter
>are completely and totally irrelevant to them.
>
>JazzMan

If deflation really hits- guess who gets hit 1st- the people at the bottom gt
laid off first. Those on fixed incomes see less income from investments, stock
owners are forced to sell into a falling market to meet current debt
obligations..

it AINT pretty to be on the bottom of deflation.




His Illustrious and Most Serene Jadedness, Andy, RSM

Chris Hill
July 2nd 03, 03:06 PM
On Tue, 01 Jul 2003 23:56:16 GMT, "Shag" > wrote:

>
>I've heard people say this, but it seems to me that the
>government can just "print money" to increase the money
>supply (that's not how they would do it, really, but
>functionally that's what it's equivalent to). More money
>chasing the same amount of goods would lead to
>inflation, or in this case, re-flation. What am I missing here?


What would happen to the stock and bond markets' foreign investors.

Chris Hill
July 2nd 03, 03:06 PM
On Tue, 01 Jul 2003 23:56:16 GMT, "Shag" > wrote:

>
>I've heard people say this, but it seems to me that the
>government can just "print money" to increase the money
>supply (that's not how they would do it, really, but
>functionally that's what it's equivalent to). More money
>chasing the same amount of goods would lead to
>inflation, or in this case, re-flation. What am I missing here?


What would happen to the stock and bond markets' foreign investors.

trent
July 2nd 03, 03:21 PM
Duran wrote:

> Deflation is capitalism's worst nightmare...read my other posts. It would
> bring the American economy to it's knees. Japan is on the brink of
> financial collapse after nearly a decade of sustained deflation.


Actually, Japan is recently on the rebound...

trent
--
I read it on the Internet, therefore it must be true.
:wq

trent
July 2nd 03, 03:21 PM
Duran wrote:

> Deflation is capitalism's worst nightmare...read my other posts. It would
> bring the American economy to it's knees. Japan is on the brink of
> financial collapse after nearly a decade of sustained deflation.


Actually, Japan is recently on the rebound...

trent
--
I read it on the Internet, therefore it must be true.
:wq

IleneB
July 2nd 03, 03:52 PM
In article >, Pat Meadows
> wrote:

> It's only in salaries and wages. :) Especially the IT
> sector.

Well, the prices of services hasn't much come down, as you point out.
But the prices of "stuff" might be coming down. Now, it's hard for me
to tell, since markups seem pretty wide, how much prices are being
brought down to cost or to deflation, if either.

The guy who built my house in 2001 for top dollar is now softening his
fees, as are subcontractors and other trade people. Of course, the
highs were so high here, they could only go one direction- down.

Ilene B

IleneB
July 2nd 03, 03:52 PM
In article >, Pat Meadows
> wrote:

> It's only in salaries and wages. :) Especially the IT
> sector.

Well, the prices of services hasn't much come down, as you point out.
But the prices of "stuff" might be coming down. Now, it's hard for me
to tell, since markups seem pretty wide, how much prices are being
brought down to cost or to deflation, if either.

The guy who built my house in 2001 for top dollar is now softening his
fees, as are subcontractors and other trade people. Of course, the
highs were so high here, they could only go one direction- down.

Ilene B

IleneB
July 2nd 03, 03:54 PM
In article >, Duran
> wrote:

> companies during the last boom carried extremely large amounts of debt.
> They do not have that much room to drop prices without going bankrupt.


Not sure if this is relevant, but reportedly something like 2/3 of the
U.S. economy is consumer spending, a great deal of which is
discretionary. I assume that it would therefore be prone to deflation
before other costs/expenditures, as it's the first place people will
cut back (or drop out).

Ilene B

IleneB
July 2nd 03, 03:54 PM
In article >, Duran
> wrote:

> companies during the last boom carried extremely large amounts of debt.
> They do not have that much room to drop prices without going bankrupt.


Not sure if this is relevant, but reportedly something like 2/3 of the
U.S. economy is consumer spending, a great deal of which is
discretionary. I assume that it would therefore be prone to deflation
before other costs/expenditures, as it's the first place people will
cut back (or drop out).

Ilene B

IleneB
July 2nd 03, 03:57 PM
In article >, Pat Meadows
> wrote:

> Social Security benefits - the main source of income for
> many retirees who do not have substantial savings - would
> presumably drop in a deflationary period as they are
> (theoretically) tied to the cost of living.


Do you think they would actually be decreased (into the negative) or do
you mean there would be little or no COLA increase?

Ilene B

IleneB
July 2nd 03, 03:57 PM
In article >, Pat Meadows
> wrote:

> Social Security benefits - the main source of income for
> many retirees who do not have substantial savings - would
> presumably drop in a deflationary period as they are
> (theoretically) tied to the cost of living.


Do you think they would actually be decreased (into the negative) or do
you mean there would be little or no COLA increase?

Ilene B

Albert Wagner
July 2nd 03, 10:50 PM
On 2 Jul 2003 17:18:13 -0700
(Edgar S.) wrote:
<snip>
> Sorry...but no they're not. They don't have clue ONE about how to
> either prevent nor cure deflation. Cutting interest rates is a measure
> of their desperation. Japan's interest rates were cut to 0 but it
> didn't do Japan any good. Nor will it do the US any good.
> The Fed is beyond conserned about delfation. It's here, and they are
> in a blind pig panic about it.
<snip>
I suppose I'll not really enjoy a deflationary period, based on what my
older family members told me about it, but...the thought of economists
"in a blind pig panic" is extremely satisfying.

Albert Wagner
July 2nd 03, 10:50 PM
On 2 Jul 2003 17:18:13 -0700
(Edgar S.) wrote:
<snip>
> Sorry...but no they're not. They don't have clue ONE about how to
> either prevent nor cure deflation. Cutting interest rates is a measure
> of their desperation. Japan's interest rates were cut to 0 but it
> didn't do Japan any good. Nor will it do the US any good.
> The Fed is beyond conserned about delfation. It's here, and they are
> in a blind pig panic about it.
<snip>
I suppose I'll not really enjoy a deflationary period, based on what my
older family members told me about it, but...the thought of economists
"in a blind pig panic" is extremely satisfying.

Tsu Dho Poster
July 2nd 03, 11:53 PM
"Pat Meadows" > wrote in message
...
> On Wed, 02 Jul 2003 09:57:02 -0400, IleneB
> > wrote:
>
> >In article >, Pat Meadows
> > wrote:
> >
> >> Social Security benefits - the main source of income for
> >> many retirees who do not have substantial savings - would
> >> presumably drop in a deflationary period as they are
> >> (theoretically) tied to the cost of living.
> >
> >
> >Do you think they would actually be decreased (into the negative) or do
> >you mean there would be little or no COLA increase?
> >
>
> I don't know which would happen. I don't think we've ever
> experienced deflation.
>
> Pat
>

<snip>
(full article below)
Americas last serious case of deflation occurred during the
Great Depression of the 1930s.

At such a time, prices are generally falling across the board for
goods, services, stocks and real estate, economists said. Workers
get socked with pay cuts and businesses watch their incomes and
profits shrivel, making it harder for them to pay off debt.

Consumer behavior also changes. Shoppers seeing a steady stream
of discounting put off making purchases to wait for even better
deals later.
In the United States, where consumer spending accounts for
two-thirds of all economic activity and is the main force keeping
the economy going, such a change would seriously hurt the
economy.

Business, meanwhile, would cope with such a situation by
throttling back production and cutting jobs, wages and capital
spending, providing another blow to the economy.
<snip>
Neither the Fed nor economists want to see the United States,
struggling for three years to overcome the bursting of the U.S.
stock market bubble, follow Japan into a falling price spiral.
Japan, where real estate prices collapsed in the late 1980s, has
been mired in more than a decade of weak growth, compounded now
by prolonged deflation.

================================================== =====

Economists Worrying About Deflation
The Associated Press
Friday 16 May 2003

WASHINGTON For American consumers, the prospect of falling
prices sure sounds like a good thing. But a prolonged and
widespread decline, with everything from real-estate values to
incomes collapsing, would spell disaster for the U.S. economy.

Concerns among private economists about a rare and dangerous
episode of deflation were heightened by a government report
Thursday showing a record 1.9 percent drop in wholesale prices in
April and a Federal Reserve warning last week about the
possibility of a destabilizing fall in prices.

Although Fed Chairman Alan Greenspan and his colleagues indicated
that the chance of deflation was remote, Fed policy-makers said
it still represented a potential threat to the already weak
economy, a concern that has thrust the matter into the national
spotlight.

Deflation is like quicksand. We want to be 10,000 miles away
from it, said Sung Won Sohn, chief economist at Wells Fargo.
Once you get into deflation the consequences are so severe it is
hard to get out, he added.

Americas last serious case of deflation occurred during the
Great Depression of the 1930s.

At such a time, prices are generally falling across the board for
goods, services, stocks and real estate, economists said. Workers
get socked with pay cuts and businesses watch their incomes and
profits shrivel, making it harder for them to pay off debt.

Consumer behavior also changes. Shoppers seeing a steady stream
of discounting put off making purchases to wait for even better
deals later.

In the United States, where consumer spending accounts for
two-thirds of all economic activity and is the main force keeping
the economy going, such a change would seriously hurt the
economy.

Business, meanwhile, would cope with such a situation by
throttling back production and cutting jobs, wages and capital
spending, providing another blow to the economy.

Economists view deflation as a far more serious threat than
inflation because the Feds primary tool for boosting economic
activity a reduction in interest rates might have only a
limited impact on the psyche of consumers and businesses once a
deflationary spiral takes hold.

Japan, for instance, has been unable to get rid of long-standing
deflation problem and turn around its economy despite having
driven interest rates down to zero.

A key short-term interest rate controlled by the Fed, the federal
funds rate, is already at a 41-year low of 1.25 percent. Fed
policy-makers last week signaled they are prepared to cut that
rate to ward off even the threat of deflation. Economists said
that raised the odds of a rate cut at the Feds next meeting on
June 24-25.

The Fed cant lower interest rates below zero, but policy-makers
say they can do other things to pump more money into the economy
to fight deflation.

Economists also pointed out that a weaker U.S. dollar can help.

Neither the Fed nor economists want to see the United States,
struggling for three years to overcome the bursting of the U.S.
stock market bubble, follow Japan into a falling price spiral.
Japan, where real estate prices collapsed in the late 1980s, has
been mired in more than a decade of weak growth, compounded now
by prolonged deflation.

Treasury Secretary John Snow said he saw little threat of
deflation developing in the United States.

Tsu Dho Poster
July 2nd 03, 11:53 PM
"Pat Meadows" > wrote in message
...
> On Wed, 02 Jul 2003 09:57:02 -0400, IleneB
> > wrote:
>
> >In article >, Pat Meadows
> > wrote:
> >
> >> Social Security benefits - the main source of income for
> >> many retirees who do not have substantial savings - would
> >> presumably drop in a deflationary period as they are
> >> (theoretically) tied to the cost of living.
> >
> >
> >Do you think they would actually be decreased (into the negative) or do
> >you mean there would be little or no COLA increase?
> >
>
> I don't know which would happen. I don't think we've ever
> experienced deflation.
>
> Pat
>

<snip>
(full article below)
Americas last serious case of deflation occurred during the
Great Depression of the 1930s.

At such a time, prices are generally falling across the board for
goods, services, stocks and real estate, economists said. Workers
get socked with pay cuts and businesses watch their incomes and
profits shrivel, making it harder for them to pay off debt.

Consumer behavior also changes. Shoppers seeing a steady stream
of discounting put off making purchases to wait for even better
deals later.
In the United States, where consumer spending accounts for
two-thirds of all economic activity and is the main force keeping
the economy going, such a change would seriously hurt the
economy.

Business, meanwhile, would cope with such a situation by
throttling back production and cutting jobs, wages and capital
spending, providing another blow to the economy.
<snip>
Neither the Fed nor economists want to see the United States,
struggling for three years to overcome the bursting of the U.S.
stock market bubble, follow Japan into a falling price spiral.
Japan, where real estate prices collapsed in the late 1980s, has
been mired in more than a decade of weak growth, compounded now
by prolonged deflation.

================================================== =====

Economists Worrying About Deflation
The Associated Press
Friday 16 May 2003

WASHINGTON For American consumers, the prospect of falling
prices sure sounds like a good thing. But a prolonged and
widespread decline, with everything from real-estate values to
incomes collapsing, would spell disaster for the U.S. economy.

Concerns among private economists about a rare and dangerous
episode of deflation were heightened by a government report
Thursday showing a record 1.9 percent drop in wholesale prices in
April and a Federal Reserve warning last week about the
possibility of a destabilizing fall in prices.

Although Fed Chairman Alan Greenspan and his colleagues indicated
that the chance of deflation was remote, Fed policy-makers said
it still represented a potential threat to the already weak
economy, a concern that has thrust the matter into the national
spotlight.

Deflation is like quicksand. We want to be 10,000 miles away
from it, said Sung Won Sohn, chief economist at Wells Fargo.
Once you get into deflation the consequences are so severe it is
hard to get out, he added.

Americas last serious case of deflation occurred during the
Great Depression of the 1930s.

At such a time, prices are generally falling across the board for
goods, services, stocks and real estate, economists said. Workers
get socked with pay cuts and businesses watch their incomes and
profits shrivel, making it harder for them to pay off debt.

Consumer behavior also changes. Shoppers seeing a steady stream
of discounting put off making purchases to wait for even better
deals later.

In the United States, where consumer spending accounts for
two-thirds of all economic activity and is the main force keeping
the economy going, such a change would seriously hurt the
economy.

Business, meanwhile, would cope with such a situation by
throttling back production and cutting jobs, wages and capital
spending, providing another blow to the economy.

Economists view deflation as a far more serious threat than
inflation because the Feds primary tool for boosting economic
activity a reduction in interest rates might have only a
limited impact on the psyche of consumers and businesses once a
deflationary spiral takes hold.

Japan, for instance, has been unable to get rid of long-standing
deflation problem and turn around its economy despite having
driven interest rates down to zero.

A key short-term interest rate controlled by the Fed, the federal
funds rate, is already at a 41-year low of 1.25 percent. Fed
policy-makers last week signaled they are prepared to cut that
rate to ward off even the threat of deflation. Economists said
that raised the odds of a rate cut at the Feds next meeting on
June 24-25.

The Fed cant lower interest rates below zero, but policy-makers
say they can do other things to pump more money into the economy
to fight deflation.

Economists also pointed out that a weaker U.S. dollar can help.

Neither the Fed nor economists want to see the United States,
struggling for three years to overcome the bursting of the U.S.
stock market bubble, follow Japan into a falling price spiral.
Japan, where real estate prices collapsed in the late 1980s, has
been mired in more than a decade of weak growth, compounded now
by prolonged deflation.

Treasury Secretary John Snow said he saw little threat of
deflation developing in the United States.

Edgar S.
July 3rd 03, 01:13 AM
JazzMan > wrote in message >...
> Bob wrote:
> >
> > The Federal Reserve, the mainstream press, and the talking heads on
> > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > interest rates to one percent to fight the dreaded deflation foe.
>
> We need all the deflation we can get.

Deflation isn't a GOOD thing. Deflation sounds like Inflation, but
it's NOT the opposite of inflation. The two things are only related in
that they refer to currency.

Deflation means ppl don't have the cash to BUY anything. Ppl don't buy
from the merchants, and this means they'll go out of business even
faster.

> The people at the bottom
> need a break

Don't be retarded. People at the bottom are never going to "get a
break" as u so stupidly put it. Have u been eating paint chips?

Edgar S.
July 3rd 03, 01:13 AM
JazzMan > wrote in message >...
> Bob wrote:
> >
> > The Federal Reserve, the mainstream press, and the talking heads on
> > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > interest rates to one percent to fight the dreaded deflation foe.
>
> We need all the deflation we can get.

Deflation isn't a GOOD thing. Deflation sounds like Inflation, but
it's NOT the opposite of inflation. The two things are only related in
that they refer to currency.

Deflation means ppl don't have the cash to BUY anything. Ppl don't buy
from the merchants, and this means they'll go out of business even
faster.

> The people at the bottom
> need a break

Don't be retarded. People at the bottom are never going to "get a
break" as u so stupidly put it. Have u been eating paint chips?

Edgar S.
July 3rd 03, 01:17 AM
trent > wrote in message >...
> Duran wrote:
>
> > Deflation is capitalism's worst nightmare...read my other posts. It would
> > bring the American economy to it's knees. Japan is on the brink of
> > financial collapse after nearly a decade of sustained deflation.
>
>
> Actually, Japan is recently on the rebound...

the ONLY way Japan could be on a "rebound" is if the US is bailing
them out. Japan has a LOT invested in stocks and other financial
instuments in the US.

If they sell them to try to recover some of the value, they're going
to wreck the US in the process.

Edgar S.
July 3rd 03, 01:17 AM
trent > wrote in message >...
> Duran wrote:
>
> > Deflation is capitalism's worst nightmare...read my other posts. It would
> > bring the American economy to it's knees. Japan is on the brink of
> > financial collapse after nearly a decade of sustained deflation.
>
>
> Actually, Japan is recently on the rebound...

the ONLY way Japan could be on a "rebound" is if the US is bailing
them out. Japan has a LOT invested in stocks and other financial
instuments in the US.

If they sell them to try to recover some of the value, they're going
to wreck the US in the process.

myname
July 3rd 03, 01:39 AM
JazzMan > wrote in message >...
> Bob wrote:
> >
> > The Federal Reserve, the mainstream press, and the talking heads on
> > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > interest rates to one percent to fight the dreaded deflation foe.
>
> We need all the deflation we can get. The people at the bottom
> need a break for a change, and the people at the top, well, they
> make and have so much wealth that the costs of food and shelter
> are completely and totally irrelevant to them.
>
> JazzMan

Deflation would be a disaster for the US. This isn't a complete
explanation of this, but:

You're a homeowner. Deflation hits. Your salary is dropping, which
means you have a harder and harder time paying off your mortgage each
month. You have a $150,000 mortgage on a $175,000 home. Your home
drops in value to $140,000, just as your salary finally goes low
enough that you can no longer make the mortgage payments.

The bank seizes your home, in the process losing lots of money, as
they can't even sell it for the amount that you owe them.

Everyone who is in debt is totally screwed in a deflationary
environment, since deflation causes the debt to be harder and harder
to pay. Lenders are also screwed, since everyone is defaulting on
their debts all over the place. Property owners are screwed, as their
equity disappears.

Deflation devastates the economy. The only people who come out ok are
those who are holding large amounts of cash, since cash becomes more
valuable relative to everything else under deflation.

People figure this out, and nobody wants to buy anything, since prices
are dropping all the time. Better to hold that cash and wait... which
further destroys the economy, as this leads to high unemployment.

myname
July 3rd 03, 01:39 AM
JazzMan > wrote in message >...
> Bob wrote:
> >
> > The Federal Reserve, the mainstream press, and the talking heads on
> > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > interest rates to one percent to fight the dreaded deflation foe.
>
> We need all the deflation we can get. The people at the bottom
> need a break for a change, and the people at the top, well, they
> make and have so much wealth that the costs of food and shelter
> are completely and totally irrelevant to them.
>
> JazzMan

Deflation would be a disaster for the US. This isn't a complete
explanation of this, but:

You're a homeowner. Deflation hits. Your salary is dropping, which
means you have a harder and harder time paying off your mortgage each
month. You have a $150,000 mortgage on a $175,000 home. Your home
drops in value to $140,000, just as your salary finally goes low
enough that you can no longer make the mortgage payments.

The bank seizes your home, in the process losing lots of money, as
they can't even sell it for the amount that you owe them.

Everyone who is in debt is totally screwed in a deflationary
environment, since deflation causes the debt to be harder and harder
to pay. Lenders are also screwed, since everyone is defaulting on
their debts all over the place. Property owners are screwed, as their
equity disappears.

Deflation devastates the economy. The only people who come out ok are
those who are holding large amounts of cash, since cash becomes more
valuable relative to everything else under deflation.

People figure this out, and nobody wants to buy anything, since prices
are dropping all the time. Better to hold that cash and wait... which
further destroys the economy, as this leads to high unemployment.

Edgar S.
July 3rd 03, 02:18 AM
"Duran" > wrote in message >...
> > The important thing to remember is that we are not in a deflationary
> > environment, the fed is only concerned about it and is tampering with
> rates
> > to boost investing / spending to prevent it.

Sorry...but no they're not. They don't have clue ONE about how to
either prevent nor cure deflation. Cutting interest rates is a measure
of their desperation. Japan's interest rates were cut to 0 but it
didn't do Japan any good. Nor will it do the US any good.
The Fed is beyond conserned about delfation. It's here, and they are
in a blind pig panic about it.

> Two other points I forgot to include:
>
> 1. To the original poster: Most of the price increases you posted in your
> original message are necessities. In a deflationary environment, the prices
> of necessities will in all likelyhood still increase.

Inflation is much much worse than anyone is letting on. YES, prices
are still going to continue to climb. Prices either go up, or the
company goes out of business.

> People with money
> will not delay spending the money heating their house (and all other
> utilities), driving their car to get to work (gas, car ins, maintenance),
> and doing everything else they need to do.
>
> 2. One of the reasons the fed may be concerned now more so than ever
> (deflation can creep in during in bust period of the business cycle) is that
> companies during the last boom carried extremely large amounts of debt.
> They do not have that much room to drop prices without going bankrupt.

ya think? :)

Edgar S.
July 3rd 03, 02:18 AM
"Duran" > wrote in message >...
> > The important thing to remember is that we are not in a deflationary
> > environment, the fed is only concerned about it and is tampering with
> rates
> > to boost investing / spending to prevent it.

Sorry...but no they're not. They don't have clue ONE about how to
either prevent nor cure deflation. Cutting interest rates is a measure
of their desperation. Japan's interest rates were cut to 0 but it
didn't do Japan any good. Nor will it do the US any good.
The Fed is beyond conserned about delfation. It's here, and they are
in a blind pig panic about it.

> Two other points I forgot to include:
>
> 1. To the original poster: Most of the price increases you posted in your
> original message are necessities. In a deflationary environment, the prices
> of necessities will in all likelyhood still increase.

Inflation is much much worse than anyone is letting on. YES, prices
are still going to continue to climb. Prices either go up, or the
company goes out of business.

> People with money
> will not delay spending the money heating their house (and all other
> utilities), driving their car to get to work (gas, car ins, maintenance),
> and doing everything else they need to do.
>
> 2. One of the reasons the fed may be concerned now more so than ever
> (deflation can creep in during in bust period of the business cycle) is that
> companies during the last boom carried extremely large amounts of debt.
> They do not have that much room to drop prices without going bankrupt.

ya think? :)

timeOday
July 3rd 03, 03:05 AM
Duran wrote:

>
> "JazzMan" > wrote in message
> ...
>> Bob wrote:
>> >
>> > The Federal Reserve, the mainstream press, and the talking heads on
>> > CNBC are all abuzz about the fears of deflation. The Fed has dropped
>> > interest rates to one percent to fight the dreaded deflation foe.
>>
>> We need all the deflation we can get. The people at the bottom
>> need a break for a change, and the people at the top, well, they
>> make and have so much wealth that the costs of food and shelter
>> are completely and totally irrelevant to them.
>
> Deflation is capitalism's worst nightmare...read my other posts. It would
> bring the American economy to it's knees. Japan is on the brink of
> financial collapse after nearly a decade of sustained deflation.


Is 0% really such a big, important threshold? I would think the difference
between 0.5% inflation and 0.5% deflation is no bigger than the difference
between 1.5% inflation and 0.5% inflation, or is this not so?

timeOday
July 3rd 03, 03:05 AM
Duran wrote:

>
> "JazzMan" > wrote in message
> ...
>> Bob wrote:
>> >
>> > The Federal Reserve, the mainstream press, and the talking heads on
>> > CNBC are all abuzz about the fears of deflation. The Fed has dropped
>> > interest rates to one percent to fight the dreaded deflation foe.
>>
>> We need all the deflation we can get. The people at the bottom
>> need a break for a change, and the people at the top, well, they
>> make and have so much wealth that the costs of food and shelter
>> are completely and totally irrelevant to them.
>
> Deflation is capitalism's worst nightmare...read my other posts. It would
> bring the American economy to it's knees. Japan is on the brink of
> financial collapse after nearly a decade of sustained deflation.


Is 0% really such a big, important threshold? I would think the difference
between 0.5% inflation and 0.5% deflation is no bigger than the difference
between 1.5% inflation and 0.5% inflation, or is this not so?

JazzMan
July 3rd 03, 03:33 AM
Edgar S. wrote:
>
> JazzMan > wrote in message >...
> > Bob wrote:
> > >
> > > The Federal Reserve, the mainstream press, and the talking heads on
> > > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > > interest rates to one percent to fight the dreaded deflation foe.
> >
> > We need all the deflation we can get.
>
> Deflation isn't a GOOD thing. Deflation sounds like Inflation, but
> it's NOT the opposite of inflation. The two things are only related in
> that they refer to currency.
>
> Deflation means ppl don't have the cash to BUY anything. Ppl don't buy
> from the merchants, and this means they'll go out of business even
> faster.
>
> > The people at the bottom
> > need a break
>
> Don't be retarded. People at the bottom are never going to "get a
> break" as u so stupidly put it. Have u been eating paint chips?


Hmmmmmmm...... paint chips-s-s-s-s-s.........

I saved up enough money to buy a house, well, enough
to pay what a small but acceptible house cost back
when I started saving 15 years ago. Too bad house
prices doubled and tripled in that time period. In
terms of absolute dollars, I'm further away from
the dream, now fantasy, of owning my home than I
was 15 years ago.

If deflation would cause a significant rearward
slide in home prices, I'm all for it.

I don't want to die a renter.

JazzMan
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JazzMan
July 3rd 03, 03:33 AM
Edgar S. wrote:
>
> JazzMan > wrote in message >...
> > Bob wrote:
> > >
> > > The Federal Reserve, the mainstream press, and the talking heads on
> > > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > > interest rates to one percent to fight the dreaded deflation foe.
> >
> > We need all the deflation we can get.
>
> Deflation isn't a GOOD thing. Deflation sounds like Inflation, but
> it's NOT the opposite of inflation. The two things are only related in
> that they refer to currency.
>
> Deflation means ppl don't have the cash to BUY anything. Ppl don't buy
> from the merchants, and this means they'll go out of business even
> faster.
>
> > The people at the bottom
> > need a break
>
> Don't be retarded. People at the bottom are never going to "get a
> break" as u so stupidly put it. Have u been eating paint chips?


Hmmmmmmm...... paint chips-s-s-s-s-s.........

I saved up enough money to buy a house, well, enough
to pay what a small but acceptible house cost back
when I started saving 15 years ago. Too bad house
prices doubled and tripled in that time period. In
terms of absolute dollars, I'm further away from
the dream, now fantasy, of owning my home than I
was 15 years ago.

If deflation would cause a significant rearward
slide in home prices, I'm all for it.

I don't want to die a renter.

JazzMan
--
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Please reply to jsavage"at"airmail.net.
Curse those darned bulk e-mailers!
***************************************

JazzMan
July 3rd 03, 03:44 AM
myname wrote:
>
> JazzMan > wrote in message >...
> > Bob wrote:
> > >
> > > The Federal Reserve, the mainstream press, and the talking heads on
> > > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > > interest rates to one percent to fight the dreaded deflation foe.
> >
> > We need all the deflation we can get. The people at the bottom
> > need a break for a change, and the people at the top, well, they
> > make and have so much wealth that the costs of food and shelter
> > are completely and totally irrelevant to them.
> >
> > JazzMan
>
> Deflation would be a disaster for the US. This isn't a complete
> explanation of this, but:
>
> You're a homeowner. Deflation hits. Your salary is dropping, which
> means you have a harder and harder time paying off your mortgage each
> month. You have a $150,000 mortgage on a $175,000 home. Your home
> drops in value to $140,000, just as your salary finally goes low
> enough that you can no longer make the mortgage payments.
>

LOL! Muahahahaha!!!!

$175k? Hahahahaha!!!!

Man, anything over 60k is the same as a million bucks because
my ability to buy either is zero, zilch, zip. :)

>
> Everyone who is in debt is totally screwed in a deflationary
> environment, since deflation causes the debt to be harder and harder
> to pay. Lenders are also screwed, since everyone is defaulting on
> their debts all over the place. Property owners are screwed, as their
> equity disappears.
>

Well, I'm debt-free, have been all my life, so that's irrelevant
to me. The nutcase skyrocketing house prices are partly to blame
on people who are able to spend ridiculous amounts of money thanks
to how easy it is to get debt. Let them reap what they sowed. In
actuality, my only real hope of buying a house anymore is if
the real estate price bubble pops as big as the dot.com bubble
did.


> People figure this out, and nobody wants to buy anything, since prices
> are dropping all the time. Better to hold that cash and wait... which
> further destroys the economy, as this leads to high unemployment.

I'm holding on to my cash and not spending because I don't
make enough to spend like most people do. Hence my presence
here. My energy costs are skyrocketing, I'm having to budget
based on my heating and cooling costs in the next 12 months
being double, maybe even triple the last 12 months. Heck, my
gas company is adding on a $9.80 surcharge to the 0.83 per
thousand cubic feet of gas that I pay. Since my gas company
supplies gas to my electric company, in fact is owned by my
electric company, I'm expecting this eleven hundred percent
markup to apply for my electricity costs this summer. :(
I could very easily be paying over 25% of my net income to
the electric company this summer.

Doesn't leave much for discretionary spending, does it. :(

JazzMan
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JazzMan
July 3rd 03, 03:44 AM
myname wrote:
>
> JazzMan > wrote in message >...
> > Bob wrote:
> > >
> > > The Federal Reserve, the mainstream press, and the talking heads on
> > > CNBC are all abuzz about the fears of deflation. The Fed has dropped
> > > interest rates to one percent to fight the dreaded deflation foe.
> >
> > We need all the deflation we can get. The people at the bottom
> > need a break for a change, and the people at the top, well, they
> > make and have so much wealth that the costs of food and shelter
> > are completely and totally irrelevant to them.
> >
> > JazzMan
>
> Deflation would be a disaster for the US. This isn't a complete
> explanation of this, but:
>
> You're a homeowner. Deflation hits. Your salary is dropping, which
> means you have a harder and harder time paying off your mortgage each
> month. You have a $150,000 mortgage on a $175,000 home. Your home
> drops in value to $140,000, just as your salary finally goes low
> enough that you can no longer make the mortgage payments.
>

LOL! Muahahahaha!!!!

$175k? Hahahahaha!!!!

Man, anything over 60k is the same as a million bucks because
my ability to buy either is zero, zilch, zip. :)

>
> Everyone who is in debt is totally screwed in a deflationary
> environment, since deflation causes the debt to be harder and harder
> to pay. Lenders are also screwed, since everyone is defaulting on
> their debts all over the place. Property owners are screwed, as their
> equity disappears.
>

Well, I'm debt-free, have been all my life, so that's irrelevant
to me. The nutcase skyrocketing house prices are partly to blame
on people who are able to spend ridiculous amounts of money thanks
to how easy it is to get debt. Let them reap what they sowed. In
actuality, my only real hope of buying a house anymore is if
the real estate price bubble pops as big as the dot.com bubble
did.


> People figure this out, and nobody wants to buy anything, since prices
> are dropping all the time. Better to hold that cash and wait... which
> further destroys the economy, as this leads to high unemployment.

I'm holding on to my cash and not spending because I don't
make enough to spend like most people do. Hence my presence
here. My energy costs are skyrocketing, I'm having to budget
based on my heating and cooling costs in the next 12 months
being double, maybe even triple the last 12 months. Heck, my
gas company is adding on a $9.80 surcharge to the 0.83 per
thousand cubic feet of gas that I pay. Since my gas company
supplies gas to my electric company, in fact is owned by my
electric company, I'm expecting this eleven hundred percent
markup to apply for my electricity costs this summer. :(
I could very easily be paying over 25% of my net income to
the electric company this summer.

Doesn't leave much for discretionary spending, does it. :(

JazzMan
--
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***************************************

lpogoda
July 3rd 03, 03:53 AM
timeOday wrote in message >...
>
>Is 0% really such a big, important threshold? I would think the difference
>between 0.5% inflation and 0.5% deflation is no bigger than the difference
>between 1.5% inflation and 0.5% inflation, or is this not so?

The arithmetical difference is same, but the effect on behavior is not. If
you're right on the edge of a buy or not buy decision, one thing that can
tip you toward "buy" is the belief that the item in question will never be
this cheap again, that next year's price will be higher because of inflation
if for no other reason.

On the other hand, if you think next year's price will be lower because of
deflation, you may tilt toward "not buy".

In the first case, your purchase helps someone get or keep a job - the money
you spent pays someone's wages, the sales tax funds some state or local
government expenditure. In the second case, an unfortunate someone doesn't
get a job or loses one - there's no need to pay someone to provide a good or
service that no one wants to buy.


If inflation is really bad (like in the US in the 1970's) there's no
decision to make - you buy, you buy on borrowed money maybe, but you buy.
For a while there, you knew that whatever it was would cost upwards of 20%
more next year, and even if you charged it, you'd be paying it back with
cheaper dollars - "buy now, pay later" in some cases was cheaper in working
hours, when all was said and done, than simply "buying now", while money in
the bank lost purchasing power, even after interest and before the taxes on
that interest.

Still, there have been periods when the US experienced sustained deflation
and the country as a whole prospered - the years between the Civil War and
1900 or so for example.

lpogoda
July 3rd 03, 03:53 AM
timeOday wrote in message >...
>
>Is 0% really such a big, important threshold? I would think the difference
>between 0.5% inflation and 0.5% deflation is no bigger than the difference
>between 1.5% inflation and 0.5% inflation, or is this not so?

The arithmetical difference is same, but the effect on behavior is not. If
you're right on the edge of a buy or not buy decision, one thing that can
tip you toward "buy" is the belief that the item in question will never be
this cheap again, that next year's price will be higher because of inflation
if for no other reason.

On the other hand, if you think next year's price will be lower because of
deflation, you may tilt toward "not buy".

In the first case, your purchase helps someone get or keep a job - the money
you spent pays someone's wages, the sales tax funds some state or local
government expenditure. In the second case, an unfortunate someone doesn't
get a job or loses one - there's no need to pay someone to provide a good or
service that no one wants to buy.


If inflation is really bad (like in the US in the 1970's) there's no
decision to make - you buy, you buy on borrowed money maybe, but you buy.
For a while there, you knew that whatever it was would cost upwards of 20%
more next year, and even if you charged it, you'd be paying it back with
cheaper dollars - "buy now, pay later" in some cases was cheaper in working
hours, when all was said and done, than simply "buying now", while money in
the bank lost purchasing power, even after interest and before the taxes on
that interest.

Still, there have been periods when the US experienced sustained deflation
and the country as a whole prospered - the years between the Civil War and
1900 or so for example.

singha_lvr
July 3rd 03, 03:58 AM
On 2 Jul 2003 16:39:19 -0700, (myname) wrote:

>Deflation devastates the economy. The only people who come out ok are
>those who are holding large amounts of cash, since cash becomes more
>valuable relative to everything else under deflation.
>
>People figure this out, and nobody wants to buy anything, since prices
>are dropping all the time. Better to hold that cash and wait... which
>further destroys the economy, as this leads to high unemployment.

I do think that as americans we tend to take out far too much debt.
Many otherwise well-off Americans are only 2 paychecks from being
homeless.

The only debt I have left is my mortage and my student loan. I will
have my mortgage paid off in 15 years (I'll be 48.) I'll never take
out another loan again if I can avoid it. I pay cash for cars. (If I
only have $3000 when I need a car I only buy a $3000 car until I have
more cash.)

After living through the tech industry during the dotCrash I've
learned not to leave my a$$ hanging out there with a lot of debt
again. I'm happier for it.

singha_lvr
July 3rd 03, 03:58 AM
On 2 Jul 2003 16:39:19 -0700, (myname) wrote:

>Deflation devastates the economy. The only people who come out ok are
>those who are holding large amounts of cash, since cash becomes more
>valuable relative to everything else under deflation.
>
>People figure this out, and nobody wants to buy anything, since prices
>are dropping all the time. Better to hold that cash and wait... which
>further destroys the economy, as this leads to high unemployment.

I do think that as americans we tend to take out far too much debt.
Many otherwise well-off Americans are only 2 paychecks from being
homeless.

The only debt I have left is my mortage and my student loan. I will
have my mortgage paid off in 15 years (I'll be 48.) I'll never take
out another loan again if I can avoid it. I pay cash for cars. (If I
only have $3000 when I need a car I only buy a $3000 car until I have
more cash.)

After living through the tech industry during the dotCrash I've
learned not to leave my a$$ hanging out there with a lot of debt
again. I'm happier for it.

IleneB
July 3rd 03, 04:38 AM
In article >, Pat Meadows
> wrote:

> I don't think we've ever
> experienced deflation.

Not while there were federal programs like Social Security. There was
deflation during the Depression (worldwide) and then programs started
after that.

Ilene B

IleneB
July 3rd 03, 04:38 AM
In article >, Pat Meadows
> wrote:

> I don't think we've ever
> experienced deflation.

Not while there were federal programs like Social Security. There was
deflation during the Depression (worldwide) and then programs started
after that.

Ilene B

SpammersDie
July 3rd 03, 05:03 AM
>
> LOL! Muahahahaha!!!!
>
> $175k? Hahahahaha!!!!
>
> Man, anything over 60k is the same as a million bucks because
> my ability to buy either is zero, zilch, zip. :)
>
> >
> > Everyone who is in debt is totally screwed in a deflationary
> > environment, since deflation causes the debt to be harder and harder
> > to pay. Lenders are also screwed, since everyone is defaulting on
> > their debts all over the place. Property owners are screwed, as their
> > equity disappears.
> >
>
> Well, I'm debt-free, have been all my life, so that's irrelevant
> to me. The nutcase skyrocketing house prices are partly to blame
> on people who are able to spend ridiculous amounts of money thanks
> to how easy it is to get debt. Let them reap what they sowed. In
> actuality, my only real hope of buying a house anymore is if
> the real estate price bubble pops as big as the dot.com bubble
> did.

Lenders are screwed too, remember?

And if you keep your money in any of the following:

- Bonds or retirement funds invested in bonds
- Money market funds
- Bank accounts

you're a lender. FDIC insurance you say? How much money do you think is in
that system anyway? If banks start collapsing left and right because their
debtors are defaulting and they're stuck with unsellable foreclosed homes,
you won't be able to spread a cracker on what FDIC will get you.

I guess if you have enough money to live without ever working again *and*
you're willing to keep it all in your own vault, you won't notice any harm.
But that doesn't sound like it describes you.

SpammersDie
July 3rd 03, 05:03 AM
>
> LOL! Muahahahaha!!!!
>
> $175k? Hahahahaha!!!!
>
> Man, anything over 60k is the same as a million bucks because
> my ability to buy either is zero, zilch, zip. :)
>
> >
> > Everyone who is in debt is totally screwed in a deflationary
> > environment, since deflation causes the debt to be harder and harder
> > to pay. Lenders are also screwed, since everyone is defaulting on
> > their debts all over the place. Property owners are screwed, as their
> > equity disappears.
> >
>
> Well, I'm debt-free, have been all my life, so that's irrelevant
> to me. The nutcase skyrocketing house prices are partly to blame
> on people who are able to spend ridiculous amounts of money thanks
> to how easy it is to get debt. Let them reap what they sowed. In
> actuality, my only real hope of buying a house anymore is if
> the real estate price bubble pops as big as the dot.com bubble
> did.

Lenders are screwed too, remember?

And if you keep your money in any of the following:

- Bonds or retirement funds invested in bonds
- Money market funds
- Bank accounts

you're a lender. FDIC insurance you say? How much money do you think is in
that system anyway? If banks start collapsing left and right because their
debtors are defaulting and they're stuck with unsellable foreclosed homes,
you won't be able to spread a cracker on what FDIC will get you.

I guess if you have enough money to live without ever working again *and*
you're willing to keep it all in your own vault, you won't notice any harm.
But that doesn't sound like it describes you.

Lecher9000
July 3rd 03, 05:11 AM
>2. More and more consumers that do have money and income (IE, a job), hoard
>it because prices will be lower in the future than they are today.

Hmmm... There are an awful lot of IT people who were making (and spending)
$60k to $80K per year, who are now making $20 to $40K at non IT jobs, or are
naively collecting undemployment waiting for their big break. They are
obviously spending less now.

And I wonder what the Indians, who now have those IT jobs, at $10K to $20K per
year, are buying with it. I would imagine they are all spending it on
Indian-produced goods and services.

And yes, I was a hoarder for the 3 years before I was laid off from my IT job,
because I saw the writing on the wall, and I continue to hoard whatever $ I
come by now.

Lecher9000
July 3rd 03, 05:11 AM
>2. More and more consumers that do have money and income (IE, a job), hoard
>it because prices will be lower in the future than they are today.

Hmmm... There are an awful lot of IT people who were making (and spending)
$60k to $80K per year, who are now making $20 to $40K at non IT jobs, or are
naively collecting undemployment waiting for their big break. They are
obviously spending less now.

And I wonder what the Indians, who now have those IT jobs, at $10K to $20K per
year, are buying with it. I would imagine they are all spending it on
Indian-produced goods and services.

And yes, I was a hoarder for the 3 years before I was laid off from my IT job,
because I saw the writing on the wall, and I continue to hoard whatever $ I
come by now.

Lecher9000
July 3rd 03, 05:29 AM
>I suppose I'll not really enjoy a deflationary period, based on what my
>older family members told me about it, but...the thought of economists
>"in a blind pig panic" is extremely satisfying.

I'd find it satisfying to see some CEO's, who outsourced IT to India, in a
"blind pig" panic inside a 2 man jail cell with a macho gay.

Lecher9000
July 3rd 03, 05:29 AM
>I suppose I'll not really enjoy a deflationary period, based on what my
>older family members told me about it, but...the thought of economists
>"in a blind pig panic" is extremely satisfying.

I'd find it satisfying to see some CEO's, who outsourced IT to India, in a
"blind pig" panic inside a 2 man jail cell with a macho gay.

Duran
July 3rd 03, 05:30 AM
> If deflation would cause a significant rearward
> slide in home prices, I'm all for it.

It sounds great doesn't it? The problem is that you have a much greater
probability of not only not buying a house, but even paying rent as in a
deflatinary environment, the odds are great that unemployment will skyrocket
to unprecendented levels.

Duran
July 3rd 03, 05:30 AM
> If deflation would cause a significant rearward
> slide in home prices, I'm all for it.

It sounds great doesn't it? The problem is that you have a much greater
probability of not only not buying a house, but even paying rent as in a
deflatinary environment, the odds are great that unemployment will skyrocket
to unprecendented levels.

test user.
July 3rd 03, 05:36 AM
True prices for durable goods have been falling, and they may continue to be
depressed.

The truth is that the capitalist system only works when the economy is
expanding. When the economy shrinks, it doesn't work.

I think the big reason the econimist are worried about our economy
reflecting Japan is that like Japan, we are not an exporting country. We
can not augment a decrease in national spending with and increase in
international spending. Japan can't export much because the yen is worth
too much, and we can't export because we don't make anything anymore.

"Bob" > wrote in message
m...
> The Federal Reserve, the mainstream press, and the talking heads on
> CNBC are all abuzz about the fears of deflation. The Fed has dropped
> interest rates to one percent to fight the dreaded deflation foe.
> Other than prices falling for electronics and clothing made by slave
> labor in Third World counties, I have compiled a list of my personal
> costs this year. Can anyone explain where exactly is this deflation?
> Electric- Up 12.4%
> Car Ins.- Up 10%
> Property Taxes-up 6%
> Health Ins.- up 30%
> Cable-up 10%
> Home Ins- up 10%
> Phone-up 10%
> Food- up 6%
> Lawn Guy- up 10%
> Plumber- up 15%
> Water-up 10%
> Auto Mechanic-up 10%
> Hot Dog Lady- up 15%
> Barber- up 15%
> Carpet Cleaner- up 15%
> Rent- up 10%
> Gas- down 5%
> Natural Gas- up 20%
>
> I wonder how the millions of seniors on fixed incomes are coping with
> this so called deflation and their income from their savings wiped
> out?

test user.
July 3rd 03, 05:36 AM
True prices for durable goods have been falling, and they may continue to be
depressed.

The truth is that the capitalist system only works when the economy is
expanding. When the economy shrinks, it doesn't work.

I think the big reason the econimist are worried about our economy
reflecting Japan is that like Japan, we are not an exporting country. We
can not augment a decrease in national spending with and increase in
international spending. Japan can't export much because the yen is worth
too much, and we can't export because we don't make anything anymore.

"Bob" > wrote in message
m...
> The Federal Reserve, the mainstream press, and the talking heads on
> CNBC are all abuzz about the fears of deflation. The Fed has dropped
> interest rates to one percent to fight the dreaded deflation foe.
> Other than prices falling for electronics and clothing made by slave
> labor in Third World counties, I have compiled a list of my personal
> costs this year. Can anyone explain where exactly is this deflation?
> Electric- Up 12.4%
> Car Ins.- Up 10%
> Property Taxes-up 6%
> Health Ins.- up 30%
> Cable-up 10%
> Home Ins- up 10%
> Phone-up 10%
> Food- up 6%
> Lawn Guy- up 10%
> Plumber- up 15%
> Water-up 10%
> Auto Mechanic-up 10%
> Hot Dog Lady- up 15%
> Barber- up 15%
> Carpet Cleaner- up 15%
> Rent- up 10%
> Gas- down 5%
> Natural Gas- up 20%
>
> I wonder how the millions of seniors on fixed incomes are coping with
> this so called deflation and their income from their savings wiped
> out?

Edgar S.
July 3rd 03, 07:33 AM
Albert Wagner > wrote in message >...
> On 2 Jul 2003 17:18:13 -0700
> (Edgar S.) wrote:
> <snip>
> > Sorry...but no they're not. They don't have clue ONE about how to
> > either prevent nor cure deflation. Cutting interest rates is a measure
> > of their desperation. Japan's interest rates were cut to 0 but it
> > didn't do Japan any good. Nor will it do the US any good.
> > The Fed is beyond conserned about delfation. It's here, and they are
> > in a blind pig panic about it.
> <snip>
> I suppose I'll not really enjoy a deflationary period, based on what my
> older family members told me about it, but...the thought of economists
> "in a blind pig panic" is extremely satisfying.


don't know why u'd feel that way. It means big trouble...

Edgar S.
July 3rd 03, 07:33 AM
Albert Wagner > wrote in message >...
> On 2 Jul 2003 17:18:13 -0700
> (Edgar S.) wrote:
> <snip>
> > Sorry...but no they're not. They don't have clue ONE about how to
> > either prevent nor cure deflation. Cutting interest rates is a measure
> > of their desperation. Japan's interest rates were cut to 0 but it
> > didn't do Japan any good. Nor will it do the US any good.
> > The Fed is beyond conserned about delfation. It's here, and they are
> > in a blind pig panic about it.
> <snip>
> I suppose I'll not really enjoy a deflationary period, based on what my
> older family members told me about it, but...the thought of economists
> "in a blind pig panic" is extremely satisfying.


don't know why u'd feel that way. It means big trouble...

Edgar S.
July 3rd 03, 07:42 AM
Chris Hill > wrote in message >...
> On Tue, 01 Jul 2003 23:56:16 GMT, "Shag" > wrote:
>
> >
> >I've heard people say this, but it seems to me that the
> >government can just "print money" to increase the money
> >supply (that's not how they would do it, really, but
> >functionally that's what it's equivalent to).

the US gov doesn't print money. Money is printed by the Fed, which is
a private bank based in Europe. The Fed then LENDS the printed bills
to the US at face value. Americans don't OWN their own currency.


More money
> >chasing the same amount of goods would lead to
> >inflation

Ours is a fiat currency. Fiat "money" always inflates. Always has,
always will. It's not based on anything real.


, or in this case, re-flation. What am I missing here?
>
>
> What would happen to the stock and bond markets' foreign investors.

Foreign investors are bailing rite now. They're selling dollars and
buying euros.

Edgar S.
July 3rd 03, 07:42 AM
Chris Hill > wrote in message >...
> On Tue, 01 Jul 2003 23:56:16 GMT, "Shag" > wrote:
>
> >
> >I've heard people say this, but it seems to me that the
> >government can just "print money" to increase the money
> >supply (that's not how they would do it, really, but
> >functionally that's what it's equivalent to).

the US gov doesn't print money. Money is printed by the Fed, which is
a private bank based in Europe. The Fed then LENDS the printed bills
to the US at face value. Americans don't OWN their own currency.


More money
> >chasing the same amount of goods would lead to
> >inflation

Ours is a fiat currency. Fiat "money" always inflates. Always has,
always will. It's not based on anything real.


, or in this case, re-flation. What am I missing here?
>
>
> What would happen to the stock and bond markets' foreign investors.

Foreign investors are bailing rite now. They're selling dollars and
buying euros.

Edgar S.
July 3rd 03, 07:58 AM
"Duran" > wrote in message >...
> <snip>
>
> > I wonder how the millions of seniors on fixed incomes are coping with
> > this so called deflation and their income from their savings wiped
> > out?
>
> You are seeing prices increases because we are NOT in a deflationary
> environment.

Sorry- but we ARE. We r having BOTH inflation and deflation rite now
in the US. They're not mutually exclusive, opposites, or even defined
by each other in terms.

....the Fed is only concerned that we are headed there.

nope. If it were not already a done deal, with the US smack in the
middle of it, the Fed would keep their traps shut. As they always do.
They're VERY close mouthed.... essentially happy with the way things
go here.

The
> reason deflation is making the news more now then ever is because many
> investors / economists / government officials see uncanny similarities
> between what happened in Japan that lead to years of deflation (which is
> still occurring I believe) and what is currently happening in the United
> States.

Ok, there's ur answer. the Fed squeeked up 'cause they're "busted".
Enuf US economists mentioned it that the Fed couldn't pretend it
wasn't going on. Or..they're prepping us.


> Also, in a deflationary environment, your money is actually worth more. So
> senior's and everyone won't have their savings wiped out.

The money is "worth more" 'cause it's harder to get, and nobody has
access to much of it.
LOTS of pple have been wiped out by the stock crash. The 401K's are
mostly destroyed.

If you are
> referring to the increases in prices you mention, will, that is a concern,
> but that is inflation not deflation.

So... what do u do? PLEASE don't tell us u work with money...



The fact is, most people on this group
> have only ever known inflation. Seniors can purchase inflation indexed
> savings bonds (and a host of other products) to help them with inflation.

*shudder* do u sell those bonds? This is a god awful time to be
buying US bonds.

> It has been around a long time and is someone we should all be expecting and
> should all be planning for.

> Now, deflation is probably the worst thing that can happen to any country.
> It can cripple even the most powerful economies. The deflation the fed is
> referring to is not lower wages or cheaper foreign labor, it is consumer
> spending. If consumers don't spend (no demand), prices will fall

Which is PRECISELY what's happening 'cause so many jobs were lost, ppl
don't HAVE the discresionary incomes they did.

. When
> this happens, 2 important things happen:

> 1. Companies cut their prices to increase demand for their product, other
> companies follow suit to remain competitive. Since a lot of these companies
> have many fixed costs (long-term debt, salaries, leases), they cannot pay
> off those fixed costs because sales are declining while the costs are not.
> Layoffs result, which lowers demand even more (less consumers now have the
> money to spend), which leads to more layoffs, which leads to less demand,
> and this cycle repeats over and over leading to lower and lower prices.

Ok... so u know exactly what's happening. But STILL deny we are also
in a deflationary phase.


> 2. More and more consumers that do have money and income (IE, a job), hoard
> it because prices will be lower in the future than they are today.
> Inflation encourages people to purchase what they need when they get their
> money.
>
> The important thing to remember is that we are not in a deflationary
> environment

Liar.

, the fed is only concerned about it and is tampering with rates
> to boost investing / spending to prevent it.

U said that three times already. It doesn't get any more believeable
as u keep repeating it.

Edgar S.
July 3rd 03, 07:58 AM
"Duran" > wrote in message >...
> <snip>
>
> > I wonder how the millions of seniors on fixed incomes are coping with
> > this so called deflation and their income from their savings wiped
> > out?
>
> You are seeing prices increases because we are NOT in a deflationary
> environment.

Sorry- but we ARE. We r having BOTH inflation and deflation rite now
in the US. They're not mutually exclusive, opposites, or even defined
by each other in terms.

....the Fed is only concerned that we are headed there.

nope. If it were not already a done deal, with the US smack in the
middle of it, the Fed would keep their traps shut. As they always do.
They're VERY close mouthed.... essentially happy with the way things
go here.

The
> reason deflation is making the news more now then ever is because many
> investors / economists / government officials see uncanny similarities
> between what happened in Japan that lead to years of deflation (which is
> still occurring I believe) and what is currently happening in the United
> States.

Ok, there's ur answer. the Fed squeeked up 'cause they're "busted".
Enuf US economists mentioned it that the Fed couldn't pretend it
wasn't going on. Or..they're prepping us.


> Also, in a deflationary environment, your money is actually worth more. So
> senior's and everyone won't have their savings wiped out.

The money is "worth more" 'cause it's harder to get, and nobody has
access to much of it.
LOTS of pple have been wiped out by the stock crash. The 401K's are
mostly destroyed.

If you are
> referring to the increases in prices you mention, will, that is a concern,
> but that is inflation not deflation.

So... what do u do? PLEASE don't tell us u work with money...



The fact is, most people on this group
> have only ever known inflation. Seniors can purchase inflation indexed
> savings bonds (and a host of other products) to help them with inflation.

*shudder* do u sell those bonds? This is a god awful time to be
buying US bonds.

> It has been around a long time and is someone we should all be expecting and
> should all be planning for.

> Now, deflation is probably the worst thing that can happen to any country.
> It can cripple even the most powerful economies. The deflation the fed is
> referring to is not lower wages or cheaper foreign labor, it is consumer
> spending. If consumers don't spend (no demand), prices will fall

Which is PRECISELY what's happening 'cause so many jobs were lost, ppl
don't HAVE the discresionary incomes they did.

. When
> this happens, 2 important things happen:

> 1. Companies cut their prices to increase demand for their product, other
> companies follow suit to remain competitive. Since a lot of these companies
> have many fixed costs (long-term debt, salaries, leases), they cannot pay
> off those fixed costs because sales are declining while the costs are not.
> Layoffs result, which lowers demand even more (less consumers now have the
> money to spend), which leads to more layoffs, which leads to less demand,
> and this cycle repeats over and over leading to lower and lower prices.

Ok... so u know exactly what's happening. But STILL deny we are also
in a deflationary phase.


> 2. More and more consumers that do have money and income (IE, a job), hoard
> it because prices will be lower in the future than they are today.
> Inflation encourages people to purchase what they need when they get their
> money.
>
> The important thing to remember is that we are not in a deflationary
> environment

Liar.

, the fed is only concerned about it and is tampering with rates
> to boost investing / spending to prevent it.

U said that three times already. It doesn't get any more believeable
as u keep repeating it.

Edgar S.
July 3rd 03, 08:07 AM
JazzMan > wrote in message >...
> I saved up enough money to buy a house, well, enough
> to pay what a small but acceptible house cost back
> when I started saving 15 years ago. Too bad house
> prices doubled and tripled in that time period. In
> terms of absolute dollars, I'm further away from
> the dream, now fantasy, of owning my home than I
> was 15 years ago.

Not necessarily. There's a housing bubble. It's going to pop before
too long. When it does, bet u can buy that little house and land
outrite with your nest egg.


> If deflation would cause a significant rearward
> slide in home prices, I'm all for it.

Ok.. deflation is not your friend. What will happen is many people
will not be able to pay their new mortgages and a lot of ppl all at
the same time will go into bankruptcy. The banks will start forclosing
on all the houses.



> I don't want to die a renter.

Nobody REALLY owns land in the US. It's the government's land. U just
pay rent on it.

Edgar S.
July 3rd 03, 08:07 AM
JazzMan > wrote in message >...
> I saved up enough money to buy a house, well, enough
> to pay what a small but acceptible house cost back
> when I started saving 15 years ago. Too bad house
> prices doubled and tripled in that time period. In
> terms of absolute dollars, I'm further away from
> the dream, now fantasy, of owning my home than I
> was 15 years ago.

Not necessarily. There's a housing bubble. It's going to pop before
too long. When it does, bet u can buy that little house and land
outrite with your nest egg.


> If deflation would cause a significant rearward
> slide in home prices, I'm all for it.

Ok.. deflation is not your friend. What will happen is many people
will not be able to pay their new mortgages and a lot of ppl all at
the same time will go into bankruptcy. The banks will start forclosing
on all the houses.



> I don't want to die a renter.

Nobody REALLY owns land in the US. It's the government's land. U just
pay rent on it.

Albert Wagner
July 3rd 03, 09:25 AM
On 2 Jul 2003 23:07:02 -0700
(Edgar S.) wrote:
<snip>
> Nobody REALLY owns land in the US. It's the government's land. U just
> pay rent on it.

All people die. Rich and poor. No one really OWNS anything. This is
the dirty little secret that those who define success with money have
forgotten.

Albert Wagner
July 3rd 03, 09:25 AM
On 2 Jul 2003 23:07:02 -0700
(Edgar S.) wrote:
<snip>
> Nobody REALLY owns land in the US. It's the government's land. U just
> pay rent on it.

All people die. Rich and poor. No one really OWNS anything. This is
the dirty little secret that those who define success with money have
forgotten.

Albert Wagner
July 3rd 03, 01:12 PM
On Thu, 03 Jul 2003 08:49:27 -0700
Dennis > wrote:

> On Wed, 2 Jul 2003 15:50:33 -0500, Albert Wagner >
> wrote:
>
> >I suppose I'll not really enjoy a deflationary period, based on what
> >my older family members told me about it, but...the thought of
> >economists"in a blind pig panic" is extremely satisfying.
>
> Goddamn face! Off with the nose!
> That'll show'em!

Yes! Good riddance to any nose that that becomes cancerous. You know
full well what I think of economists and their so-called "science." If
by giving up any part of my anatomy I could guarantee that the great lie
of capitalist economics would be exposed I would gladly do it.

Albert Wagner
July 3rd 03, 01:12 PM
On Thu, 03 Jul 2003 08:49:27 -0700
Dennis > wrote:

> On Wed, 2 Jul 2003 15:50:33 -0500, Albert Wagner >
> wrote:
>
> >I suppose I'll not really enjoy a deflationary period, based on what
> >my older family members told me about it, but...the thought of
> >economists"in a blind pig panic" is extremely satisfying.
>
> Goddamn face! Off with the nose!
> That'll show'em!

Yes! Good riddance to any nose that that becomes cancerous. You know
full well what I think of economists and their so-called "science." If
by giving up any part of my anatomy I could guarantee that the great lie
of capitalist economics would be exposed I would gladly do it.

Dennis
July 3rd 03, 05:49 PM
On Wed, 2 Jul 2003 15:50:33 -0500, Albert Wagner >
wrote:

>I suppose I'll not really enjoy a deflationary period, based on what my
>older family members told me about it, but...the thought of economists
>"in a blind pig panic" is extremely satisfying.

Goddamn face! Off with the nose!
That'll show'em!

the Dennis formerly known as (evil)
--
"There is a fine line between participation and mockery" - Wally

Dennis
July 3rd 03, 05:49 PM
On Wed, 2 Jul 2003 15:50:33 -0500, Albert Wagner >
wrote:

>I suppose I'll not really enjoy a deflationary period, based on what my
>older family members told me about it, but...the thought of economists
>"in a blind pig panic" is extremely satisfying.

Goddamn face! Off with the nose!
That'll show'em!

the Dennis formerly known as (evil)
--
"There is a fine line between participation and mockery" - Wally

SoCalMike
July 4th 03, 12:40 AM
> Not necessarily. There's a housing bubble. It's going to pop before
> too long. When it does, bet u can buy that little house and land
> outrite with your nest egg.


depends on where you live. in So Cal, everything ive read suggests that the
people that are buying are like me... first time buyers, who want a place to
live. the rest are just moving up a notch. not much speculation going on,
just people either moving up, or gettting out of an apartment or moms house.

SoCalMike
July 4th 03, 12:40 AM
> Not necessarily. There's a housing bubble. It's going to pop before
> too long. When it does, bet u can buy that little house and land
> outrite with your nest egg.


depends on where you live. in So Cal, everything ive read suggests that the
people that are buying are like me... first time buyers, who want a place to
live. the rest are just moving up a notch. not much speculation going on,
just people either moving up, or gettting out of an apartment or moms house.

Shag
July 4th 03, 02:10 AM
"Edgar S." > wrote in message
om...
> Chris Hill > wrote in message
>...
> > On Tue, 01 Jul 2003 23:56:16 GMT, "Shag" > wrote:
> > >
> > >I've heard people say this, but it seems to me that the
> > >government can just "print money" to increase the money
> > >supply (that's not how they would do it, really, but
> > >functionally that's what it's equivalent to).
>
> the US gov doesn't print money. Money is printed by the Fed, which is
> a private bank based in Europe. The Fed then LENDS the printed bills
> to the US at face value. Americans don't OWN their own currency.

Huh? Could you speak more plainly, I'm not getting your drift.

> More money
> > >chasing the same amount of goods would lead to
> > >inflation
>
> Ours is a fiat currency. Fiat "money" always inflates. Always has,
> always will. It's not based on anything real.

Well, that was my point. The currency isn't pegged to anything
"real" so I don't see how people can realistically worry about
deflation. Just create more of it by fiat and the re-inflation takes
care of itself.

> , or in this case, re-flation. What am I missing here?
> >
> > What would happen to the stock and bond markets' foreign investors.
>
> Foreign investors are bailing rite now. They're selling dollars and
> buying euros.

Exactly. We're exporting our deflation to Europe.

Shag
July 4th 03, 02:10 AM
"Edgar S." > wrote in message
om...
> Chris Hill > wrote in message
>...
> > On Tue, 01 Jul 2003 23:56:16 GMT, "Shag" > wrote:
> > >
> > >I've heard people say this, but it seems to me that the
> > >government can just "print money" to increase the money
> > >supply (that's not how they would do it, really, but
> > >functionally that's what it's equivalent to).
>
> the US gov doesn't print money. Money is printed by the Fed, which is
> a private bank based in Europe. The Fed then LENDS the printed bills
> to the US at face value. Americans don't OWN their own currency.

Huh? Could you speak more plainly, I'm not getting your drift.

> More money
> > >chasing the same amount of goods would lead to
> > >inflation
>
> Ours is a fiat currency. Fiat "money" always inflates. Always has,
> always will. It's not based on anything real.

Well, that was my point. The currency isn't pegged to anything
"real" so I don't see how people can realistically worry about
deflation. Just create more of it by fiat and the re-inflation takes
care of itself.

> , or in this case, re-flation. What am I missing here?
> >
> > What would happen to the stock and bond markets' foreign investors.
>
> Foreign investors are bailing rite now. They're selling dollars and
> buying euros.

Exactly. We're exporting our deflation to Europe.

SoCalMike
July 4th 03, 06:22 AM
"Duran" > wrote in message
...
> > I owned my first house for ten years almost to the day. When I sold,
> > it was for triple what I'd bought it for ten years before. The house,
> > in dollar terms, appreciated about 20% a year for those ten years.
>
> A price tripling over a ten year period equates to just over 11.5%
> compounded annually, not adjusted for inflation (approx. 9% - 9.5% once
> conservative inflation has been factored in). Is there something I am
> missing in your calculation of 20%?

my condo has appreciated 25% in the past 16 months. its all numbers- what
someones willing to pay, basically. but it enabled me to refinance for a
point less, and lose my PMI. ill be paying a little over $600/mo on a
2br/2ba place, with indoor laundry and garage.

>Also, the 11.5% figure does not include
> all the money you've spent on property taxes, house maintenance, and all
the
> other inflationary costs that are associated with home ownership.

the real killer for me is the interest, even tho its deductible. what i pay
in property tax is roughly equal to what ill be getting back with my fed
refund. YMMV.

either way, it still beats the hell out of renting.
>
> Please note I am not trying to disprove you as I believe - in my
situation -
> home ownership is much better than renting. There are a few situations
> renting may be better: if you are elderly or disabled and cannot easily
> tend to the home,

a condo would work nicely.

> if you are moving soon or move frequently, if you would

the above is true, youd likely eat most gains thru real estate commissions.

> rather have the maximum amount of free time available to you, if you
simply

outside this place, im bored. i have to resort to going to moms if i want a
painting, lawnmowing, or pool cleaning fix. thats what the homeowners
association fees pay for.

> just can't afford the added expenses of home ownership or can't qualify
for
> a mortgage.

with a condo, the added expenses, if any, are usually minimal. you just dont
have a landlord to call to unstop the sink.

SoCalMike
July 4th 03, 06:22 AM
"Duran" > wrote in message
...
> > I owned my first house for ten years almost to the day. When I sold,
> > it was for triple what I'd bought it for ten years before. The house,
> > in dollar terms, appreciated about 20% a year for those ten years.
>
> A price tripling over a ten year period equates to just over 11.5%
> compounded annually, not adjusted for inflation (approx. 9% - 9.5% once
> conservative inflation has been factored in). Is there something I am
> missing in your calculation of 20%?

my condo has appreciated 25% in the past 16 months. its all numbers- what
someones willing to pay, basically. but it enabled me to refinance for a
point less, and lose my PMI. ill be paying a little over $600/mo on a
2br/2ba place, with indoor laundry and garage.

>Also, the 11.5% figure does not include
> all the money you've spent on property taxes, house maintenance, and all
the
> other inflationary costs that are associated with home ownership.

the real killer for me is the interest, even tho its deductible. what i pay
in property tax is roughly equal to what ill be getting back with my fed
refund. YMMV.

either way, it still beats the hell out of renting.
>
> Please note I am not trying to disprove you as I believe - in my
situation -
> home ownership is much better than renting. There are a few situations
> renting may be better: if you are elderly or disabled and cannot easily
> tend to the home,

a condo would work nicely.

> if you are moving soon or move frequently, if you would

the above is true, youd likely eat most gains thru real estate commissions.

> rather have the maximum amount of free time available to you, if you
simply

outside this place, im bored. i have to resort to going to moms if i want a
painting, lawnmowing, or pool cleaning fix. thats what the homeowners
association fees pay for.

> just can't afford the added expenses of home ownership or can't qualify
for
> a mortgage.

with a condo, the added expenses, if any, are usually minimal. you just dont
have a landlord to call to unstop the sink.

lpogoda
July 4th 03, 05:45 PM
Duran wrote in message ...
>> I owned my first house for ten years almost to the day. When I sold,
>> it was for triple what I'd bought it for ten years before. The house,
>> in dollar terms, appreciated about 20% a year for those ten years.
>
>A price tripling over a ten year period equates to just over 11.5%
>compounded annually, not adjusted for inflation (approx. 9% - 9.5% once
>conservative inflation has been factored in). Is there something I am
>missing in your calculation of 20%?

My mistake - I miskeyed, and my 20% figure is, um, inflated. I will
endeavor to be more careful in the future.


>Also, the 11.5% figure does not include
>all the money you've spent on property taxes, house maintenance, and all
the
>other inflationary costs that are associated with home ownership.


When you rent, the landlord pays those costs, but s/he gets that money from
the renter. The renter pays for that stuff too, just not directly to the
taxing authority or contractor. So I tend to consider that stuff as the
"rent" I paid to the landlord (me) to live there.

The first year I was in my first house, my mortgage payment (principal,
interest, real estate taxes, and PMI) was about $150/month more than the
last month's rent I had paid on my last apartment. My income tax savings
were about $1,680. So my net addtional after tax cost was (150 x 12) - 1680
= $120, or about $10/month. That doesn't take into consideration the annual
rent increase we would have been hit with that year had we continued to
rent. We still knew people who continued to live in the old apartment
building, and the second year after we moved, there was a rent increase, and
now my monthly payment was about equal to my mortgage payment. The third
year, the rent increased again, and my mortgage payment was now less than I
would have paid in rent if I had stayed in that apartment. At that point,
the people we knew in the building moved away, but I'm pretty confident that
the rent continued to go up each year, while my mortgage payment stayed
pretty much the same.

Maintenance could be an issue I suppose, but I bought the house new and
maintenance over the ten years came to a new dishwasher, a new hot water
heater, and a new heating element for the kitchen range. There were things
like service calls for the HVAC, a couple times for a plumber. I have no
idea what those came to. We did do improvements - stuff like paint,
wallpaper, curtains, shades - that stayed with the house. Again, I have no
idea now what that stuff cost. But if it came to $1,000/year I'd be
flabbergasted.

Basically, my take on it is that whether I bought a house or rented an
apartment, I would have had to pay approximately the same amount each month
to someone, so from a personal finanaces perspective, it was pretty much a
wash. From a dollar perspective, I came out a little ahead - my payout over
the ten years was less in the house than it would have been had I stayed in
the apartment.

With one big exception. When we moved, I sold the house. After everyone
had been paid off - the mortgage satisfied, the home equity loan account
closed, the broker's comission paid, all of it, I got a check. I'm sure
it's coincidental, but the check was for a little more than I had paid for
down payment, principal, interest, taxes, and PMI for those ten years. In
other words, in dollar terms, I got it all back. In purchasing power terms,
I didn't of course, because those dollars were inflated compared to the one
I had paid out 10 years before. But if I had moved after 10 years of
renting, I would have received nothing.

>Please note I am not trying to disprove you as I believe - in my
situation -
>home ownership is much better than renting. There are a few situations
>renting may be better: if you are elderly or disabled and cannot easily
>tend to the home, if you are moving soon or move frequently, if you would
>rather have the maximum amount of free time available to you, if you simply
>just can't afford the added expenses of home ownership or can't qualify for
>a mortgage.

lpogoda
July 4th 03, 05:45 PM
Duran wrote in message ...
>> I owned my first house for ten years almost to the day. When I sold,
>> it was for triple what I'd bought it for ten years before. The house,
>> in dollar terms, appreciated about 20% a year for those ten years.
>
>A price tripling over a ten year period equates to just over 11.5%
>compounded annually, not adjusted for inflation (approx. 9% - 9.5% once
>conservative inflation has been factored in). Is there something I am
>missing in your calculation of 20%?

My mistake - I miskeyed, and my 20% figure is, um, inflated. I will
endeavor to be more careful in the future.


>Also, the 11.5% figure does not include
>all the money you've spent on property taxes, house maintenance, and all
the
>other inflationary costs that are associated with home ownership.


When you rent, the landlord pays those costs, but s/he gets that money from
the renter. The renter pays for that stuff too, just not directly to the
taxing authority or contractor. So I tend to consider that stuff as the
"rent" I paid to the landlord (me) to live there.

The first year I was in my first house, my mortgage payment (principal,
interest, real estate taxes, and PMI) was about $150/month more than the
last month's rent I had paid on my last apartment. My income tax savings
were about $1,680. So my net addtional after tax cost was (150 x 12) - 1680
= $120, or about $10/month. That doesn't take into consideration the annual
rent increase we would have been hit with that year had we continued to
rent. We still knew people who continued to live in the old apartment
building, and the second year after we moved, there was a rent increase, and
now my monthly payment was about equal to my mortgage payment. The third
year, the rent increased again, and my mortgage payment was now less than I
would have paid in rent if I had stayed in that apartment. At that point,
the people we knew in the building moved away, but I'm pretty confident that
the rent continued to go up each year, while my mortgage payment stayed
pretty much the same.

Maintenance could be an issue I suppose, but I bought the house new and
maintenance over the ten years came to a new dishwasher, a new hot water
heater, and a new heating element for the kitchen range. There were things
like service calls for the HVAC, a couple times for a plumber. I have no
idea what those came to. We did do improvements - stuff like paint,
wallpaper, curtains, shades - that stayed with the house. Again, I have no
idea now what that stuff cost. But if it came to $1,000/year I'd be
flabbergasted.

Basically, my take on it is that whether I bought a house or rented an
apartment, I would have had to pay approximately the same amount each month
to someone, so from a personal finanaces perspective, it was pretty much a
wash. From a dollar perspective, I came out a little ahead - my payout over
the ten years was less in the house than it would have been had I stayed in
the apartment.

With one big exception. When we moved, I sold the house. After everyone
had been paid off - the mortgage satisfied, the home equity loan account
closed, the broker's comission paid, all of it, I got a check. I'm sure
it's coincidental, but the check was for a little more than I had paid for
down payment, principal, interest, taxes, and PMI for those ten years. In
other words, in dollar terms, I got it all back. In purchasing power terms,
I didn't of course, because those dollars were inflated compared to the one
I had paid out 10 years before. But if I had moved after 10 years of
renting, I would have received nothing.

>Please note I am not trying to disprove you as I believe - in my
situation -
>home ownership is much better than renting. There are a few situations
>renting may be better: if you are elderly or disabled and cannot easily
>tend to the home, if you are moving soon or move frequently, if you would
>rather have the maximum amount of free time available to you, if you simply
>just can't afford the added expenses of home ownership or can't qualify for
>a mortgage.

Edgar S.
July 4th 03, 07:58 PM
"Shag" > wrote in message >...

> Well, that was my point. The currency isn't pegged to anything
> "real" so I don't see how people can realistically worry about
> deflation. Just create more of it by fiat and the re-inflation takes
> care of itself.

The Fed can PRINT it up. The Gov can borrow it. However: jobs are
either leaving the US, or disappearing entirely. It doesn't MATTER the
the Gov has X number of printed dollars.

Without jobs to do, no one can earn any of it.


> > Foreign investors are bailing rite now. They're selling dollars and
> > buying euros.
>
> Exactly. We're exporting our deflation to Europe.

Actually, the EU is based on the Federal model. Plus they're also
owned by the same ppl who own the Fed.

the EU is in the same position as the Federal gov of the US... just in
a younger state.

Edgar S.
July 4th 03, 07:58 PM
"Shag" > wrote in message >...

> Well, that was my point. The currency isn't pegged to anything
> "real" so I don't see how people can realistically worry about
> deflation. Just create more of it by fiat and the re-inflation takes
> care of itself.

The Fed can PRINT it up. The Gov can borrow it. However: jobs are
either leaving the US, or disappearing entirely. It doesn't MATTER the
the Gov has X number of printed dollars.

Without jobs to do, no one can earn any of it.


> > Foreign investors are bailing rite now. They're selling dollars and
> > buying euros.
>
> Exactly. We're exporting our deflation to Europe.

Actually, the EU is based on the Federal model. Plus they're also
owned by the same ppl who own the Fed.

the EU is in the same position as the Federal gov of the US... just in
a younger state.

July 4th 03, 07:58 PM
In article >,
"lpogoda" > wrote:

> That's just plain crap.

Geez, why don't you tell us what you really think.

> Back when OPEC first started jacking up prices (before you were
> born, apparently) back in the 1970's, it was a enormous economic
> shock to the entire world.

Right. As a matter of fact, the inflation resulting from these events
(because there were 2 embargoes, remember? Or is it all just too
foggy?) was Ronnie Raygun's ticket into the whitehouse. It was easy to
blame Carter for events caused by Republican policies toward
oil-producing nations.

> A lot of countries, including the US, attempted to pay the
> quadrupled prices by inflating the currency.

Ayup, that's the whole point. A lot of countries were in the same boat
as the US, and the US, as the biggest importer of oil, was held the
position as the primary defender of world interests. Then. This is now,
so try to keep up, okay? This nation no longer holds that position;
it's changed to aggressor status thanks to your boy and his "avenge
daddy" trip. Tough if it offends you; nobody but you cares about your
umbrage.

> There was a lot of "urgency" for a while about pricing oil
> according to a "market basket" of currencies. It never happened.
> Whether it will this time or not is impossible to say.

Now, there is fear involved, and you know what they say about market
drivers: last time greed prevented it. Now, it's fear driving the move.
And AFAICT, it would be an entirely logical move to ameliorate that fear.

July 4th 03, 07:58 PM
In article >,
"lpogoda" > wrote:

> That's just plain crap.

Geez, why don't you tell us what you really think.

> Back when OPEC first started jacking up prices (before you were
> born, apparently) back in the 1970's, it was a enormous economic
> shock to the entire world.

Right. As a matter of fact, the inflation resulting from these events
(because there were 2 embargoes, remember? Or is it all just too
foggy?) was Ronnie Raygun's ticket into the whitehouse. It was easy to
blame Carter for events caused by Republican policies toward
oil-producing nations.

> A lot of countries, including the US, attempted to pay the
> quadrupled prices by inflating the currency.

Ayup, that's the whole point. A lot of countries were in the same boat
as the US, and the US, as the biggest importer of oil, was held the
position as the primary defender of world interests. Then. This is now,
so try to keep up, okay? This nation no longer holds that position;
it's changed to aggressor status thanks to your boy and his "avenge
daddy" trip. Tough if it offends you; nobody but you cares about your
umbrage.

> There was a lot of "urgency" for a while about pricing oil
> according to a "market basket" of currencies. It never happened.
> Whether it will this time or not is impossible to say.

Now, there is fear involved, and you know what they say about market
drivers: last time greed prevented it. Now, it's fear driving the move.
And AFAICT, it would be an entirely logical move to ameliorate that fear.

lpogoda
July 4th 03, 10:45 PM
wrote in message ...
>In article >,
> "lpogoda" > wrote:
>
> > That's just plain crap.
>
>Geez, why don't you tell us what you really think.
>
> > Back when OPEC first started jacking up prices (before you were
> > born, apparently) back in the 1970's, it was a enormous economic
> > shock to the entire world.
>
>Right. As a matter of fact, the inflation resulting from these events
>(because there were 2 embargoes, remember? Or is it all just too
>foggy?) was Ronnie Raygun's ticket into the whitehouse. It was easy to
>blame Carter for events caused by Republican policies toward
>oil-producing nations.

Let's see, the inflation and sky-high interest rates during the Carter
presidency were the result of the policies of the previous administration?
I guess that means that the present sluggish economy is the result of the
policies of the previous administration as well. What's that, the previous
administration was from the Democratic party and so couldn't be to blame? I
didn't realize that.


> > A lot of countries, including the US, attempted to pay the
> > quadrupled prices by inflating the currency.
>
>Ayup, that's the whole point. A lot of countries were in the same boat
>as the US, and the US, as the biggest importer of oil, was held the
>position as the primary defender of world interests. Then. This is now,
>so try to keep up, okay? This nation no longer holds that position;
>it's changed to aggressor status thanks to your boy and his "avenge
>daddy" trip. Tough if it offends you; nobody but you cares about your
>umbrage.


What, the US is no longer the biggest importer of oil? I'm not talking
politics here, and I don't have a "boy". I'm talking history, and my
"umbrage" is at how some people don't know any of it.

lpogoda
July 4th 03, 10:45 PM
wrote in message ...
>In article >,
> "lpogoda" > wrote:
>
> > That's just plain crap.
>
>Geez, why don't you tell us what you really think.
>
> > Back when OPEC first started jacking up prices (before you were
> > born, apparently) back in the 1970's, it was a enormous economic
> > shock to the entire world.
>
>Right. As a matter of fact, the inflation resulting from these events
>(because there were 2 embargoes, remember? Or is it all just too
>foggy?) was Ronnie Raygun's ticket into the whitehouse. It was easy to
>blame Carter for events caused by Republican policies toward
>oil-producing nations.

Let's see, the inflation and sky-high interest rates during the Carter
presidency were the result of the policies of the previous administration?
I guess that means that the present sluggish economy is the result of the
policies of the previous administration as well. What's that, the previous
administration was from the Democratic party and so couldn't be to blame? I
didn't realize that.


> > A lot of countries, including the US, attempted to pay the
> > quadrupled prices by inflating the currency.
>
>Ayup, that's the whole point. A lot of countries were in the same boat
>as the US, and the US, as the biggest importer of oil, was held the
>position as the primary defender of world interests. Then. This is now,
>so try to keep up, okay? This nation no longer holds that position;
>it's changed to aggressor status thanks to your boy and his "avenge
>daddy" trip. Tough if it offends you; nobody but you cares about your
>umbrage.


What, the US is no longer the biggest importer of oil? I'm not talking
politics here, and I don't have a "boy". I'm talking history, and my
"umbrage" is at how some people don't know any of it.

July 4th 03, 11:07 PM
In article >,
"lpogoda" > wrote:

> I'm talking history, and my "umbrage" is at how some people don't
> know any of it.

Talking? "Spinning away" is more like it. HTH.

July 4th 03, 11:07 PM
In article >,
"lpogoda" > wrote:

> I'm talking history, and my "umbrage" is at how some people don't
> know any of it.

Talking? "Spinning away" is more like it. HTH.

July 4th 03, 11:22 PM
In article >,
"lpogoda" > wrote:

> Let's see, the inflation and sky-high interest rates during the
> Carter presidency were the result of the policies of the previous
> administration?

You don't read very well, do you? Perhaps you're at an age where you
should try new glasses. I said the oil embargoes were the cause of the
inflationary trend (and I believe you already know that) during
Carter's administration, and that those embargoes were the direct
result of Republican (Nixon, Ford) policies toward oil-producing
nations.

Maybe pictures would help your comprehension?

Denial. Not just a river in Egypt. Maybe you're just really afraid that
you are wrong, and maybe, just maybe, you are one of those who has
something really substantial to lose if what I say is true.

> What, the US is no longer the biggest importer of oil?

Yep, you've got it bad, alright; that factor is *not* an advantage this
time around, gabe.

> I'm not talking politics here, and I don't have a "boy".

Heh. Too easy.

> I'm talking history, and my "umbrage" is at how some people don't
> know any of it.

So, read up.

July 4th 03, 11:22 PM
In article >,
"lpogoda" > wrote:

> Let's see, the inflation and sky-high interest rates during the
> Carter presidency were the result of the policies of the previous
> administration?

You don't read very well, do you? Perhaps you're at an age where you
should try new glasses. I said the oil embargoes were the cause of the
inflationary trend (and I believe you already know that) during
Carter's administration, and that those embargoes were the direct
result of Republican (Nixon, Ford) policies toward oil-producing
nations.

Maybe pictures would help your comprehension?

Denial. Not just a river in Egypt. Maybe you're just really afraid that
you are wrong, and maybe, just maybe, you are one of those who has
something really substantial to lose if what I say is true.

> What, the US is no longer the biggest importer of oil?

Yep, you've got it bad, alright; that factor is *not* an advantage this
time around, gabe.

> I'm not talking politics here, and I don't have a "boy".

Heh. Too easy.

> I'm talking history, and my "umbrage" is at how some people don't
> know any of it.

So, read up.

Edgar S.
July 5th 03, 06:02 PM
"Duran" > wrote in message >...
> > Foreign investors are bailing rite now. They're selling dollars and
> > buying euros.
>
> Yeah, and in a few years they will all be going "oops".


Well, geeze. EVENTUALLY. Why? Because the EU is based on the Federal
model. The Euro is also mostly a fiat currency.

Edgar S.
July 5th 03, 06:02 PM
"Duran" > wrote in message >...
> > Foreign investors are bailing rite now. They're selling dollars and
> > buying euros.
>
> Yeah, and in a few years they will all be going "oops".


Well, geeze. EVENTUALLY. Why? Because the EU is based on the Federal
model. The Euro is also mostly a fiat currency.

Duran
July 5th 03, 06:15 PM
> Well, I would tell you, but I didn't write the line you attributed to
> me. Request that you watch out for those attributions. The only text in
> this message that I wrote was the paragraph beginning with "Moreover".

I don't know why you are informing me of this. On my news server, my post
is very clearly a reply to Edgar S. Also, in my reply, it is very clear I
am not responding to YOUR text that starts with "Moreover", but the text
below that. Your text has 2 ">>" marks, the text I replied to has only 1
">" mark indicating it is the last text that I am responding to.

Duran
July 5th 03, 06:15 PM
> Well, I would tell you, but I didn't write the line you attributed to
> me. Request that you watch out for those attributions. The only text in
> this message that I wrote was the paragraph beginning with "Moreover".

I don't know why you are informing me of this. On my news server, my post
is very clearly a reply to Edgar S. Also, in my reply, it is very clear I
am not responding to YOUR text that starts with "Moreover", but the text
below that. Your text has 2 ">>" marks, the text I replied to has only 1
">" mark indicating it is the last text that I am responding to.

Duran
July 5th 03, 11:04 PM
<Old_Timer> wrote in message
...
> On Tue, 01 Jul 2003 20:02:45 GMT, Chris Hill
> > wrote:
>
> >On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
> >
> >>I've seen deflation in tires . . .
> >
> >
> >It seems to me that the deflation is happening, but not in goods such
> >as food and energy that you buy every day, or in services which you
> >also use frequently. Things that I have noticed decreasing in price
> >include computer stuff (as usual) and perhaps some building materials.
> >I've been looking to replace a patio door for over a year, The door I
> >wanted was going to cost $800 last year, I think I spent around $700
> >last month and bought some things I'd need to put it in while I was
> >buying. As far as I could tell, it was the same door. I also got a
> >bargain on a cordless drill. It doesn't have any fancy features, but
> >it is pretty powerful and cost something like $30.
>
> Is the drill marked "Made in China"?

Some interesting things will be happening with China in the near future.
The MAIN reason the US has such a drastic trade deficit with China is that
China's currency (the yuan) is pegged to the dollar (at 8.2 to the dollar I
believe?). This is also the reason other countries invest in China as well.
China's currency can't appreciate / depreciate based on it's own economic
environment. China's currency would appreciate wildly if it were let loose
on the free market today. China also heavily subsidizes all export
industries.

The reason I say things will get interesting is that heavy export subsidies,
and currency manipulation (I believe what China is doing falls into this
category) are both violations of WTO requirements - which China either has
joined already, or is joining very soon.

Duran
July 5th 03, 11:04 PM
<Old_Timer> wrote in message
...
> On Tue, 01 Jul 2003 20:02:45 GMT, Chris Hill
> > wrote:
>
> >On Tue, 01 Jul 2003 18:50:52 GMT, > wrote:
> >
> >>I've seen deflation in tires . . .
> >
> >
> >It seems to me that the deflation is happening, but not in goods such
> >as food and energy that you buy every day, or in services which you
> >also use frequently. Things that I have noticed decreasing in price
> >include computer stuff (as usual) and perhaps some building materials.
> >I've been looking to replace a patio door for over a year, The door I
> >wanted was going to cost $800 last year, I think I spent around $700
> >last month and bought some things I'd need to put it in while I was
> >buying. As far as I could tell, it was the same door. I also got a
> >bargain on a cordless drill. It doesn't have any fancy features, but
> >it is pretty powerful and cost something like $30.
>
> Is the drill marked "Made in China"?

Some interesting things will be happening with China in the near future.
The MAIN reason the US has such a drastic trade deficit with China is that
China's currency (the yuan) is pegged to the dollar (at 8.2 to the dollar I
believe?). This is also the reason other countries invest in China as well.
China's currency can't appreciate / depreciate based on it's own economic
environment. China's currency would appreciate wildly if it were let loose
on the free market today. China also heavily subsidizes all export
industries.

The reason I say things will get interesting is that heavy export subsidies,
and currency manipulation (I believe what China is doing falls into this
category) are both violations of WTO requirements - which China either has
joined already, or is joining very soon.

Edgar S.
July 6th 03, 12:51 AM
"Duran" > wrote in message >...
> > It's not just me saying it. It's how things are. The dollar bears the
> > biggest debt load any currency ever had. Ever in history.
> > The dollar has a huge downside and no upside. The Euro on the other
> > hand has a lot of up side and little downside yet.
>
> Debt isn't the only factor in determining a currencies value.

Nor did I suggest it was. The ONLY factor determining the "value" of
any fiat currency is how much ppl believe in it. Know what? There
are ppl who believe in Santa Claus, and Obiwan Kenobi. The dollar has
"value" 'cause enuf ppl say it has "value".

> The US
> certainly does not have the biggest debt load in terms of % of GDP. The US
> is the largest economy (in terms of GDP)

Irrelevant.


> and can handle more debt than would
> seem normal.

there's a las Vegas magician who can make a horse disappear.

> Of course this is the biggest debt in history, this is also
> the largest GDP ever recorded in history as well.

It could be...but as all figure released by the Federal gov are
bogus...who is to say for sure... but again.. irrelevant to the
question.

> Holding Euro's long-term is - in my opinion - risky.

U mean compared to the dollar? How stable did u think the dollar was
rite now?



> The Euro is new and
> unproven.

But the Euro is partially backed by gold. The dollar is not.


I think a lot of hype is factored into the price.

HELLO? ALL value in fiat currency is hype. There isn't anything else
but a 2 cent slip of paper.

Edgar S.
July 6th 03, 12:51 AM
"Duran" > wrote in message >...
> > It's not just me saying it. It's how things are. The dollar bears the
> > biggest debt load any currency ever had. Ever in history.
> > The dollar has a huge downside and no upside. The Euro on the other
> > hand has a lot of up side and little downside yet.
>
> Debt isn't the only factor in determining a currencies value.

Nor did I suggest it was. The ONLY factor determining the "value" of
any fiat currency is how much ppl believe in it. Know what? There
are ppl who believe in Santa Claus, and Obiwan Kenobi. The dollar has
"value" 'cause enuf ppl say it has "value".

> The US
> certainly does not have the biggest debt load in terms of % of GDP. The US
> is the largest economy (in terms of GDP)

Irrelevant.


> and can handle more debt than would
> seem normal.

there's a las Vegas magician who can make a horse disappear.

> Of course this is the biggest debt in history, this is also
> the largest GDP ever recorded in history as well.

It could be...but as all figure released by the Federal gov are
bogus...who is to say for sure... but again.. irrelevant to the
question.

> Holding Euro's long-term is - in my opinion - risky.

U mean compared to the dollar? How stable did u think the dollar was
rite now?



> The Euro is new and
> unproven.

But the Euro is partially backed by gold. The dollar is not.


I think a lot of hype is factored into the price.

HELLO? ALL value in fiat currency is hype. There isn't anything else
but a 2 cent slip of paper.

Duran
July 6th 03, 01:35 AM
> > and can handle more debt than would
> > seem normal.
>
> there's a las Vegas magician who can make a horse disappear.

The statement above was merely to put the amount of debt into perspective.

> > Of course this is the biggest debt in history, this is also
> > the largest GDP ever recorded in history as well.
>
> It could be...but as all figure released by the Federal gov are
> bogus...who is to say for sure... but again.. irrelevant to the
> question.
>
> > Holding Euro's long-term is - in my opinion - risky.
>
> U mean compared to the dollar? How stable did u think the dollar was
> rite now?

Stable in terms of what? International speculative floating currency
markets? Domestic monetary policy? Foreign government opinion in terms of
valuation?

> > The Euro is new and
> > unproven.

> But the Euro is partially backed by gold. The dollar is not.

Take your Euro's to the ECB and demand your gold. You may be in for a shock
if this is what you are expecting. The Euro is no more "Backed by gold"
than the US dollar (or any other fiat currency for that matter). The US
government holds gold as well. There is a world of difference between
backing your currency by gold and holding gold reserves.

> I think a lot of hype is factored into the price.
>
> HELLO? ALL value in fiat currency is hype. There isn't anything else
> but a 2 cent slip of paper.

So you don't own any overpriced fiat currency then right? Yes, currency is
only as valuable as people make it out to be. This is why stability in the
currencies domestic environment is vitally important, even the EU. IE, the
government can literally ruin the credibility of a currency in mere minutes
if it so chooses. Yes, fiat currency is nothing more than a cheap printed
piece of paper, but it is used for transactions and has been declared legal
tender; this is true for the Dollar, the Yen, and the Euro. Selling dollars
(or yen, or whatever) for Euro's exchanges one piece of legal tender paper
for a another.

Duran
July 6th 03, 01:35 AM
> > and can handle more debt than would
> > seem normal.
>
> there's a las Vegas magician who can make a horse disappear.

The statement above was merely to put the amount of debt into perspective.

> > Of course this is the biggest debt in history, this is also
> > the largest GDP ever recorded in history as well.
>
> It could be...but as all figure released by the Federal gov are
> bogus...who is to say for sure... but again.. irrelevant to the
> question.
>
> > Holding Euro's long-term is - in my opinion - risky.
>
> U mean compared to the dollar? How stable did u think the dollar was
> rite now?

Stable in terms of what? International speculative floating currency
markets? Domestic monetary policy? Foreign government opinion in terms of
valuation?

> > The Euro is new and
> > unproven.

> But the Euro is partially backed by gold. The dollar is not.

Take your Euro's to the ECB and demand your gold. You may be in for a shock
if this is what you are expecting. The Euro is no more "Backed by gold"
than the US dollar (or any other fiat currency for that matter). The US
government holds gold as well. There is a world of difference between
backing your currency by gold and holding gold reserves.

> I think a lot of hype is factored into the price.
>
> HELLO? ALL value in fiat currency is hype. There isn't anything else
> but a 2 cent slip of paper.

So you don't own any overpriced fiat currency then right? Yes, currency is
only as valuable as people make it out to be. This is why stability in the
currencies domestic environment is vitally important, even the EU. IE, the
government can literally ruin the credibility of a currency in mere minutes
if it so chooses. Yes, fiat currency is nothing more than a cheap printed
piece of paper, but it is used for transactions and has been declared legal
tender; this is true for the Dollar, the Yen, and the Euro. Selling dollars
(or yen, or whatever) for Euro's exchanges one piece of legal tender paper
for a another.

July 6th 03, 03:51 AM
In article >,
"Duran" > wrote:

> I don't know why you are informing me of this.

Sorry--the first line attribution was to me (although it was quoted, the
line broke on my reader). I didn't expand the thread to see what article
preceded yours, only went by the first line attribution.

July 6th 03, 03:51 AM
In article >,
"Duran" > wrote:

> I don't know why you are informing me of this.

Sorry--the first line attribution was to me (although it was quoted, the
line broke on my reader). I didn't expand the thread to see what article
preceded yours, only went by the first line attribution.

lpogoda
July 6th 03, 02:58 PM
Edgar S. wrote in message
>...
>
>Nor did I suggest it was. The ONLY factor determining the "value" of
>any fiat currency is how much ppl believe in it.

The only factor determining the value of anything is what people think about
it.

lpogoda
July 6th 03, 02:58 PM
Edgar S. wrote in message
>...
>
>Nor did I suggest it was. The ONLY factor determining the "value" of
>any fiat currency is how much ppl believe in it.

The only factor determining the value of anything is what people think about
it.

Duran
July 7th 03, 08:27 PM
"Lecher9000" > wrote in message
...
> >I suppose I'll not really enjoy a deflationary period, based on what my
> >older family members told me about it, but...the thought of economists
> >"in a blind pig panic" is extremely satisfying.
>
> I'd find it satisfying to see some CEO's, who outsourced IT to India, in a
> "blind pig" panic inside a 2 man jail cell with a macho gay.

Why is it unethical to outsource work to India? What percentage of the
cheap products YOU purchase are made in the USA (or your country) and NOT
produced in cheap sweatshop labor markets such as India / China / etc. It's
ok for you to take jobs away from Americans (or citizens of your country) by
purchasing cheap goods made in India / China, but you cry fowl when big
business does the exact same thing because now YOU are out of a job? Get
real.

I don't know much about India's currency, but I'm guessing it is not
free-floating - meaning its price is not set by supply and demand in the
open market. This is what causes businesses and individuals to continually
be able to purchase cheap goods or labor (I am 100% certain China has a
fixed-rate peg to the US dollar...China's currency can't appreciate based on
its own explosive economic success). If India had a floating exchange rate
(which I'm willing to bet it does not), its currency would appreciate based
on all the Indians trying to convert their US dollars (or Euro's, or Yen, or
currency from any other country that employs cheap labor) to the Indian
currency. This appreciation would eventually make it so that it wouldn't be
near as profitiable to outsource to that country - and as more and more
companies invest in India, eventually it would get to a point where they
would LOSE money, then the currency will start depreciating until it
eventually settles at a rate that makes trading relatively equal....ah the
free markets.

This is the solution to the jobs of first world nations (this is by no means
just a US problem) being sucked away to India and China. This would stop
American job flight as a result of Americans who purchase cheap goods
produced in sweatshop labor countries, and it would hamper the big business
capital flight of cheap labor. If the IMF, World Bank, WTO, or some
organization like that eventually see's the light, they will force those
countries to comply for equitable trading.

Duran
July 7th 03, 08:27 PM
"Lecher9000" > wrote in message
...
> >I suppose I'll not really enjoy a deflationary period, based on what my
> >older family members told me about it, but...the thought of economists
> >"in a blind pig panic" is extremely satisfying.
>
> I'd find it satisfying to see some CEO's, who outsourced IT to India, in a
> "blind pig" panic inside a 2 man jail cell with a macho gay.

Why is it unethical to outsource work to India? What percentage of the
cheap products YOU purchase are made in the USA (or your country) and NOT
produced in cheap sweatshop labor markets such as India / China / etc. It's
ok for you to take jobs away from Americans (or citizens of your country) by
purchasing cheap goods made in India / China, but you cry fowl when big
business does the exact same thing because now YOU are out of a job? Get
real.

I don't know much about India's currency, but I'm guessing it is not
free-floating - meaning its price is not set by supply and demand in the
open market. This is what causes businesses and individuals to continually
be able to purchase cheap goods or labor (I am 100% certain China has a
fixed-rate peg to the US dollar...China's currency can't appreciate based on
its own explosive economic success). If India had a floating exchange rate
(which I'm willing to bet it does not), its currency would appreciate based
on all the Indians trying to convert their US dollars (or Euro's, or Yen, or
currency from any other country that employs cheap labor) to the Indian
currency. This appreciation would eventually make it so that it wouldn't be
near as profitiable to outsource to that country - and as more and more
companies invest in India, eventually it would get to a point where they
would LOSE money, then the currency will start depreciating until it
eventually settles at a rate that makes trading relatively equal....ah the
free markets.

This is the solution to the jobs of first world nations (this is by no means
just a US problem) being sucked away to India and China. This would stop
American job flight as a result of Americans who purchase cheap goods
produced in sweatshop labor countries, and it would hamper the big business
capital flight of cheap labor. If the IMF, World Bank, WTO, or some
organization like that eventually see's the light, they will force those
countries to comply for equitable trading.

baron48
July 8th 03, 12:14 AM
wrote in message >...

> Altering petrocurrency would be one
> means of diminishing the military threat suddenly presented by the
> United States under the Bush regime.

The US military edge will not go away for decades regardless of
economic actions. Changing the currency for oil transactions is no
simple matter and will hurt many countries besides the US. The Euro
is the first currency that has anything close to the US dollar's
backing so that is why the issue is even being discussed.

-Tom

baron48
July 8th 03, 12:14 AM
wrote in message >...

> Altering petrocurrency would be one
> means of diminishing the military threat suddenly presented by the
> United States under the Bush regime.

The US military edge will not go away for decades regardless of
economic actions. Changing the currency for oil transactions is no
simple matter and will hurt many countries besides the US. The Euro
is the first currency that has anything close to the US dollar's
backing so that is why the issue is even being discussed.

-Tom

Duran
July 9th 03, 02:33 AM
> > I don't know much about India's currency -snip yada yada, Indian
currency- snip
>
> >Indians trying to convert their US dollars (or Euro's, or Yen, or
> > currency from any other country that employs cheap labor) to the Indian
> > currency. This appreciation would eventually make it so that it
wouldn't be
> > near as profitiable to outsource to that country
>
> NOPE. Outsourcing is good for US businesses because they are
> eliminating their HIGHEST bill: Taxation!

That may be true, but they can outsource too American citizens just as
easily (actually, for obvious reasons, easier) as they can outsource to
Indian citizens. The reason they choose Indian over American? The cheap
labor. The total costs to outsource work to an Indian citizen are much
cheaper than the total costs to outsource to an American for an American
based company. This American company has to convert US dollars to the
Indian currency to pay the Indians. In a free-floating currency market,
this demand for the Indian currency would cause it to rise...these companies
would then either find another cheap labor market with a cheap currency OR
they would employ Americans.

There are only 2 reasons the Indian tech industry has taken off. The first
is that India has a fairly well developed infrastructure and a large number
of educated people in the industry. The second reason is that wages are low
AND the currency is cheap.

> As far as consumer goods go, it's cheaper to pack raw materials all up
> in ships and send it around the world 2-3 times that it is to do the
> work domestically. ALL due to hi taxation in the US.

Your last statement "ALL due to hi taxation in the US" is incorrect. It is
mostly due to the cheap labor. Again, if we compare the total costs to pay
an American to manufacture something and ship within our own borders (the
US) to the total costs to pay an Indian or Chinese to manufacture and ship
it across the ocean AND within our borders once it gets here, it is much
cheaper to go with the Indians / Chinese. China has a fixed rate currency
peg to the dollar...so this means the only way America will ever gain lost
employment back from the Chinese is if Chinese wages rise dramatically
and/or the Chinese currency is allowed to appreciate as it should be. Wages
are actually irrelevant. Currency exchange rates are.

Duran
July 9th 03, 02:33 AM
> > I don't know much about India's currency -snip yada yada, Indian
currency- snip
>
> >Indians trying to convert their US dollars (or Euro's, or Yen, or
> > currency from any other country that employs cheap labor) to the Indian
> > currency. This appreciation would eventually make it so that it
wouldn't be
> > near as profitiable to outsource to that country
>
> NOPE. Outsourcing is good for US businesses because they are
> eliminating their HIGHEST bill: Taxation!

That may be true, but they can outsource too American citizens just as
easily (actually, for obvious reasons, easier) as they can outsource to
Indian citizens. The reason they choose Indian over American? The cheap
labor. The total costs to outsource work to an Indian citizen are much
cheaper than the total costs to outsource to an American for an American
based company. This American company has to convert US dollars to the
Indian currency to pay the Indians. In a free-floating currency market,
this demand for the Indian currency would cause it to rise...these companies
would then either find another cheap labor market with a cheap currency OR
they would employ Americans.

There are only 2 reasons the Indian tech industry has taken off. The first
is that India has a fairly well developed infrastructure and a large number
of educated people in the industry. The second reason is that wages are low
AND the currency is cheap.

> As far as consumer goods go, it's cheaper to pack raw materials all up
> in ships and send it around the world 2-3 times that it is to do the
> work domestically. ALL due to hi taxation in the US.

Your last statement "ALL due to hi taxation in the US" is incorrect. It is
mostly due to the cheap labor. Again, if we compare the total costs to pay
an American to manufacture something and ship within our own borders (the
US) to the total costs to pay an Indian or Chinese to manufacture and ship
it across the ocean AND within our borders once it gets here, it is much
cheaper to go with the Indians / Chinese. China has a fixed rate currency
peg to the dollar...so this means the only way America will ever gain lost
employment back from the Chinese is if Chinese wages rise dramatically
and/or the Chinese currency is allowed to appreciate as it should be. Wages
are actually irrelevant. Currency exchange rates are.

trent
July 10th 03, 03:12 PM
Edgar S. wrote:
>
> trent > wrote in message >...
> > Duran wrote:
> >
> > > Deflation is capitalism's worst nightmare...read my other posts. It would
> > > bring the American economy to it's knees. Japan is on the brink of
> > > financial collapse after nearly a decade of sustained deflation.
> >
> >
> > Actually, Japan is recently on the rebound...
>
> the ONLY way Japan could be on a "rebound" is if the US is bailing
> them out. Japan has a LOT invested in stocks and other financial
> instuments in the US.
>
> If they sell them to try to recover some of the value, they're going
> to wreck the US in the process.


Yawn. Do your homework.

trent
--
I read it on the Internet, therefore it must be true.
:wq

trent
July 10th 03, 03:12 PM
Edgar S. wrote:
>
> trent > wrote in message >...
> > Duran wrote:
> >
> > > Deflation is capitalism's worst nightmare...read my other posts. It would
> > > bring the American economy to it's knees. Japan is on the brink of
> > > financial collapse after nearly a decade of sustained deflation.
> >
> >
> > Actually, Japan is recently on the rebound...
>
> the ONLY way Japan could be on a "rebound" is if the US is bailing
> them out. Japan has a LOT invested in stocks and other financial
> instuments in the US.
>
> If they sell them to try to recover some of the value, they're going
> to wreck the US in the process.


Yawn. Do your homework.

trent
--
I read it on the Internet, therefore it must be true.
:wq

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