30 replies to this topic

[dasein]

as observed before - in the 60s we were worried that no one would have to work a full time job because technology was increasing productivity so much and the thoughts were on finding leisure activities to fill the middle class life- but it ended up that the middle class did not get salary benefits from the procductivity but they made computer games to fill the time of the unemployed - this evisceration started long ago - probably as soon as slavery was eliminated they started looking for another way to enslave the population.

[Rogerdodger]

Well at least I already caught 3 Pokemon this morning, and the newest phones are coming out soon!

[gm_general]

Where in the world does this idea come from that RAISING interest rates if BEARISH? You lower interest rates to stimulate the economy when it is faltering. What is the opposite? This is a quote from a Reuters article that summarized the Fed meeting.

 

A solid U.S. labor market "has strengthened" the case for the first rate increase since last December, Fed Chair Janet Yellen told a central banking conference in Jackson Hole, Wyoming. Several of her colleagues said the increase could come as soon as next month if the economy does well.

Further rate hikes are expected to be few and far between as the U.S. central bank tries to balance a desire to fuel growth against worries it could overheat the economy.

 

 

http://www.reuters.c...s-idUSKCN11300L

 

So there is concern that raising interest rates too far too fast will OVERHEAT the economy........not crush it.

 

Simple - if total yearly interest paid on total debt exceeds about 20% of total GDP, we will be in recession. This is the load beyond which the economy will be crushed. If base rates go up other rates will go up. New debt is added, old debt rolls over, total interest owed goes up. The average rate now overall is 3 and change, it would only take a small increase of rates to blow that 20% limit, especially with debt always rising. Sure 1/4 point will not do it but these clowns are making it sound like we will get to "normal" rates and it ain't gonna happen.

 

This is a condition of debt saturation and that must be bled off. We did some good in that respect after the last crash, but that was undone and now we have scads more debt.

[kinga200]

Deflation depends on the beholder...

 

Are we talking about currency appreciation or diminishing prices...?  or both?

 

Bottom line is we are OVERPRODUCTIVE - and yet these geniuses down at the F'ed can't figure that out...

 

Alan Greenspan knew it, he was so far out as to suggest that we continue to manufacture excess goods and dump them in the sea or bury them if necessary... to keep the economy up.

 

So we're already overproductive and we're about to expand the man/machine interface by 5X  as the internet expands from 10B to 50B I.P. addresses, majority of them machines...over the next 5 years... through IoT (Internet of Things)

 

So could we have deflation... as fewer people work to make a living through "productive" pursuits as machines take over?  As we see personal income PLUMMET behind less employment and Personal spending dive with it?

 

Could we see an extension of the decline in discretionary spending as incomes shrink and taxes rise?

 

I'd say deflation is a very strong possibility...

 

Let's get real, we have 30 year olds still living with Mom and Dad ...

I am in the Deflationary camp as well.  When was the last Deflationary cycle in the US...it was in the 1800's.

[pdx5]

The FED policies could look radically different, depending on results of November election.

 

Not only WE are over producing, thanks to robotics, but so are China, Germany, and other countries in Asia.

The world is awash in manufacturing capacity. This is why everyone looking for hyper inflation has missed the boat. The CB's can print all they want, there is never going to be a shortage of goods. Hyper inflation requires shortage of goods for available spending money. Since the surplus money is going mostly all to the 1%, the supply of goods and services will keep exceeding the demand. The 99% are not increasing their discretionary spending money. The top 1% can not buy everything in sight. But prices of private jets and yachts and investment property will keep inflating.

Edited by pdx5, 29 August 2016 - 02:58 PM.

[Rogerdodger]

German Savers Lose Faith in Banks, Stash Cash at Home...

 

Low interest rates and the prospect of fees on bank deposits are helping drive a boom in home-safe sales.

“It doesn’t pay to keep money in the bank, and on top of that you’re being taxed on it,” said Uwe Wiese, an 82-year-old pensioner who recently bought a home safe to stash roughly €53,000 ($59,344), including part of his company pension that he took as a payout.

Germans point to the European Central Bank, which since 2014 has tried to reignite eurozone inflation by pushing interest rates below zero. Savers now face the prospect of being charged fees on their deposits. Some companies and large private depositors already incur charges.

The latest such sign that penalty rates are creeping in comes from a small cooperative bank in the Bavarian town of Gmund on the Tegernsee lake. As of Sept. 1, the bank, Raiffeisenbank Gmund, will charge its customers 0.4% on deposits above €100,000. Some 140 customers with total deposits worth €40 million are affected, said management board member Josef Paul.

Edited by Rogerdodger, 29 August 2016 - 04:22 PM.

[MaryAM]

I am in the deflationary camp because the money multiplier is lower today than it was in the 1930's. M2/monetary base. The boys will keep oil and some must have commodities up for awhile but that won,t last forever. I won't use heating oil until it goes much lower - getting two cords of wood next week and four tons of pellets. Farmers are still dumping milk to keep prices up - soon that will probably stop. Electric companies will try to keep rates high to service their debt but as energy costs go down people will soon have a say over that. A lot of debt based on inflationary expectations will simply have to die and go to money heaven - including sovereign debt.

[dasein]

if all those Germans are keeping the life savings at home - well AM is right to warn of attacks - heck - much better odds than robbing a bank!

[SemiBizz]

It's amazing, I guess I travel more than most on the board...

 

I been flying on empty airplanes, easy upgrades to First Class...

 

Just arrived at a 5 star Hotel today in Costa Rica, upgraded to Presidential Suite...

 

Hotel is a ghost town, and the staff says it's been that way for more than a month now...

 

We are so on the edge of a sudden recognition...

 

Don't get caught...

 

This is going to be MUCH WORSE than anything we saw in 2008...

 

I should have waited... the hotel just cut rates by 20%...

Edited by SemiBizz, 29 August 2016 - 11:11 PM.

[pdx5]

It's amazing, I guess I travel more than most on the board...

 

I been flying on empty airplanes, easy upgrades to First Class...

 

Just arrived at a 5 star Hotel today in Costa Rica, upgraded to Presidential Suite...

 

Hotel is a ghost town, and the staff says it's been that way for more than a month now...

 

We are so on the edge of a sudden recognition...

 

Don't get caught...

 

This is going to be MUCH WORSE than anything we saw in 2008...

 

I should have waited... the hotel just cut rates by 20%...

Thanks for your observations from a frequent world traveler. Here in Seattle area, house prices have increased 60% since 2011. We just sold our condo for 59.4% higher than what we paid in 2011. I guess few here have got the memo. We put the condo on market a month ago, and only 2 other units were on market in our sub-division of about 250 units. Now there are a dozen on the market, and do not see many "sold" signs yet. 

Edited by pdx5, 30 August 2016 - 12:15 AM.