OT - Survivalism Retail Style
Too_Many_Tools
And if you can buy goods for a few cents on the dollar, why won't your
boss expect the same deal when it comes to labor costs?
And will you see the degree of discounting in what you want to buy?
Finally...is this a sign of where housing and transportation are
headed..75% discounts and more?
TMT
After sales, will shoppers pay full price again?
By ANNE D'INNOCENZIO, AP Retail Writer Anne D'innocenzio, Ap Retail
Writer Wed Jan 7, 7:05 am ET
NEW YORK – Shoppers are getting used to those 75 percent off sale
signs, and that's bad news for merchants who worry they will also have
to quickly slash prices on spring goods to attract customers.
Anxieties about how rampant discounts have affected shoppers' psyches
and stores' profits are running high ahead of expected dismal December
sales figures on Thursday. The holiday season is anticipated to be the
worst in decades.
Already, retailers including Bebe Stores Inc. and J.Crew Group Inc.
are cutting prices on selected spring styles to lure sale-savvy
shoppers.
"It is a vicious cycle that no one wants to continue," said Gilbert
Harrison, chairman of Financo Inc., an investment banking firm
specializing in retailing. The discounts will be a key topic at
Financo's annual dinner on Monday for retail chief executives.
In addition, retailers expect competition from a rise in liquidation
sales — the fallout from the horrible holiday period.
Merchants struggling to clear out mounds of deeply discounted coats
and sweaters are wondering how they are going to get nervous shoppers
to splurge on new spring products.
The deep price cuts are making shoppers question the true value of
items. If they can get $200 jeans at 60 percent off, will they be
willing to pay the original price next fall?
"Our sense of what is fair and what is a good deal has changed," said
Michal Ann Strahilevitz, professor of marketing at the Golden Gate
University's Ageno School of Business. She said that a sale has to be
at least 70 percent off to be considered a bargain now.
Marcia Layton Turner, a mother of two from Rochester, N.Y., recently
walked away from an outfit that she spotted at a local Kohl's store
that was 50 percent off.
"Forty to 50 percent used to excite me," the 43-year-old writer said.
"Now, I want at least 70 percent." Turner says she has taken advantage
of 75 percent discounts on children's clothes in recent weeks and is
willing to wait to get the same type of deals in the coming months.
Consumers across the spectrum have been holding back.
Overall sales of apparel fell 17.3 percent from Nov. 30 through Jan.
3, while footwear sales dropped 12 percent compared to the same period
a year ago, according to figures released Wednesday by SpendingPulse,
a data service provided by MasterCard Advisors that estimates U.S.
retail sales across all payment forms including cash and checks.
Sales of electronics and appliances dropped 21.4 percent, while luxury
goods suffered a 27.6 percent drop. Online sales rose 4.6 percent.
Fourth-quarter profits are likely to decline more than 19 percent,
said Ken Perkins, president of research company RetailMetrics LLC.
Excluding Wal-Mart Stores Inc., one of the few bright spots, he said
the drop is expected to reach almost 28 percent.
Perkins predicts that profits will keep falling into the first
quarter, projecting an 11 percent drop; excluding Wal-Mart, that
figure is likely to fall more than 17 percent.
The financial meltdown in September that led to an abrupt halt in
spending came too late for merchants to dramatically adjust spring
inventories. Many stores order goods four to seven months in advance.
And while spring inventories are estimated to be down as much as 30
percent from year-ago levels, many analysts say that inventories
should be down even more. Barclays Capital analyst Jeff Black believes
it will take at least until the back-to-school season to get
inventories in line with consumer demand, and even then stores will
still face the challenge of weaning shoppers away from deals.
For those shoppers who could still load up on deeply discounted
merchandise, the last few weeks have been paradise. Even before the
Thanksgiving weekend, the traditional start of the holiday shopping
season, Saks Fifth Avenue marked down shoes by 70 percent.
But earlier deals look measly compared with some current offers as
merchants try to get rid of their holiday products by the end of the
month. The upscale DKNY store on New York's Madison Avenue is
plastered with a sign proclaiming "Up to 90 percent off."
As retailers work to clear out old merchandise, analysts say many are
trying to hold back on discounting new winter and spring items. Dan de
Grandpre, editor-in-chief of dealnews.com, said he is seeing more
bundling deals — a flat-panel TV that comes with a free Blu-ray
system, for example.
But many doubt that such strategies will work and predict early
discounts on spring goods. The signs are already there. Bebe has cut
certain spring sweaters by 25 percent, while J.Crew has marked some
spring items anywhere from 25 to 40 percent off, according to Amy
Wilcox Noblin, an analyst at PaliCapital Inc.
It will be years before shoppers are going to be enticed by discounts
of less than 50 percent, said C. Britt Beemer, chairman of America's
Research Group.
Traditional stores have also had to dump more excess goods at off-
price retailers like TJ Maxx, which reduce prices more, said Marshal
Cohen, chief industry analyst at market research firm NPD Group Inc.
But a bigger problem is liquidation sales at stores that are either
closing specific locations or shutting down the entire business.
Going-out-of-business sales at KB Toys and Linens 'N Things put
pressure on other retailers even before Christmas, and analysts expect
competition to get fiercer amid a likely spike in bankruptcy filings.
James Schaye, president and CEO of Hudson Capital Partners LLC., which
has overseen liquidations of Mervyns LLC, Tweeter Home Entertainment
Group Inc. and Steve & Barry's, estimated that his company liquidated
about $3 billion in merchandise in the October through December
period, compared with about $400 million a year ago.
Curly Surmudgeon
> Has the devaluation cycle begun?
>
> And if you can buy goods for a few cents on the dollar, why won't your
> boss expect the same deal when it comes to labor costs?
>
> And will you see the degree of discounting in what you want to buy?
>
> Finally...is this a sign of where housing and transportation are
> headed..75% discounts and more?
>
> TMT
That's more properly called "deflation":
http://en.wikipedia.org/wiki/Deflation_(economics)
I wonder if it's possible to simultaneously suffer both deflation and
inflation?
--
Regards, Curly
------------------------------------------------------------------------------
13 Days More of George Walker Bush Plundering the Economy
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spamT...@yahoo.com
The retail sector is going to have to adjust its expectations, and
move towards a model where they are profitable each and every month of
the year, not starting after thanksgiving!
And yes, that means there are going to be a hell of a lot fewer
retailers, and hopefully most of the malls collapse as well.
Not that this'll be enough to cure us USA-ians of our expectation of
absurd levels of consumption, but it'll be a start.
Dave
Too_Many_Tools
>
> - Show quoted text -
I also suspect that there will much less inventory on the shelves next
Christmas season.
I saw this trend from last year when retailers got caught with excess
from the season before that ...more expensive items with smaller
profit margins were not kept in stock.
Note how more and more store are pushing "ship to store"
options..placing the inventory costs on the suppliers.
TMT
EskW...@spamblock.panix.com
> Has the devaluation cycle begun?
> And if you can buy goods for a few cents on the dollar, why won't your
> boss expect the same deal when it comes to labor costs?
> And will you see the degree of discounting in what you want to buy?
> Finally...is this a sign of where housing and transportation are
> headed..75% discounts and more?
What you identify is a hallmark of massive deflation. It can be more
destructive than inflation, and deflationary pressures currently are
gaining steam.
EskW...@spamblock.panix.com
> I wonder if it's possible to simultaneously suffer both deflation and
> inflation?
Winston says Yes.
--
The whole problem with the world is that fools and fanatics are always so
certain of themselves, but wiser people so full of doubts.
-- Bertrand Russel
Dan
> On Wed, 07 Jan 2009 07:51:38 -0800, Too_Many_Tools wrote:
>
>> Has the devaluation cycle begun?
>>
>> And if you can buy goods for a few cents on the dollar, why won't your
>> boss expect the same deal when it comes to labor costs?
>>
>> And will you see the degree of discounting in what you want to buy?
>>
>> Finally...is this a sign of where housing and transportation are
>> headed..75% discounts and more?
>>
>> TMT
>
> That's more properly called "deflation":
>
> http://en.wikipedia.org/wiki/Deflation_(economics)
>
> I wonder if it's possible to simultaneously suffer both deflation and
> inflation?
>
8 years of Bush was not enough of a lesson in that?
Dan
Ed Huntress
<spamT...@yahoo.com> wrote in message
news:c78e9b4c-755c-4cd9...@h16g2000yqj.googlegroups.com...
On Jan 7, 10:51 am, Too_Many_Tools <too_many_to...@yahoo.com> wrote:
> Has the devaluation cycle begun?
<snip>
>The retail sector is going to have to adjust its expectations, and
>move towards a model where they are profitable each and every month of
>the year, not starting after thanksgiving!
For the record, we hear this refrain with every recession, and it never
happens. As long as there is free competition in retail (one of the freest
marketplaces in a nominally free economy), it probably *can't* happen.
Competition will force it to continue as a seasonally profitable business.
>And yes, that means there are going to be a hell of a lot fewer
>retailers, and hopefully most of the malls collapse as well.
Consolidation of retailers is possible. The malls probably will emerge
stronger than ever, because small, independent retailers are the ones that
will suffer from a lower state of economic equilibrium.
>Not that this'll be enough to cure us USA-ians of our expectation of
>absurd levels of consumption, but it'll be a start.
What's "absurd"? Do you mean levels sustained by growing deficit spending?
That's possible, maybe even likely. But if you mean that the economy will
wind down and stay there, that's very unlikely.
We'll probably hit a lower plateau, as we have after other serious
recessions, from which point we'll start to grow again. And that means
growth in consumption. The question is, consumption of *what*?
--
Ed Huntress
Ed Huntress
<EskW...@spamblock.panix.com> wrote in message
news:gk2ntk$ih9$2...@reader1.panix.com...
> In misc.survivalism Curly Surmudgeon <CurlySu...@live.com> wrote:
>
>> I wonder if it's possible to simultaneously suffer both deflation and
>> inflation?
>
> Winston says Yes.
Winston be wrong. You can have inflation and a contracting economy
(stagflation), or deflation and a contracting economy (recession), but you
can't have aggregate inflation and aggregate deflation at the same time.
--
Ed Huntress
CanopyCo
Did they mark it up 100% in the first place?
Maybe they will start charging a fair mark up instead of trying to
burn us every time.
Curly Surmudgeon
Depends on your definition of "deflation."
"Inflation destroys real value in money. Deflation creates real value in
money. Alternatively, the term deflation was used by the classical
economists to refer to a decrease in the money supply and credit; some
economists, including many Austrian school economists, still use the word
in this sense. The two meanings are closely related, since a decrease in
the money supply is likely to cause a decrease in the price level."
http://en.wikipedia.org/wiki/Deflation
Ed Huntress
"CanopyCo" <Junk...@aol.com> wrote in message
news:d09a199d-ee1c-4fb0...@s9g2000prg.googlegroups.com...
What I don’t get is how can they give 75% off and not loose money?
They can't. But they would lose more if it winds up as unsold inventory.
They're clearing their inventory, which most retailers have to do from time
to time -- at least, the ones that want to stay in business.
The counterexample is the old hardware store that keeps inventory forever.
The last one I know of around here went broke 15 years ago.
>Did they mark it up 100% in the first place?
Markup, markon...don't get us confused. <g> They more than double the price
they paid for it.
Clothing in big retailers is marked up around 60% or so. That means that
they pay $4 and sell it for $10. Jewelry is around 70%. And so on.
>Maybe they will start charging a fair mark up instead of trying to
>burn us every time.
Those are the "fair" markups. At those rates, they just make a profit.
BTW, when I was marketing machine tools, our typical markup was 55%.
--
Ed Huntress
T.Alan Kraus
> On Wed, 07 Jan 2009 07:51:38 -0800, Too_Many_Tools wrote:
>
>
>>Has the devaluation cycle begun?
>>
>>And if you can buy goods for a few cents on the dollar, why won't your
>>boss expect the same deal when it comes to labor costs?
>>
>>And will you see the degree of discounting in what you want to buy?
>>
>>Finally...is this a sign of where housing and transportation are
>>headed..75% discounts and more?
>>
>>TMT
>
>
> That's more properly called "deflation":
>
> http://en.wikipedia.org/wiki/Deflation_(economics)
>
> I wonder if it's possible to simultaneously suffer both deflation and
> inflation?
>
One section is totally inflated and another is deflated. It also happens
on vehicles sometimes where 3 tires might be well inflated , but one of
them is deflated. So yes it is possible! Patching and a air compressor
is the usual cure...
cheers
T.Alan
tmc...@searchmachine.com
> "CanopyCo" <Junk74...@aol.com> wrote in message
Don't confuse "markup" with "profit". You CANNOT make 100% profit on
anything unless you steal it and have no operating expenses. "Profit"
is the the money you make less the cost of selling the goods (actual
product cost plus operating expenses). "Markup" the difference between
the cost of the goods and the selling price. Most retailers "markup"
the goods at least 100%, to offset the operating expenses and make a
profit. If you pay $5 for something, sell it for $10, you have $5 left
to pay other expenses and (hopefully) put some cash in your pocket. As
long as your operating expenses are less than 50% of your gross sales,
a 100% markup will work. The lower your costs, the more profit you
make.
Strabo
It all depends on how you are effected at a given point along the time
line, and complex adjustments take a long time.
In a free market the true value of product or service is measured by the
amount of labor and/or real assets which are traded for it. Other
factors that alter the appearance of this value eventually become known
and removed. This constitutes an adjustment and may involve multiple and
simultaneous changes which may be seen during the process as adding or
subtracting from the true value.
1. The stock market is over-valued relative to the demand for goods
and services which the stocks represent. This artificial figure
is greater than the amount of physical currency available to buy
them. This has been the case for twenty years and effects the buying
power of the dollar.
2. The creation of phony contracts (derivatives fraud) claiming the
existence of trillions of of dollars, decreases the overall power
of the dollar which in turn increases the value of real assets.
3. Some people (buyers and sellers) are responding to these factors by
shutting down production and firing workers while others are
opportunistically buying real assets. In the meantime government
agents are creating and pumping trillions of digital dollars into the
mix.
These each contribute to the revaluation of the currency and
stabilization of the economy.
clams_casino
>What I don’t get is how can they give 75% off and not loose money?
>Did they mark it up 100% in the first place?
>
>
>
Firstly, most all goods are marked up at least 100% which generally
(hopefully) results in about 5-10% profit after all expenses.
Secondly, they are likely providing 75% off to minimize a loss - taking
a 25% loss vs. realizing additional costs of dumping the item, selling
it to a clearance house for cents on the dollar or continue to pay
inventory costs. More commonly, they probably initially marked it up
more than 100%. Do you really believe every item at Kohl's is sold at
a loss when they typically mark everything down about 50%?
Gunner Asch
wrote:
Excellent and accurate explaination
Gunner
"First Law of Leftist Debate
The more you present a leftist with factual evidence
that is counter to his preconceived world view and the
more difficult it becomes for him to refute it without
losing face the chance of him calling you a racist, bigot,
homophobe approaches infinity.
This is despite the thread you are in having not mentioned
race or sexual preference in any way that is relevant to
the subject." Grey Ghost
phil scott
factor this in anyway you can... what happens to govt tax revenue
when prices and wages take a hit?
answer, they tank, defunding government... which then prints money
(since it can no longer sell bonds contrary to its lies on the
matter).
the printed money becomes worthless... so bread eventually costs 40
million dollars a loaf.
there are delays in the cycle making these direct effects.
you are looking that delay phenomena
Phil scott
phil scott
> On Wed, 07 Jan 2009 07:51:38 -0800, Too_Many_Tools wrote:
> > Has the devaluation cycle begun?
>
> > And if you can buy goods for a few cents on the dollar, why won't your
> > boss expect the same deal when it comes to labor costs?
>
> > And will you see the degree of discounting in what you want to buy?
>
> > Finally...is this a sign of where housing and transportation are
> > headed..75% discounts and more?
>
> > TMT
>
> That's more properly called "deflation":
>
> http://en.wikipedia.org/wiki/Deflation_(economics)
>
> I wonder if it's possible to simultaneously suffer both deflation and
> inflation?
>
> --
> Regards, Curly
> 13 Days More of George Walker Bush Plundering the Economy
the combo deflation (seen in wages as jobs go scarce) is comonly seen
with inflated cost of goods and food due to
the worth-less currency.
and it is the worst of the worst...the total collapse scenario if govt
prints money to pay its own ..which it does.
Phil scott
phil scott
>
> - Show quoted text -
the primary driver is US govt bloat... from less than 1% of the GDP in
1901, to 48% 2001.
its not even remotely sustainable.
Phil scott
Curly Surmudgeon
http://www.adolfthegreat.com/site/fileadmin/Image_Archive/Talent-Art/
GermanWorthlessMoney.jpg
--
Regards, Curly
------------------------------------------------------------------------------
13 Days More of George Walker Bush Plundering the Economy
------------------------------------------------------------------------------
phil scott
> <EskWI...@spamblock.panix.com> wrote in message
>
> news:gk2ntk$ih9$2...@reader1.panix.com...
>
> > In misc.survivalism Curly Surmudgeon <CurlySurmudg...@live.com> wrote:
>
> >> I wonder if it's possible to simultaneously suffer both deflation and
> >> inflation?
>
> > Winston says Yes.
>
> Winston be wrong. You can have inflation and a contracting economy
> (stagflation), or deflation and a contracting economy (recession), but you
> can't have aggregate inflation and aggregate deflation at the same time.
>
> --
> Ed Huntress
in stagflation it is wages that stagnate or drop, and the price of
goods that inflate.
thus the term 'stag/flation' as counter intuitive as it seems.
so in that way there is no contradiction.. laid off or downsized
workers have that now as food prices rise and their income drops...
the worst of both worlds.
Phil scott
phil scott
gggaaaaaaaaassssppp... perish the thought.
phil scott
> On Wed, 07 Jan 2009 13:15:58 -0500, Ed Huntress wrote:
> >news:gk2ntk$ih9$2...@reader1.panix.com...
> >> In misc.survivalism Curly Surmudgeon <CurlySurmudg...@live.com> wrote:
>
> >>> I wonder if it's possible to simultaneously suffer both deflation and
> >>> inflation?
>
> >> Winston says Yes.
>
> > Winston be wrong. You can have inflation and a contracting economy
> > (stagflation), or deflation and a contracting economy (recession), but
> > you can't have aggregate inflation and aggregate deflation at the same
> > time.
>
> Depends on your definition of "deflation."
>
> "Inflation destroys real value in money. Deflation creates real value in
> money. Alternatively, the term deflation was used by the classical
> economists to refer to a decrease in the money supply and credit; some
> economists, including many Austrian school economists, still use the word
> in this sense. The two meanings are closely related, since a decrease in
> the money supply is likely to cause a decrease in the price level."
>
> http://en.wikipedia.org/wiki/Deflation
>
> --
> Regards, Curly
> 13 Days More of George Walker Bush Plundering the Economy
in the extreme cases of stagflation, a man will work all day for
half a bowl of rice.
the fiat currency used not relevant.
Phil scott
phil scott
> "CanopyCo" <Junk74...@aol.com> wrote in message
brick and motar retail is going to be taking larger and larger hits as
the same goods can be sold on line with
a fraction of the storage costs... and in the case or 'order to suit'
on line, almost no storage costs.
This will put serious pressure on commcl real estate owners.. as its
potential renters can no longer afford the rents.
for the nation to recover that real estate will have to become part
of the manufacturing cycle...imo.
already we are seeing that in depressed home price markets, as empty
homes are rented or taken over by squatters and used to
make crack cocaine, speed, angel dust, pink pimps, or to grow
majijanna. I have no earthly idea what can be done with all of this
ludicrously over built retail space...especially as fully half of our
work force retires over the next 8 years and begin dropping deader
than hell shortly there after (80 million folk who will not give a
damn where the walmart is)
Phil scott
Too_Many_Tools
>
> - Show quoted text -
I agree and you don't have to wait for it...check out the state
budgets.
46 out of 50 states are already in very deep trouble including our
beloved CA.
TMT
Too_Many_Tools
>
> - Show quoted text -
Phil makes a very good point about the aging demographics.
This recession/depression could not have come at a worse time for the
Baby Boomers.
Are you ready for Mom and Dad to move into your house?...or join you
under your selected bridge?
I am waiting to see what happens when the Government defaults...and
suddenly all those SS checks are worth the paper they are printed on.
TMT
Curly Surmudgeon
That's the word I was searching for, I'm losing my English...
"Stagflation," nasty.
> the fiat currency used not relevant.
>
>
> Phil scott
--
Regards, Curly
------------------------------------------------------------------------------
13 Days More of George Walker Bush Plundering the Economy
------------------------------------------------------------------------------
F. George McDuffee
-------------
Under normal conditions this would be an oxymoron like "dry
water."
But much depends on the "money of account." If you have two
currencies circulating at the same time in an economy, it would
indeed be possible to have a deflation with one and an inflation
with the other, even if these have the same nominal
name/denomination such as "dollars."
This appears to be the case in current situation.
In terms of actual FRB greenback dollars, there does appear to be
at least a slight deflation (which may well get worse) again
proving that in a downturn "cash is king," but a very
considerable inflation for the virtual dollars or "spondulicks,"
in that many more "spondulicks" are now required to purchase the
same quantities of goods/services, ==>when they can be exchanged
at all.<==
This is by no means unusual, and appears to what happened in the
1929 depression, except the majority of spondulicks hyper
inflated to the point of worthlessness, which was compounded by
the error of attempting to balance the budget by the Hoover
administration, further reducing the amount of money in
circulation, both real and spondulicks. Of course this resulted
in even more economic contraction and deflation, very similar to
bleeding a patient that has a hemorrhage.
Even where the currencies are specie (are, or are backed by
metal), this can occur. for example the "bimetallism" of William
Jennings Bryan, where the silver backed dollar was the spondulick
and the gold backed dollar was the "real" thing.
http://en.wikipedia.org/wiki/Bimetallism
http://www.micheloud.com/FXM/MH/Bimetalintro.htm
Having multiple denominations of currency in circulation, as is
currently the case in the international economy and many
countries, does not appear to be a serious problem, as long as
these are not allowed to have the same name and not commingled on
the balance sheets as the same unit, as has repeatedly occurred
with the US dollar and US spondulick.
May your IRAs and 401Ks be filled with US dollars and not
spondulicks this holiday season.
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).
wfhab...@hotmail.com
The prospects appear grim indeed... for those who followed the herd
and did not heed the most fundamental guidelines learned as a child.
At the current rate of increasing mark-down I expect to be paid to
take the stuff off the shelf:-))
Wolfgang
terryc
>
Are the items that you are buying on SALE, really the same items you buy
at other times?
My second job after leaving high school was a summmer job as a
storeperson for Woolworths. Main duty was "to clean up the store room"
which I proceeded to do. Major activity was put all the "same" stuff
together. Two months down the tracks, one of the old girls asked if
someone had explained how Woolworths worked?. Nope.
She then went onto explain that Woolworths had three lines; regular,
seasonal and SALE. Yep, the shoes you purchase on sale were not the same
shoes that you purchased normally. Different stock and defnitely not the
same quality.
I've since found that lots of business work the same way.
It is also modern business technique to have SALES. It is something that
accountants advise their clients to do (must be a tax lurk in it
somewhere).
Ed Huntress
"Too_Many_Tools" <too_man...@yahoo.com> wrote in message
news:01cda7b0-f0f9-4f7f...@d42g2000prb.googlegroups.com...
I *am* Dad. <g>
>...or join you
>under your selected bridge?
Chicken Little, it's time for you to get real. Haven't you lived through a
recession before? How old are you, anyway?
>I am waiting to see what happens when the Government defaults...and
>suddenly all those SS checks are worth the paper they are printed on.
Tell us about the last time the government defaulted. And tell us why it
would default now.
--
Ed Huntress
Ed Huntress
"F. George McDuffee" <gmcd...@mcduffee-associates.us> wrote in message
news:9dt9m41s0iihtcpph...@4ax.com...
> On Wed, 7 Jan 2009 13:15:58 -0500, "Ed Huntress"
> <hunt...@optonline.net> wrote:
>
>>
>><EskW...@spamblock.panix.com> wrote in message
>>news:gk2ntk$ih9$2...@reader1.panix.com...
>>> In misc.survivalism Curly Surmudgeon <CurlySu...@live.com> wrote:
>>>
>>>> I wonder if it's possible to simultaneously suffer both deflation and
>>>> inflation?
>>>
>>> Winston says Yes.
>>
>>Winston be wrong. You can have inflation and a contracting economy
>>(stagflation), or deflation and a contracting economy (recession), but you
>>can't have aggregate inflation and aggregate deflation at the same time.
> -------------
> Under normal conditions this would be an oxymoron like "dry
> water."
It's the case under abnormal conditions, too.
>
> But much depends on the "money of account." If you have two
> currencies circulating at the same time in an economy, it would
> indeed be possible to have a deflation with one and an inflation
> with the other, even if these have the same nominal
> name/denomination such as "dollars."
We don't have two currencies. We have one.
>
> This appears to be the case in current situation.
>
> In terms of actual FRB greenback dollars, there does appear to be
> at least a slight deflation (which may well get worse) again
> proving that in a downturn "cash is king," but a very
> considerable inflation for the virtual dollars or "spondulicks,"
> in that many more "spondulicks" are now required to purchase the
> same quantities of goods/services, ==>when they can be exchanged
> at all.<==
Spondulicks are not currency.
>
> This is by no means unusual, and appears to what happened in the
> 1929 depression, except the majority of spondulicks hyper
> inflated to the point of worthlessness, which was compounded by
> the error of attempting to balance the budget by the Hoover
> administration, further reducing the amount of money in
> circulation, both real and spondulicks. Of course this resulted
> in even more economic contraction and deflation, very similar to
> bleeding a patient that has a hemorrhage.
We had one currency under Hoover, too.
>
> Even where the currencies are specie (are, or are backed by
> metal), this can occur. for example the "bimetallism" of William
> Jennings Bryan, where the silver backed dollar was the spondulick
> and the gold backed dollar was the "real" thing.
> http://en.wikipedia.org/wiki/Bimetallism
> http://www.micheloud.com/FXM/MH/Bimetalintro.htm
We don't have a bimetal currency. It's a fiat currency.
>
> Having multiple denominations of currency in circulation, as is
> currently the case in the international economy and many
> countries, does not appear to be a serious problem, as long as
> these are not allowed to have the same name and not commingled on
> the balance sheets as the same unit, as has repeatedly occurred
> with the US dollar and US spondulick.
There are no spondulicks.
>
> May your IRAs and 401Ks be filled with US dollars and not
> spondulicks this holiday season.
>
>
> Unka' George [George McDuffee]
George, there is only one US currency. It's the same currency no matter
where you have it.
--
Ed Huntress
Ed Huntress
"phil scott" <ph...@philscott.net> wrote in message
news:c0e21387-a792-4cc6...@w24g2000prd.googlegroups.com...
That's been going on for some years now, and the ones taking the worst hits
appear to be specialty retailers who crossed regional boundaries because of
their narrowly marketed special products or services.
>This will put serious pressure on commcl real estate owners.. as its
>potential renters can no longer afford the rents.
The forces that have kept chain retailers (mall dwellers) in business
probably haven't changed. A lot of mall space (435,000 sq. ft.) has been
lost to bankrupcies and there will be more, but malls themselves aren't
likely to collapse because of current economic factors. As always, retail
will evolve over time, but short-term ups and downs don't seem to have much
effect.
> for the nation to recover that real estate will have to become part
> of the manufacturing cycle...imo.
It isn't clear to me what you're saying here.
>already we are seeing that in depressed home price markets, as empty
>homes are rented or taken over by squatters and used to
>make crack cocaine, speed, angel dust, pink pimps, or to grow
>majijanna. I have no earthly idea what can be done with all of this
>ludicrously over built retail space...especially as fully half of our
>work force retires over the next 8 years and begin dropping deader
>than hell shortly there after (80 million folk who will not give a
>damn where the walmart is)
>Phil scott
Most people who follow the construction trends and housing market think the
curves will cross sometime in late 2009 or 2010. At that point, the
*national* housing market will bottom out, because the overhang will be
drawn down. That's based on a projection that assumes current low rates of
construction (which looks like a safe bet) and unemployment that bottoms at
8% (a median, but somewhat hopeful bet). It's still not time to buy a house
if you can avoid it.
Commercial real estate is in some trouble and it's expected to get worse.
Mall unoccupancy rates are now 7.1% and rising, and it can take 24 months
after an economic upturn for retail space leasing to recover. So that will
be a slow and hard go.
Where you live can really shape your impression of what is happening
generally. If you live in a rapidly growing area, where there was a lot of
local overbuilding, it looks like hell. Where I live, in a mature town with
practically no new construction, prices never dropped at all. Our house
prices are slightly higher than they were two years ago. Commercial
properties, consequently, have held up well.
The regional differences are very large. National averages actually don't
look unrecoverable, but some regions won't be able to overcome the downturn.
Most probably will, as they always do in a recession.
--
Ed Huntress
Ed Huntress
"Ed Huntress" <hunt...@optonline.net> wrote in message news:...
>
> The forces that have kept chain retailers (mall dwellers) in business
> probably haven't changed. A lot of mall space (435,000 sq. ft.) has been
> lost to bankrupcies and there will be more, but malls themselves aren't
> likely to collapse because of current economic factors.
Whoops, I dropped something here. That loss is just for Simon Properties,
the largest of the Big 7 mall owners.
--
Ed Huntress
Winston
> In misc.survivalism Curly Surmudgeon <CurlySu...@live.com> wrote:
>
>> I wonder if it's possible to simultaneously suffer both deflation and
>> inflation?
>
> Winston says Yes.
Who?
--Winston
F. George McDuffee
-----------
Then why are the banks, brokerages, insurance companies, and
other financial institutions screaming like a stuck pig when they
must convert their bonds and other securities from spondulick
valuation to real dollar valuation, otherwise know as "mark to
market" under Sarbanes-Oxley?
This is analogous to the NPV calculations to determine what one
dollar to be received [or which may be received if things go
right] 3 years from now is worth today.
I would suggest that 100$ cash under my mattress is worth
considerably more than 100$ "invested" in GM stock or 2033 bonds,
particularly if the "investment" was made 6 months or a year ago.
terryc
> I am waiting to see what happens when the Government defaults...and
> suddenly all those SS checks are worth the paper they are printed on.
How is your government defaulting externally going to render their
cheques/checks invalid internally?
I'm told that the USA is a net food importer. with all your gear, you
should be able to set up as a manufacturer once the cheap shit from OS
disappears off the shelves.
john
F. George McDuffee wrote:
> On Wed, 7 Jan 2009 13:15:58 -0500, "Ed Huntress"
> <hunt...@optonline.net> wrote:
>
>
>><EskW...@spamblock.panix.com> wrote in message
>>news:gk2ntk$ih9$2...@reader1.panix.com...
>>
>>>In misc.survivalism Curly Surmudgeon <CurlySu...@live.com> wrote:
>>>
>>>
>>>>I wonder if it's possible to simultaneously suffer both deflation and
>>>>inflation?
>>>
>>>Winston says Yes.
>>
>>Winston be wrong. You can have inflation and a contracting economy
>>(stagflation), or deflation and a contracting economy (recession), but you
>>can't have aggregate inflation and aggregate deflation at the same time.
>
> -------------
> Under normal conditions this would be an oxymoron like "dry
> water."
dry steam, it can cut you in two and you won't even see it.
There have been instances of both deflation and inflation with a
retracting ecomomy. The key is the real value of the money system,
would you take the money for payment of goods or services. A retracting
econamy with an inflating dollar occurred in Germany after the first
World War. A wheelbarrow of dollars to buy a loaf of bread, it can't
happen here. Once the public realizes the dollar has no real value but
"the good faith and credit" of the US goverment and merchants refuse to
take the dollar you have the basis for inflation.
In the collapse of the economy in 1929 the dollar was backed by gold and
it retained its value even though there were fewer in the hands of the
general public. If you had dollars in the depression you were king.
They were hard to make and you were lucky to have a job.
In an inflated dollar and a recession, trading will become the nature of
exchange of goods and services, incrasing in use as the public
conception of the worth of the dollar goes into the toilet. If you have
a million dollars and no one will take it for payment, you are broke.
Tangeable assets, food, shelter, clothing, water,fuel,
are what you need to stay alive. Hopefully things will never gat that
bad, but they could.
John
terryc
> On Wed, 07 Jan 2009 13:31:15 -0800, Too_Many_Tools wrote:
>
>
>> I am waiting to see what happens when the Government defaults...and
>> suddenly all those SS checks are worth the paper they are printed on.
>
> How is your government defaulting externally going to render their
> cheques/checks invalid internally?
>
> I'm told that the USA is a net food importer.
woops, EXPORTER
john
Ed Huntress wrote:
Many Mall owners operate on a very tight financial leveraged system. (
they are practicing to be wall street CEO's) When their tenants start
to drop they will follow. Property taxes are a bitch, especially when
the buildings are on the best location, location , location.
John
Too_Many_Tools
> "Too_Many_Tools" <too_many_to...@yahoo.com> wrote in message
>
> - Show quoted text -
I have lived through many recessions Ed so this is the typical
"Chicken Little" post.
This is the worse this Country has seen since the Great Depression.
Now repeat that previous sentence until it sinks in.
Based on every data point I can find, that is the truth...no amount of
spin can change that.
If you have different data that says otherwise...let's see it.
This Government can easily default...simply by our creditors refusing
to fund any further US debt.
Take a hard look at China...they are already taking action to save
their own.
Are you worrying about the Chinese worker? Well they are not worrying
about you either.
And if you don't think the Government can default..well wasn't the SEC
supposed to be policing the markets? Weren't Freddie and Fannie Mac
supposed to be responsible? Wasn't AIG supposed to be covering
everyone's back? Hell I can go on and on and on....the system is
broken...really broken.
If you think SS is working properly and covered financially, you have
been drinking the Republican koolaid.
TMT
Ed Huntress
"john" <amd...@intergrafix.net> wrote in message
news:xomdnRknB7NNzPjU...@giganews.com...
But the malls won't disappear. If their present owners are overleveraged and
take a fall, they'll sell to someone at a reduced price. Or they'll go
under, and the receivers will do it for them.
Either way, a small decrease in value of an asset can turn overleveraged
owners belly-up, but the assets don't disappear because of it. They just get
discounted and sold.
--
Ed Huntress
Too_Many_Tools
>
> - Show quoted text -
Nope...importer.
Hard to believe but true.
TMT
Too_Many_Tools
> "john" <amd...@intergrafix.net> wrote in message
>
> news:xomdnRknB7NNzPjU...@giganews.com...
>
>
>
>
>
>
>
> > Ed Huntress wrote:
>
>
> >>>The forces that have kept chain retailers (mall dwellers) in business
> >>>probably haven't changed. A lot of mall space (435,000 sq. ft.) has been
> >>>lost to bankrupcies and there will be more, but malls themselves aren't
> >>>likely to collapse because of current economic factors.
>
> >> Whoops, I dropped something here. That loss is just for Simon Properties,
> >> the largest of the Big 7 mall owners.
>
> >> --
> >> Ed Huntress
>
> > Many Mall owners operate on a very tight financial leveraged system. (
> > they are practicing to be wall street CEO's) When their tenants start to
> > drop they will follow. Property taxes are a bitch, especially when the
> > buildings are on the best location, location , location.
>
> > John
>
> But the malls won't disappear. If their present owners are overleveraged and
> take a fall, they'll sell to someone at a reduced price. Or they'll go
> under, and the receivers will do it for them.
>
> Either way, a small decrease in value of an asset can turn overleveraged
> owners belly-up, but the assets don't disappear because of it. They just get
> discounted and sold.
>
> --
>
> - Show quoted text -
Those malls can remain unsold for decades...I have seen many of them
bulldozed...after the sherrif sale for the land only.
That is what is coming.
TMT
Too_Many_Tools
> "phil scott" <p...@philscott.net> wrote in message
>
> - Show quoted text -
Commercial real estate is ALOT OF TROUBLE Ed.
This is NOT your normal recession.
It is a severe WORLD recession...and the United States is up to its
collective neck in debt.
That makes any downturn more severe....much like walking a trapeze
without a net.
TMT
pyotr filipivich
tmc...@searchmachine.com reported Elvis on Wed, 7 Jan 2009 11:00:49
-0800 (PST) in misc.survivalism :
>On Jan 7, 1:38 pm, "Ed Huntress" <huntre...@optonline.net> wrote:
>> "CanopyCo" <Junk74...@aol.com> wrote in message
>>
>> news:d09a199d-ee1c-4fb0...@s9g2000prg.googlegroups.com...
>> What I don’t get is how can they give 75% off and not loose money?
>>
>> They can't. But they would lose more if it winds up as unsold inventory.
>> They're clearing their inventory, which most retailers have to do from time
>> to time -- at least, the ones that want to stay in business.
>>
>> The counterexample is the old hardware store that keeps inventory forever.
>> The last one I know of around here went broke 15 years ago.
>>
>> >Did they mark it up 100% in the first place?
>>
>> Markup, markon...don't get us confused. <g> They more than double the price
>> they paid for it.
>>
>> Clothing in big retailers is marked up around 60% or so. That means that
>> they pay $4 and sell it for $10. Jewelry is around 70%. And so on.
>>
>> >Maybe they will start charging a fair mark up instead of trying to
>> >burn us every time.
>>
>> Those are the "fair" markups. At those rates, they just make a profit.
>>
>> BTW, when I was marketing machine tools, our typical markup was 55%.
>>
>> --
>> Ed Huntress
>
>anything unless you steal it and have no operating expenses. "Profit"
>is the the money you make less the cost of selling the goods (actual
>product cost plus operating expenses). "Markup" the difference between
>the cost of the goods and the selling price. Most retailers "markup"
>the goods at least 100%, to offset the operating expenses and make a
>profit. If you pay $5 for something, sell it for $10, you have $5 left
>to pay other expenses and (hopefully) put some cash in your pocket. As
>long as your operating expenses are less than 50% of your gross sales,
>a 100% markup will work. The lower your costs, the more profit you
>make.
A good summation. Years ago, when I was in the used "stuff" biz,
the rule of thumb for buying used stuff was to start with the eventual
sale price, and then offer half. So that $5 widget (used) we'd offer
$2.50 for - max. Because we had to hold it for 4 weeks in the back,
while the cops ran a check for stolen goods.
Then there was the story of the High School reunion. and the dweeb
voted "most likely to fail" pulls up in the big car, with the driver,
and the fancy clothes, and the fancy broads. This is, as you can
imagine, a major sensation. When asked how he had become obviously so
wealthy, he said "It's simple. I buy stuff for a dollar, and sell it
for two or three. Amazing how that 1 to 2% adds up."
pyotr
--
pyotr filipivich
Next month's Panel: Graft - Boon or blessing?
Ed Huntress
==============================================
Ed:
The United States, of all countries, cannot default. Most sovereign
countries cannot default, but especially the US, because virtually all of
the obligations against us are in US dollars.
All we have to do to avoid default is to print money.
Now, nobody with serious financial responsibility, including foreign central
banks and private investors, thinks that's going to happen. That's why they
bought our Treasury bills at 0% interest.
==============================================
TMT:
Take a hard look at China...they are already taking action to save
their own.
Are you worrying about the Chinese worker? Well they are not worrying
about you either.
And if you don't think the Government can default..well wasn't the SEC
supposed to be policing the markets? Weren't Freddie and Fannie Mac
supposed to be responsible? Wasn't AIG supposed to be covering
everyone's back? Hell I can go on and on and on....the system is
broken...really broken.
===============================================
Ed:
What the hell does that have to do with the government defaulting?
===============================================
TMT:
If you think SS is working properly and covered financially, you have
been drinking the Republican koolaid.
===============================================
Ed:
SS is working properly. No, it isn't covered financially. To do that, you
raise payroll taxes. And not by that much, actually.
Next question, Mr. Little? <g>
--
Ed Huntress
Ed Huntress
============================================
TMT:
Those malls can remain unsold for decades...I have seen many of them
bulldozed...after the sherrif sale for the land only.
That is what is coming.
============================================
Which modern malls have you seen bulldozed, except to make way for
redevelopment and newer properties? And why did they go under, because
newer, bigger malls took away their business?
--
Ed Huntress
Ed Huntress
============================================
All right, TMT, so it's in a lot of trouble. Now, tell us, please, what that
means to you and me. No simplistic or speculative guesses, please. This is
evidence-based science we're doing here. d8-)
--
Ed Huntress
phil scott
> "Too_Many_Tools" <too_many_to...@yahoo.com> wrote in message
>
> - Show quoted text -
I dont want to start an argument. It seems though that in 1901 govt
costs and taxes were under 1% of national production...now its 48%...
so its a different mess we are looing at. Govts do default. none in
history has lasted longer than 300 years, most last more than 200
though... then collapse, loose empire etc and become shadows of their
former selves.
Phil scott
phil scott
> "phil scott" <p...@philscott.net> wrote in message
I think those folks are about as insane now in that thinking as they
were with bogus banking practices.
How to do they figure the 'lines will cross' with 80 million now
retireing with less than 40% or so replacements.
(will take two workers to pay enough SS to fund a single retiree)
>
> Commercial real estate is in some trouble and it's expected to get worse.
> Mall unoccupancy rates are now 7.1% and rising, and it can take 24 months
> after an economic upturn for retail space leasing to recover. So that will
> be a slow and hard go.
I think thats rosey, and I hope you are correct.. but I dont see even
a trace of that, I see a meltdown.
still gettig worse by 2010
>
> Where you live can really shape your impression of what is happening
> generally. If you live in a rapidly growing area, where there was a lot of
> local overbuilding, it looks like hell. Where I live, in a mature town with
> practically no new construction, prices never dropped at all. Our house
> prices are slightly higher than they were two years ago. Commercial
> properties, consequently, have held up well.
thats correct... In calif.. land of the complete disaster.
>
> The regional differences are very large. National averages actually don't
> look unrecoverable, but some regions won't be able to overcome the downturn.
> Most probably will, as they always do in a recession.
cleveland and the rest of the rustbelt had landed on their ass... and
its been decades now, no recovery... the basic drivers went negative
steel now made in china etc
Phil scott
cavelamb
>
> ============================================
>
> Which modern malls have you seen bulldozed, except to make way for
> redevelopment and newer properties? And why did they go under, because
> newer, bigger malls took away their business?
>
> --
> Ed Huntress
>
>
Ahh, so that's how my house got moved to the wrong place!
SMS
> The forces that have kept chain retailers (mall dwellers) in business
> probably haven't changed. A lot of mall space (435,000 sq. ft.) has been
> lost to bankrupcies and there will be more, but malls themselves aren't
> likely to collapse because of current economic factors.
Not sure where you are, but in my area (Silicon Valley) several malls
have collapsed and it's getting worse. Three were torn down for housing,
one is struggling along at about 10% occupancy other than the anchor
department stores and is in bankruptcy (the previous owners bought the
property planning to put in housing but the residents quashed that
idea). The few huge regional malls do okay, but the suburban malls don't.
Ed Huntress
>Phil scott
I don't know where the 48% comes from, Phil. OECD says our total taxes --
federal, state, and local -- are 28% of GDP, which makes our total taxes/GDP
the third-lowest in the developed world.
Where are you getting the 48%? Maybe I could start by looking into that.
--
Ed Huntress
Too_Many_Tools
> "phil scott" <p...@philscott.net> wrote in message
Those taxes are going to be going WAY UP to cover those trillions that
are being spent.
TMT
Too_Many_Tools
LOL...yeah Ed...everything is fine...no one has lost any money...all
those TRILLIONS AND TRILLIONS gone won't make a difference...nor will
the MULTI YEAR TRILLION decifits in your children's future.
And that money is continuing to be thrown at Freddie/Fannie, AIG, the
bank, the car companies....no problem.
And those 693,000 jobs just lost in December...well they don't matter
either.
LOL..tell you what...why don't we just sit back and see who might be
more right in 2009-10?
Until then we can just agree to disagree. ;<)
TMT
TMT
clams_casino
> It seems though that in 1901 govt
>costs and taxes were under 1% of national production...now its 48%...
>
>
>
Care to provide a reference? From what I've read, it's closer to 33%.
phil scott
> "phil scott" <p...@philscott.net> wrote in message
those are spun numbers for govt. nany books document the figure is
dramatically larger.. same spin seen with the govts bogus cpi indexes
govt GDP figures are spun the worst...by huge margines, same lies were
seen in the recent mortgage disaster, for instance govt purchases
are included in GDP, such as buying steel from china... added to our
GDP, as that steel was part of the 'production'...same with hamburger
flippers and poodle groomers. not all of that
is real goods production... nor are say 'banking products'
we know about the glorious banking products now.
Phil scott
phil scott
>
> - Show quoted text -
dear TMT. even though you have too many tools you are a very bright
man
Phil scott
phil scott
figures vary, depends on who's book your read, and to what degree
things like inflation and higher quality of life fact in
I wouldnt contest a 33% figure though... thats up 3,300 percent since
1901... pointing out the same level of disaterous govt bloat.
My guess though is that real figure would be way above 50%... since
our GDP figures currently include poodle grooming etc...not actual
goods production, which is in decline.
Phil scott
Ed Huntress
Yeah, I hear you. Now, where did you spin, er, get your numbers?
>govt GDP figures are spun the worst...by huge margines, same lies were
>seen in the recent mortgage disaster, for instance govt purchases
>are included in GDP, such as buying steel from china... added to our
>GDP, as that steel was part of the 'production'...
Nope. It doesn't work that way. Imports are subtracted from GDP.
>same with hamburger
>flippers and poodle groomers. not all of that
> is real goods production... nor are say 'banking products'
Nobody said it was goods production. GDP is the sum of all the goods and
services produced in the country in a year.
>we know about the glorious banking products now.
Tell us where you get that "48%." I'm curious.
--
Ed Huntress
phil scott
Ed, this has to end our conversation.. it seems that others on the ng
have you identified as a crank and now it is apparent to me... my
final remark on the
48% number is that it cannot possibly be accurate, no stats are, its
just one of the more common approximations...and there is much
published on that you can surely find and read for yourself
goodby'
Phil scott
Ed Huntress
<snip>
>Ed, this has to end our conversation.. it seems that others on the ng
>have you identified as a crank and now it is apparent to me... my
>final remark on the
>48% number is that it cannot possibly be accurate, no stats are, its
>just one of the more common approximations...and there is much
>published on that you can surely find and read for yourself
Yes, I can read it, Phil, and I have, for several decades now. And I've
written about it, and I have over 350 published articles and chapters of
three books, mostly on machining and the business of manufacturing,
including world trade, taxation, and related subjects.
What I know is that your number is baloney. That's not unusual here,
especially when, as I notice now, this message is cross-posted. You can't
provide a source for your number because it's a crock. We could have
discussed it and you would see *why* it's baloney, but you apparently would
rather believe your fantasies than find out what the truth of it is.
>goodby'
Don't let the door hit you on the way out, Phil.
--
Ed Huntress
Rod Speed
> Too_Many_Tools wrote
>> Has the devaluation cycle begun?
>> And if you can buy goods for a few cents on the dollar, why won't
>> your boss expect the same deal when it comes to labor costs?
>> And will you see the degree of discounting in what you want to buy?
>> Finally...is this a sign of where housing and transportation are
>> headed..75% discounts and more?
> That's more properly called "deflation":
> http://en.wikipedia.org/wiki/Deflation_(economics)
> I wonder if it's possible to simultaneously suffer both deflation and inflation?
Corse it is, some things deflate in a recession, some inflate.
The price of gasoline has obviously deflated. The cost of some
taxes, particularly property taxes, have inflated for some.
Rod Speed
> <EskW...@spamblock.panix.com> wrote
>> Curly Surmudgeon <CurlySu...@live.com> wrote
>>> I wonder if it's possible to simultaneously suffer both deflation and inflation?
>> Winston says Yes.
> Winston be wrong. You can have inflation and a contracting economy
> (stagflation), or deflation and a contracting economy (recession),
> but you can't have aggregate inflation and aggregate deflation at the
> same time.
He didnt say aggregate.
Ed Huntress
"Rod Speed" <rod.sp...@gmail.com> wrote in message
news:6snssrF...@mid.individual.net...
Then he shouldn't say "deflation." Prices rise and prices fall, and they can
rise in one category while falling in another. And you can make a semantic
case for using the terms inflation and deflation to describe them.
But that doesn't help one understand the economics of generalized inflation
and deflation, which have a much broader implication for growth, employment
opportunities, the functioning of banks and other financial institutions,
and so on.
It's best for clarity and understanding to use the terms in the way they're
most commonly used in describing national economies. When you pass a
threshhold of deflationary activity, the behaviors of individual segments of
an economy start feeding upon each other. That's when you can have trouble.
--
Ed Huntress
EskW...@spamblock.panix.com
> <EskW...@spamblock.panix.com> wrote in message
> news:gk2ntk$ih9$2...@reader1.panix.com...
> > In misc.survivalism Curly Surmudgeon <CurlySu...@live.com> wrote:
> >
> >> I wonder if it's possible to simultaneously suffer both deflation and
> >> inflation?
> >
> > Winston says Yes.
> Winston be wrong. You can have inflation and a contracting economy
> (stagflation), or deflation and a contracting economy (recession), but you
> can't have aggregate inflation and aggregate deflation at the same time.
Yep. But try to tell him that, and he will change the subject.
--
The whole problem with the world is that fools and fanatics are always so
certain of themselves, but wiser people so full of doubts.
-- Bertrand Russel
EskW...@spamblock.panix.com
> But much depends on the "money of account." If you have two
> currencies circulating at the same time in an economy, it would
> indeed be possible to have a deflation with one and an inflation
> with the other, even if these have the same nominal
> name/denomination such as "dollars."
> This appears to be the case in current situation.
> In terms of actual FRB greenback dollars, there does appear to be
> at least a slight deflation (which may well get worse) again
> proving that in a downturn "cash is king," but a very
> considerable inflation for the virtual dollars or "spondulicks,"
> in that many more "spondulicks" are now required to purchase the
> same quantities of goods/services, ==>when they can be exchanged
> at all.<==
What is a spondulick? How does one spend them for goods and services
without first converting them to dollars?
> This is by no means unusual, and appears to what happened in the
> 1929 depression, except the majority of spondulicks hyper
> inflated to the point of worthlessness, which was compounded by
> the error of attempting to balance the budget by the Hoover
> administration, further reducing the amount of money in
> circulation, both real and spondulicks. Of course this resulted
> in even more economic contraction and deflation, very similar to
> bleeding a patient that has a hemorrhage.
Is a spondulick every form of money other than currency? If so, then
what you say is just plain wrong. I can spend my virtual dollars via my
debit card at par. I can create virtual dollars via my credit card at
par.
> Having multiple denominations of currency in circulation, as is
> currently the case in the international economy and many
> countries,
OH. OK. So you are NOT talking about the USA?
does not appear to be a serious problem, as long as
> these are not allowed to have the same name and not commingled on
> the balance sheets as the same unit, as has repeatedly occurred
> with the US dollar and US spondulick.
Nope. Never has happened. The dollar value of assets, whether buildings,
inventory or whatever is noted on balance sheets.
What are some examples of spondulicks on the balance sheets of American
companies?
EskW...@spamblock.panix.com
> > I wonder if it's possible to simultaneously suffer both deflation and inflation?
> Corse it is, some things deflate in a recession, some inflate.
> The price of gasoline has obviously deflated. The cost of some
> taxes, particularly property taxes, have inflated for some.
Prices go up and down. To borrow the terms inflation and deflation as a
manner of speaking about individual price categories is not illuminating.
John R. Carroll
<EskW...@spamblock.panix.com> wrote in message
news:gk7iqh$6qc$1...@reader1.panix.com...
The value of risk arbitrage is principally set by ratings agencies.
In fact, risk isn't really tied to currency at all, it's modelled as an
outcome and assigned a probability.
>
> What are some examples of spondulicks on the balance sheets of American
> companies?
Collateralized Debt Obligations.
--
JC
F. George McDuffee
EskW...@spamblock.panix.com wrote:
<snip>
>What is a spondulick? How does one spend them for goods and services
>without first converting them to dollars?
While spondulicks are indeed fictional, the concept can help the
average person to make sense of a very confusing situation.
Spondulicks are dollar denominated securities that circulate just
like money. What makes this so insidious is that these are both
called "dollars," albeit very different kinds.
Back when the M&A activity first got going, it was common for
entire corporations to be purchased with "spondulicks," aka
"chinese currency," aka stock for stock exchanges.
It is still relatively easy to convert real dollars to
spondulicks, just buy stock or bonds.
Spondulick<-->spondulick exchanges are very common, for example
day stock trading.
The big problem is trying to convert spondulicks back into real
dollars, particularly for individuals, at anything close to par.
This generally requires very arcane institutions and
organizations such as banks and brokerages, which generally
charge high fees for the service, when it can be done at all. A
major problem now is the wildly varying conversion rate between
real and virtual dollars [aka spondulicks], e.g. 500 point daily
swings in the DJIA.
Operationally the "bank note era," when many US banks issued
their own notes of dubious value has been recreated, only better
in that the need to print anything has been eliminated.
for some background see
http://en.wikipedia.org/wiki/Banknotes
http://www.jstor.org/pss/2205280
Gresham's law states "bad money drives out good money," and this
seems to be what is occurring in the current economy.
Asking the question "are we talking about real money or
spondulicks," can help clarify many apparently contradictory
situations. For example, how can the US stock market be going up
when the US economy is contracting, and there is [apparently] a
real dollar deflation. IMNSHO the answer is that the US stock
market is now largely denominated in/dominated by spondulicks,
not [real] dollars.
Much of the recent Treasury/FRB activities also start to make
some sense if these are regarded as efforts to "manage" the real
dollar <--> spondulick exchange rates, much as the Dollar<-->Euro
and Dollar<-->Yen rates are managed.
On another level this is just so much BS, where huge sums of
[real] taxpayer money continue to disappear with no
accountability or results/benefits to the majority of
citizens/taxpayers.
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).
Curly Surmudgeon
> In misc.survivalism Ed Huntress <hunt...@optonline.net> wrote:
>
>> <EskW...@spamblock.panix.com> wrote in message
>> news:gk2ntk$ih9$2...@reader1.panix.com...
>> > In misc.survivalism Curly Surmudgeon <CurlySu...@live.com>
>> > wrote:
>> >
>> >> I wonder if it's possible to simultaneously suffer both deflation
>> >> and inflation?
>> >
>> > Winston says Yes.
>
>> Winston be wrong. You can have inflation and a contracting economy
>> (stagflation), or deflation and a contracting economy (recession), but
>> you can't have aggregate inflation and aggregate deflation at the same
>> time.
>
> Yep. But try to tell him that, and he will change the subject.
Instead of dissing Winston, I'd like to hear more about stagflation.
I'm not participating much in this thread because it's not my area of
expertise and I'm enjoying, deeply, the dialog and seeing things in a
different light than my preconceptions. I suspect many others are
likewise sitting on the sidelines watching the dialog intently. Thanks
for the comments and please do not pull the regular misc.survivalism
tactic of belittling each other. This is educational, let us form our
own opinions among different viewpoints rather than trying to hammer each
other into your personal opinion.
Early in Reagan's term we were worried about stagflation, it seem to be
upon us now. The death spiral it represents seems to have a snowball
effect where it is self-feeding and therefore difficult to escape once
entered.
Are we not entering a period of "stagflation"?
--
Regards, Curly
------------------------------------------------------------------------------
11 Days More of George Walker Bush Plundering the Economy
------------------------------------------------------------------------------
John R. Carroll
"F. George McDuffee" <gmcd...@mcduffee-associates.us> wrote in message
news:09rem457js2bskckv...@4ax.com...
> On Fri, 9 Jan 2009 13:18:09 +0000 (UTC),
> EskW...@spamblock.panix.com wrote:
> <snip>
>>What is a spondulick? How does one spend them for goods and services
>>without first converting them to dollars?
> <snip>
> While spondulicks are indeed fictional, the concept can help the
> average person to make sense of a very confusing situation.
>
> Spondulicks are dollar denominated securities that circulate just
> like money. What makes this so insidious is that these are both
> called "dollars," albeit very different kinds.
>
> Back when the M&A activity first got going, it was common for
> entire corporations to be purchased with "spondulicks," aka
> "chinese currency," aka stock for stock exchanges.
M&A has been going on for man's entire history George.
Hey, remember the "Highly Confident Letter"?
There wasn't ANYTHING real about that one - Mike even borrowed the pen he
signed the thing with.
HaHaHaHa!
JC
EskW...@spamblock.panix.com
> Spondulicks are dollar denominated securities that circulate just
> like money.
Ah. So nothing exists that meets the definition.
Try spending bearer bonds "just like money". Nothing "circulates just
like money" except money.
EskW...@spamblock.panix.com
> Early in Reagan's term we were worried about stagflation, it seem to be
> upon us now.
Not nearly. Inflation is not in the double-digits. Indeed, many folks
are worried about deflation instead.
Rod Speed
> "Rod Speed" <rod.sp...@gmail.com> wrote in message
> news:6snssrF...@mid.individual.net...
>> Ed Huntress wrote
>>> <EskW...@spamblock.panix.com> wrote
>>>> Curly Surmudgeon <CurlySu...@live.com> wrote
>>
>>>>> I wonder if it's possible to simultaneously suffer both deflation
>>>>> and inflation?
>>
>>>> Winston says Yes.
>>
>>> Winston be wrong. You can have inflation and a contracting economy
>>> (stagflation), or deflation and a contracting economy (recession),
>>> but you can't have aggregate inflation and aggregate deflation at
>>> the same time.
>>
>> He didnt say aggregate.
>
> Then he shouldn't say "deflation." Prices rise and prices fall, and
> they can rise in one category while falling in another. And you can
> make a semantic case for using the terms inflation and deflation to
> describe them.
> But that doesn't help one understand the economics of generalized
> inflation and deflation, which have a much broader implication for
> growth, employment opportunities, the functioning of banks and other
> financial institutions, and so on.
He didnt say he was talking about that.
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote
>>> I wonder if it's possible to simultaneously suffer both deflation and inflation?
>> Corse it is, some things deflate in a recession, some inflate.
>> The price of gasoline has obviously deflated. The cost of some
>> taxes, particularly property taxes, have inflated for some.
> Prices go up and down.
And plenty call prices going up inflation, and prices going down deflation.
> To borrow the terms inflation and deflation as a manner of speaking about individual price categories
They arent borrowed at all, thats part of what inflation is.
> is not illuminating.
Wrong.
Curly Surmudgeon
> In misc.survivalism Curly Surmudgeon <CurlySu...@live.com> wrote:
>
>> Early in Reagan's term we were worried about stagflation, it seem to be
>> upon us now.
>
> Not nearly. Inflation is not in the double-digits. Indeed, many folks
> are worried about deflation instead.
Only because energy costs have dropped by >50%. Real costs are rising
sharply, go grocery shopping or look at your health care premiums. Big
ticket items, such as cars and homes have disintegrated. That is
moderating the index otherwise the rates would be more indicative of cost
of living.
There is a latency, as shown historically, between opening the spigot of
Fed printing press, and inflation of 12-18 months. In other words
inflation begins a year or so after the Federal Government begins
printing money out of nothingness. Those presses went into overdrive
about 6 months ago, do the math.
It's hard to determine just how much green is being printed since Bush
eliminated M3 statistics a couple of years ago, it can only be inferred
and is very inexact.
F. George McDuffee
==============
Actually I was thinking even further back (into the 60s) when
"Engulf and Devour" [Gulf+Western] was touting "synergy" but
practicing "buy, ruin, sell" after milking every dime possible as
quickly as possible out of their newly acquired "cash cows" paid
for with G+W stock.
For people to young to know about G+W see
http://en.wikipedia.org/wiki/Gulf%2BWestern
http://www.fundinguniverse.com/company-histories/GULF-amp;-WESTERN-INC-Company-History.html
Another major player from this time frame was LTV
http://en.wikipedia.org/wiki/Ling-Temco-Vought
Thus for our younger readers, it is clear that when our current
business executives say that the current economic downturn was
totally unexpected, they are simply "blowing smoke," as this
cycle has been seen many times before.
For info on what we mean by the "highly confident letter"
---------
<snip>
Drexel, however, was more aggressive in its business practices
than most. When it entered the mergers and acquisitions field in
the early 1980s, it didn't shy away from backing hostile
takeovers—long a taboo among the established firms. Its specialty
was the "highly confident letter," in which it promised it could
get the necessary financing for a hostile takeover. Although it
had no legal status, Drexel's reputation for making markets for
any bonds it underwrote was such that a "highly confident letter"
was as good as cash to many of the corporate raiders of the
1980s.[2] Among the deals it financed during this time were Boone
Pickens' failed runs at Gulf Oil and Unocal, Carl Icahn's bid for
Phillips 66, Ted Turner's buyout of MGM/UA[2] and Kohlberg Kravis
Roberts successful bid for RJR Nabisco.[7]
<snip>
-----------
http://en.wikipedia.org/wiki/Drexel_Burnham_Lambert
While aggressive/abusive M&A activity is indeed as old as
humankind, e.g. Standard Oil, the huge upsurge in volume and
universal use of spondulicks to buy real assets, including "cash
in the bank," land, and buildings, seems to be quantitatively a
new development.
Ed Huntress
> Ed Huntress wrote:
>> "Rod Speed" <rod.sp...@gmail.com> wrote in message
>> news:6snssrF...@mid.individual.net...
>>> Ed Huntress wrote
>>>> <EskW...@spamblock.panix.com> wrote
>>>>> Curly Surmudgeon <CurlySu...@live.com> wrote
>>>
>>>>>> I wonder if it's possible to simultaneously suffer both deflation
>>>>>> and inflation?
>>>
>>>>> Winston says Yes.
>>>
>>>> Winston be wrong. You can have inflation and a contracting economy
>>>> (stagflation), or deflation and a contracting economy (recession),
>>>> but you can't have aggregate inflation and aggregate deflation at
>>>> the same time.
>>>
>>> He didnt say aggregate.
>>
>> Then he shouldn't say "deflation." Prices rise and prices fall, and
>> they can rise in one category while falling in another. And you can
>> make a semantic case for using the terms inflation and deflation to
>> describe them.
>> But that doesn't help one understand the economics of generalized
>> inflation and deflation, which have a much broader implication for
>> growth, employment opportunities, the functioning of banks and other
>> financial institutions, and so on.
>
> He didnt say he was talking about that.
I think that was Roy. I just picked up on what ESKwired said.
--
Ed Huntress
Ed Huntress
The way the terms are used when talking about economics effects, they're
generally used to refer to general, or aggregate increases or decreases in
price levels. For example, from _The Economist's_ "Economics A-Z":
"DEFLATION: Deflation is a persistent fall in the general price level of
goods and SERVICES. It is not to be confused with a decline in prices in one
economic sector or with a fall in the INFLATION rate (which is known as
DISINFLATION)."
"INFLATION: Rising PRICES, across the board. Inflation means less bang for
your buck, as it erodes the purchasing power of a unit of currency.
Inflation usually refers to CONSUMER PRICES, but it can also be applied to
other prices (wholesale goods, WAGES, ASSETS, and so on). It is usually
expressed as an annual percentage rate of change on an INDEX NUMBER."
The common dictionary definitions are fine as far as they go, but they don't
help to understand macroeconomic effects, such as the effects of inflation
or deflation on national unemployment rates, or bank interest, and so on.
--
Ed Huntress
Too_Many_Tools
> On Fri, 09 Jan 2009 13:06:05 +0000, EskWIRED wrote:
>
> >> <EskWI...@spamblock.panix.com> wrote in message
> >>news:gk2ntk$ih9$2...@reader1.panix.com...
> >> > In misc.survivalism Curly Surmudgeon <CurlySurmudg...@live.com>
> 11 Days More of George Walker Bush Plundering the Economy
>
> - Show quoted text -
I think we are already there.
Perhaps someone would care to tell us what is difference between now
and the fiscal events that led to stagflation?
TMT
Ed Huntress
"John R. Carroll" <jcarroll@ubu,machiningsolution.com> wrote in message
news:uXI9l.10081$W06....@flpi148.ffdc.sbc.com...
I think there's a real danger here of confusing and making a mess of
understanding.
Those CDOs are denominated in *dollars*. Their value, whether in terms of
purchase price, market price, or pie-in-the-sky, are written in those books
as *dollars* of value (or non-value or phony value; that's not the point).
As for "buying" companies with spondulicks, or whatever the hell their name
is, those are *barter* deals -- assets for assets. They don't inflate or
deflate with general movements in the economy. They explode or crash
according to the phase of the moon. <g>
I get the point George is trying to make but I sharply disagree with it.
Those assets inflate or deflate in terms of dollars; their inflation or
deflation in terms of *each other* just tells us that their (perceived)
dollar values are increasing or decreasing, relative to each other. They
aren't currency; again, they're assets that a narrow group of specialists
trade with each other, like a farmer might trade corn for a tractor repair.
If we're going to make any sense of inflation and deflation, you need a
reference point on which to stand, and that reference point, as is made
clear in the _Economist's_ definition I posted earlier, is currency. We have
only one currency. The value of everything else in our economy is measured
in currency units. If people bet on the value of a spondulick when trading
it for their stock, the underlying value they're speculating about is the
dollar value they can get by selling it.
What George is suggesting is that they have an economic life of their own,
and that they can be inflating while the currency is deflating. If you want
to stretch the point (which he is doing, anyway), you can say that about any
commodity. Gold and pork bellies have lives of their own. But all that means
is that their value, relative to something else, is going up or down. And
the only measure that has meaning in the macro sense is dollars -- our
currency.
Laid -off workers aren't paid in spondulicks, and we don't ask the banks
what their spondulick interest rate is. Assets that are traded and bartered
have an influence on the economy but, in themselves, they don't send the
economic signals that produce inflation or deflation. Their *dollar value*,
rising or falling, sends the signals.
So it's an interesting side argument, but it doesn't help clarify the forces
that are at work, any more than they would if we talked about the "housing
currency," or the "car inventory currency," or whatever. Those are assets
whose rises and falls may have broad economic implications, but the only way
they relate to inflation and deflation is through their market value in
dollars.
There. I'm done with it. If George keeps spondulicks in his wallet, I'll
take all of this back. d8-)
--
Ed Huntress
Too_Many_Tools
> On Fri, 09 Jan 2009 18:16:26 +0000, EskWIRED wrote:
> > In misc.survivalism Curly Surmudgeon <CurlySurmudg...@live.com> wrote:
>
> >> Early in Reagan's term we were worried about stagflation, it seem to be
> >> upon us now.
>
> > Not nearly. Inflation is not in the double-digits. Indeed, many folks
> > are worried about deflation instead.
>
> Only because energy costs have dropped by >50%. Real costs are rising
> sharply, go grocery shopping or look at your health care premiums. Big
> ticket items, such as cars and homes have disintegrated. That is
> moderating the index otherwise the rates would be more indicative of cost
> of living.
>
> There is a latency, as shown historically, between opening the spigot of
> Fed printing press, and inflation of 12-18 months. In other words
> inflation begins a year or so after the Federal Government begins
> printing money out of nothingness. Those presses went into overdrive
> about 6 months ago, do the math.
>
> It's hard to determine just how much green is being printed since Bush
> eliminated M3 statistics a couple of years ago, it can only be inferred
> and is very inexact.
>
> --
> Regards, Curly
> 11 Days More of George Walker Bush Plundering the Economy
I agree with Curly on this one.
And yes...those presses are smoking.
It will be the cause for the cancer that will afflict the next
generations who will need to pay for the paper being printed.
TMT
Ed Huntress
"Too_Many_Tools" <too_man...@yahoo.com> wrote in message
news:424d0d45-87a6-46df...@o4g2000pra.googlegroups.com...
Sorry, Curly, but I have you blocked and only saw this on the quote. d8-)
No, this is not stagflation. The economy is winding down and unemployment is
rising, but the trend in general price levels has turned down and the fear
now is deflation. When those three things go together, you have recession,
not stagflation.
Stagflation implies an upward spiral in inflation. Regardless of what source
you accept for current price levels, there is no increase; the CPI has been
falling sharply since July.
That doesn't mean that it can't happen in the future, but it looks unlikely
for quite a while to come. We're in a deepening recession, and most people
who watch closely expect price levels to fall more before they level off.
--
Ed Huntress
Too_Many_Tools
> "Too_Many_Tools" <too_many_to...@yahoo.com> wrote in message
>
> - Show quoted text -
How about once those hundreds of billions of dollars that are being
printed enter the economy?
TMT
Ed Huntress
We'll see. The dollar has been flat or rising against most other currencies,
so it's unlikely that inflation would take right off with even a large
increase in money supply. At some point, yes, it will cause inflation -- but
not before velocity increases (in other words, before people start buying
stuff).
What will matter is the point from which inflation occurs. Right now it
appears we've just crossed the zero point into deflation. If it's six months
before the trend turns up, a little inflation will be a very welcome thing.
--
Ed Huntress
Curly Surmudgeon
> "Too_Many_Tools" <too_man...@yahoo.com> wrote in message
> news:9042e9de-3b9b-40d1...@40g2000prx.googlegroups.com...
> On Jan 9, 2:54 pm, "Ed Huntress" <huntre...@optonline.net> wrote:
>> "Too_Many_Tools" <too_many_to...@yahoo.com> wrote in message
>>
>> news:424d0d45-87a6-46df-8d83-
fc9f6f...@o4g2000pra.googlegroups.com...
There is no direct relationship between exchange rates and inflation,
only a slight correlation.
> At some point, yes, it will cause
> inflation -- but not before velocity increases (in other words, before
> people start buying stuff).
>
> What will matter is the point from which inflation occurs. Right now it
> appears we've just crossed the zero point into deflation. If it's six
> months before the trend turns up, a little inflation will be a very
> welcome thing.
Again, this is due more to the disintegrating home and declining vehicle
costs than to real deflation. Major ticket items are always the first
casualty, even while cost of living is climbing.
--
Regards, Curly
------------------------------------------------------------------------------
11 Days More of George Walker Bush Plundering the Economy
------------------------------------------------------------------------------
Too_Many_Tools
Could it be that the banks holding on to their 350 billion bailout
(except for bonuses of course) be a good thing? If the masses can't
access credit, they can't spend and without money in the system there
is no inflation.
TMT
Ed Huntress
On Jan 9, 3:32 pm, "Ed Huntress" <huntre...@optonline.net> wrote:
> "Too_Many_Tools" <too_many_to...@yahoo.com> wrote in message
<snip>
> >How about once those hundreds of billions of dollars that are being
> >printed enter the economy?
>
> We'll see. The dollar has been flat or rising against most other
> currencies,
> so it's unlikely that inflation would take right off with even a large
> increase in money supply. At some point, yes, it will cause inflation --
> but
> not before velocity increases (in other words, before people start buying
> stuff).
>
> What will matter is the point from which inflation occurs. Right now it
> appears we've just crossed the zero point into deflation. If it's six
> months
> before the trend turns up, a little inflation will be a very welcome
> thing.
>
> --
> Ed Huntress- Hide quoted text -
>
> - Show quoted text -
>Could it be that the banks holding on to their 350 billion bailout
>(except for bonuses of course) be a good thing? If the masses can't
>access credit, they can't spend and without money in the system there
>is no inflation.
>TMT
To answer the question you're really asking, no, it's not a good thing. With
no credit, there's little consumption; with little consumption, there's
declining or flat production; with declining or flat production, there's no
increase in employment; and so on, around the circle. No credit, no economy.
We wind up raising chickens in our SUVs. <g>
To answer a question you didn't ask, having the banks sit on that money or
use it to buy other banks, while it causes wailing and gnashing of teeth in
Congress and in the press, may be good in the longer term, because the banks
are ripe for some consolidation and will wind up stronger, and will be a lot
less vulnerable to downturns. They'll raise their reserves and they'll be
choosy about their loans. This is the good side, which compensates to some
degree for the bad side.
My guess, only from reading the experts and not from any real knowledge of
it, is that the people in Treasury think the good side is worth it. The
people in Congress don't think it's worth it. I have no way of knowing who
is right.
Now, forget you heard that, and don't tell anyone you heard it from me. d8-)
--
Ed Huntress
EskW...@spamblock.panix.com
> On Fri, 09 Jan 2009 18:16:26 +0000, EskWIRED wrote:
> > Not nearly. Inflation is not in the double-digits. Indeed, many folks
> > are worried about deflation instead.
> Only because energy costs have dropped by >50%. Real costs are rising
> sharply, go grocery shopping or look at your health care premiums. Big
> ticket items, such as cars and homes have disintegrated. That is
> moderating the index otherwise the rates would be more indicative of cost
> of living.
All of those items are factored in. They are all a part of "real costs".
John R. Carroll
"Ed Huntress" <hunt...@optonline.net> wrote in message
news:4967de06$0$14315$607e...@cv.net...
Congress understands this pretty well.
Actually, they are getting an education but that will prove to be a
distinction without any difference.
JC
Dan
> On Fri, 09 Jan 2009 18:16:26 +0000, EskWIRED wrote:
>
>> In misc.survivalism Curly Surmudgeon <CurlySu...@live.com> wrote:
>>
>>> Early in Reagan's term we were worried about stagflation, it seem to be
>>> upon us now.
>> Not nearly. Inflation is not in the double-digits. Indeed, many folks
>> are worried about deflation instead.
>
> Only because energy costs have dropped by >50%. Real costs are rising
> sharply, go grocery shopping or look at your health care premiums. Big
> ticket items, such as cars and homes have disintegrated. That is
> moderating the index otherwise the rates would be more indicative of cost
> of living.
>
> There is a latency, as shown historically, between opening the spigot of
> Fed printing press, and inflation of 12-18 months. In other words
> inflation begins a year or so after the Federal Government begins
> printing money out of nothingness. Those presses went into overdrive
> about 6 months ago, do the math.
>
> It's hard to determine just how much green is being printed since Bush
> eliminated M3 statistics a couple of years ago, it can only be inferred
> and is very inexact.
>
As you say, looking at the real world of personal finance, price
inflation has been with us big time for at least 6 years, most likely
more, and has been systematically underreported since at least Reagan,
perhaps Nixon. During that entire time, in real terms, the economy has
been stagnant.
Stagflation. What kept the economy from collapsing sooner was massive
borrowing at the personal and business levels, including, but not
limited to, mortgages and the parlaying of derivatives.
Dan
Too_Many_Tools
Chickens in our SUVs....I like that. ;<)
I can hear the questions now..."How many eggs per gallon do you get?"
Instead of number of cup holders it will be "how many hen holders do
you have?"
I do understand the need for consolidation in the financial sector...I
hear the insider stories all the time and it is an industry long over
due for consolidation.
But as you mention...stronger banks and no economy means one is
putting all your chickens in one SUV.
TMT
Too_Many_Tools
<jcarroll@ubu,machiningsolution.com> wrote:
> "Ed Huntress" <huntre...@optonline.net> wrote in message
>
> news:4967de06$0$14315$607e...@cv.net...
>
>
>
>
>
>
>
> > "Too_Many_Tools" <too_many_to...@yahoo.com> wrote in message
>
> - Show quoted text -
Well it may help.
Congress has control over the other 30 billion of dollars of the
bailout...which is why Bush hasn't spent it yet.
It is also why the White House was bitching so much about giving the
car companies any money...it was coming out of the 350 billion dollars
that he had control of and what little he had left after giving the
mjority to the banks.
Congress isn't as dumb as conservatives would like us to think.
TMT
Too_Many_Tools
> Curly Surmudgeon wrote:
> > On Fri, 09 Jan 2009 18:16:26 +0000, EskWIRED wrote:
>
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> - Show quoted text -
I agree...and if the amount of credit is available at more saner
levels the "good old days" that we just went through are over...time
to pay the piper.
I think the recession will last longer than anyone thinks it will and
the recovery will much more subdued than we are used to.
Kindna like a hangover after the party...
TMT
TMT
cavelamb
>
> To answer the question you're really asking, no, it's not a good thing. With
> no credit, there's little consumption; with little consumption, there's
> declining or flat production; with declining or flat production, there's no
> increase in employment; and so on, around the circle. No credit, no economy.
> We wind up raising chickens in our SUVs. <g>
>
> To answer a question you didn't ask, having the banks sit on that money or
> use it to buy other banks, while it causes wailing and gnashing of teeth in
> Congress and in the press, may be good in the longer term, because the banks
> are ripe for some consolidation and will wind up stronger, and will be a lot
> less vulnerable to downturns. They'll raise their reserves and they'll be
> choosy about their loans. This is the good side, which compensates to some
> degree for the bad side.
>
> My guess, only from reading the experts and not from any real knowledge of
> it, is that the people in Treasury think the good side is worth it. The
> people in Congress don't think it's worth it. I have no way of knowing who
> is right.
>
> Now, forget you heard that, and don't tell anyone you heard it from me. d8-)
>
> --
> Ed Huntress
>
>
That has been my numba one question for quite a while, Ed.
"How far back do we get knocked?"
1970s?
1950s?
1930s?
1900?
And what population level does that economy support?
Or, in other words, how many people have to go bye bye???
Ed Huntress
On Jan 9, 5:30 pm, "Ed Huntress" <huntre...@optonline.net> wrote:
<snip>
> My guess, only from reading the experts and not from any real knowledge of
> it, is that the people in Treasury think the good side is worth it. The
> people in Congress don't think it's worth it. I have no way of knowing who
> is right.
>
> Now, forget you heard that, and don't tell anyone you heard it from me.
> d8-)
>
> --
> Ed Huntress- Hide quoted text -
>
> - Show quoted text -
>Chickens in our SUVs....I like that. ;<)
>I can hear the questions now..."How many eggs per gallon do you get?"
>Instead of number of cup holders it will be "how many hen holders do
>you have?"
You just put a little straw in the holders.
>I do understand the need for consolidation in the financial sector...I
>hear the insider stories all the time and it is an industry long over
>due for consolidation.
>But as you mention...stronger banks and no economy means one is
>putting all your chickens in one SUV.
>TMT
I'll vote for the economy and screw the consolidation, but I wouldn't know
about trying to run a bank, either.
--
Ed Huntress
Ed Huntress
"cavelamb" <cave...@earthlink.net> wrote in message
news:I-6dnVjF5O_OkvXU...@earthlink.com...
We start by putting all the anti-regulatory economists on cakes of ice and
shoving them off from Pier 88 in Manhattan -- in warm weather.
--
Ed Huntress