9/18/07 - A Sad Day For America

me 2... i make $40k a year, and I am being punished for being financially responsible. It's bs. Well, the joke is on us, eh? And I was the one making fun of friends for taking out the mortgages they had no chance of paying off. Oh well.

Quote from Semrad:

But the inflationary gauges CPI and PPI exclude food and energyso that leaves metal, housing and tuitions.

Well housing is a bubble that will settle and tuition, well free economy.

So our economy is doing great.

Psych!!! Here comes the rate cuts to bail out the basterds who bought houses on interst only loans while suckers like me who rented hoping the housing prices to go down so I can put 20% down and get a decent mortgage are being screwed royally without any lubricants cause you know what all the dollars I saved up aren't even worth using as toilet paper.
More...
 
Quote from RoughTrader:

It's so fascinating to see Japan's recent history play out exactly in the U.S. Japan's central bank panicked in a similar fashion (albeit slightly AFTER a real collapse started to surface), and moved the funds rate all the way to 0%.

Did this stimulate spending? No, it didn't. In fact the Japanese consumer decided to save even more cash. It's interesting that as borrowing became increasingly affordable, the nation as a whole decided to stuff their money in savings rather than put it to use for consumption or venture capital.

As I've stated time and again, the issue is no longer rates, but confidence in the system. When the overall mindset becomes risk-intolerant, (as both banks and consumers are becoming toward real estate here), the economy steadily grinds to a halt. The worst consequence of this is a massive deflationary spiral like Japan has endured for decades.

There's no avoiding it. All this phony liquidity MUST be washed out of th system under a period of DEFLATION before our economy can get healthy again. It's going to happen regardless of monetary policy.

RoughTrader
More...

Yeah, but you're underestimating the stupidity of the average consumer. You're assuming they will act rationally, when it is irrationality that lead them to taking bad loans to begin with. I'll bet you the average joe on the street doesn't even know the difference between recession and inflation, let alone how to react to it. Joe Six Pack and Suzie Creamcheese will just keep making their paycheck and blowing it on stuff at Walmart. They don't have the discipline to save like the Japanese, nor do they have the understanding of why it might be wise.

SM
 
What good is a rate cut that pushes yields higher?

w
 
Quote from bellman:

me 2... i make $40k a year, and I am being punished for being financially responsible. It's bs. Well, the joke is on us, eh? And I was the one making fun of friends for taking out the mortgages they had no chance of paying off. Oh well.
More...

That's what you get you stooopid idiot. You should've been at least 80k in debt, based on your salary. Then you to would benefit from the effects of inflation.

I hate irresonsible, responsible people in inflationary times.
 
nicely done.

Quote from The Kin2:

That's what you get you stooopid idiot. You should've been at least 80k in debt, based on your salary. Then you to would benefit from the effects of inflation.

I hate irresonsible, responsible people in inflationary times.
More...
 
Quote from The Kin2:

That's what you get you stooopid idiot. You should've been at least 80k in debt, based on your salary. Then you to would benefit from the effects of inflation.

I hate irresonsible, responsible people in inflationary times.
More...

the Bernanke rate cut is the "please-buy-my-underwater-condo" monetary Dunkirk...

something the gold market is coming to understand........
 
Quote from The Kin2:

That's what you get you stooopid idiot. You should've been at least 80k in debt, based on your salary. Then you to would benefit from the effects of inflation.

I hate irresonsible, responsible people in inflationary times.
More...

Yeah, that's really sound, smart advice.

RoughTrader
 
You must log in or register to reply here.
Back
Top