Is high inflation coming after this crisis??
- Thread starter jueco2005
- Start date
Current home prices are not supportable by current incomes. Either home prices need to deflate by a great deal (another 30-50%), or incomes need to inflate by a great deal.
I don't see how incomes inflate in a globally competitive environment, so that only leaves...
You're correct so long as the dollar maintains or increases in value. But, I don't think that's going to be the case 3-5 years out.
In the time leading up to that we're going to see further declines in house prices and income over many sectors.
Just the same, I think that current home inventories shrink as those prices fall, but it's not going to be individual homeowners doing the buying this time.
I think we've seen a generational, possibly multi-generational, peak in terms of home ownership.
bingo......they can inflate the currency all they like, but he fact remains that even the real value of assets are inflated based on overtrading/overspeculation or whatever you wish to call it.
That is what I am trying to say. The inflation of the currency is neither here not there when it comes to this crisis. This whole crisis is an issue of skewed values, and those values must deflate.
Usually, in this envrionment it is nearly impossible to inflate the currency anyway, as the money does not enter circulation, but sits in the vault for good balance sheets.
Hogwash. Monetary inflation lifts all prices.
Uh, this crisis was never about the over inflated assets themselves. This was all brought on because of the multiple layers of grossly over leveraged debt instruments that were created on top of those assets.
Once the subprime end of the mortgage market started to unravel the most highly levered of the structured instruments lost all of their value practically overnight and that participated an avalanch effect due to one massive, interconnected negative feedback loop.
Usually? This "environment" is without precedent in all of recorded financial history.
Hell, all of this could effectively end in two weeks if the G20 decided that it just might be better to lift the cover and punch the reset button.
Not that that's likely to happen...
no shit sherlock
"this crisis was never about the over inflated assets themselves. This was all brought on because of the multiple layers of grossly over leveraged debt instruments that were created on top of those assets."
oh really sherlock.... cause and effect dude....the debt instruments are just capital chopping and wouldnt have become an issue if the assets were not overvalued and overspeculated
yes the debt instruments helped in the overtrading - but only as a catalyst - that would have happened anyway as it has done so for the past hundreds of years
i do not have the patience for this forum
everybody has a chip on their shoulder and comes out with guns blazing as if they are the smartest kid on the block..just trying to stroke an ego
ive had enough
leave you all to it
we all fall foul to intellectual egosim
everyone on this forum needs to take a good hard look at themselves...
myself included sometimes
it just doesnt acheive anything
it just ruins a healthy debate... it breeds negativity
conflict doesnt make anyone feel any better
its so easy to shoot off at someone when you are hidiing behind a screen
everyone on this forum needs to take a good hard look at themselves...
myself included sometimes
it just doesnt acheive anything
it just ruins a healthy debate... it breeds negativity
conflict doesnt make anyone feel any better
its so easy to shoot off at someone when you are hidiing behind a screen
Quote from HomoSalmon:
I'm regretting at all... always like a good exchange of ideas
According with my System's Theory teacher, we should be more concerned with stable state (final) result than with transition behaviour (at first glance). I know, in the long run we'll be all dead. But isn't the system behaviour more important than single steps it follow during its evolution, if this evolution is well described by system design?
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what the hell hahaha? that just breaks my brain hehe - but if i get your meaning, U say we are better of thinking long term - yeah well just remember that the biggest influence on economic regulation is politics. Their system is to serve whoever has the most power.
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You should explain better, because seems to me that more boom and bust is not inherently linked to more output.
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more effiency lead to more boom and bust due to increased dependancy. Boom and bust is a symptop, not a cause of increased output.
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Fairness is not my first concern, however it is high in my values ranking.
But I was applying a sistemic reasoning, my concern is that when the design of economic system counterbalance human defects (even partially) the whole system evolution could be more far from self-destruction.
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human defects find their way into all systems too. No escaping human defects.
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I feel deflation could be useful when inflation (we already had) move work (people efforts) from productive work to unproductive (parasite) work, from making something exchangeable (as in barter) to find a way to trade something at a price higher than its real value, often manipulating people psychology or currency value.
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haha parasite....lol......deflation is wonderful in that sense
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Maybe individual behaviour is not enough. Individual behaviour is extremely conditioned by other people behaviour, and by environment in which they move. The system: rules, convinctions, belief, traditions, customs, rites (starting point and inner laws of the system).
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the mob feeds the mob, but mobs begin with individuals....individualise yourself and thus you may influence others to do the same
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But think of this: if there is unemployment in US due to outsourcing to far-east, this is not an underperforming of whole system?
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that is not why there is unemployment. there is unemployment because there is a minimum wage and also people who do not wish to work (like me because I got better things to do with my life)
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Why lower wage output should not going to lower income people (ie far-east people) AND higher wage output isn't going to high wage people (US-citizens)?
The whole world output is far more when both workers work (more total output to subdivide) than allowing jobs move from rich to poor countries.
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wages do not equate with output but with supply and demand for that particular labourer. No, the whole world output is greater when we let things move where they will naturally.
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Why the system is so far from full employment? Is distance raising?
Why the system works in this irrational way?
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because the market is not free. Because it is regulated by incompetent loonies with rules and laws which do more harm than good.
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A better one? Who assure it? Past knowledge? Maybe we have to start from what we know? Maybe we have to understand better what we do? [/B]
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we are moving towards a global village. One world. One culture. One people. Yes better. But it might appear worse before it gets better.
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Please noone else reply to this msg