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sobmaz
ParticipantThe “median” home price today is really really skewed by all the low end sales due to foreclosures and short sales. The median of today is a far cry from the median of yesterday.
As far as payments that are lower due to the Federal Reserve literally printing money to force 30 year rates down, a temporary anomaly and how many people are getting that full advantage?
Between the “median” and the interest rate issue, you are way out in left field already.
Oh, and my car. My car that is a better deal than 10 years ago? The car that requires gasoline that is 100% higher? The car that requires oil changes that are 130% higher? The car that has repair bills that are 100% higher? The car that my insurance company is taking me to the bank on? God forbid I need to take it into a body shop.
I could go on and on, tires are double, traffic fines triple, parking double. How many hotels now charge for parking? Went to Torrey Pines today, 10.00 to park the car.
Same with houses. The cost to maintain, roofing and general upkeep have skyrocketed at least 50% since 2000. Forget about property tax (the house I bought in n park in 1999 had a 3200 a year tax bill, someone buying it today would have a 8000 a year tax bill), heating, cooling and water.
Obviously you are doing better than 10 years ago but I certainly am not. 10 years ago I had assets of 100K and felt comfortable buying the house of my choice in the hood I wanted.
Today, I have assets of 700K and would not feel financially comfortable buying in the hood I wish.
Maybe that is because I am 10 years older and worry about old age or maybe 700K aint really much any more when all it is is enough to buy a house outright that still gives you a 800 a month property tax bill.
Participant[quote=pri_dk][quote=Scarlett]I am surprised nobody posted this yet:
[WSJ Article]
[/quote]Got halfway through and quit after it lost all credibility:
Or consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn’t discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?
Ha. Not according Uncle Sam. Using a piece of chicanery called “hedonics,” Uncle Sam calls this a price cut. His reasoning? You’re getting more for the money. Today’s $999 Mac is lighter, fancier and faster than last year’s $999 Mac. So the government calculates that the “real” price has actually fallen.
How’s that work in the real world? Try it. Go into your local Apple store and ask for 50% off thanks to hedonics.According the the logic above, today’s typical laptop computers should only cost a few dollars.
How about this? Go on eBay to get the the price of three year old computer and make a true “Apple to Apple” comparison (pardon the pun.)
Pro Tip: If you want to make an argument for inflation, don’t use computers as an example.[/quote]
I think the Author may not have used the best example.
We he is trying to say is we all know computers, tvs and all electronics have gone down in price but due to the magic of “hedonics”, according to the government, they have gone down more.
Virtually anything that has quality improvements has the effect of driving prices down, ACCORDING TO THE CPI Index.
Forget about computers, lets talk blenders. A blender 5 years ago at your local Wal-Mart was say….45.00, today it is 45.00. Now, according to logic, the inflation of blenders in the last 5 years was ZERO.
But now comes “Hedonics”. The blender 5 years ago has less features. The blender today has more features, it may even use less electricity.
The Government assigns value to all changes. So, even though the blender is 45 dollars today and 5 years ago, because of Hedonics, the government would publish information stating that the price of blenders have fallen say 20% in the last 5 years.
Again, it did not actually fall in price at the store, but the government concludes the blender today is better than the blender yesterday so hence they say it has decreased in price.
You can apply that methodology to computers as well.
The result is, when we get our inflation reports, the overall number seems shockingly low to us. The reason it is low is all these “price declines” in things that are actually the same price at the store are averaged into the CPIndex to make us believe inflation is under control.
TVs are about the same price as they were back in the 80s but because of “Hedonics” according to the US government prices are about 50% of what they were in the 80’s.
Why would the Government have any stake in understating inflation?
Well, if inflation was higher, the interest paid on the national debt would be higher. The annual increase to s.s. recipients would be higher, the increase to Federal retirees would be higher.
There are literally, Trillions of reasons for the Government to claim that the CPI is lower than it is.
Participant[quote=pri_dk][quote=Scarlett]I am surprised nobody posted this yet:
[WSJ Article]
[/quote]Got halfway through and quit after it lost all credibility:
Or consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn’t discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?
Ha. Not according Uncle Sam. Using a piece of chicanery called “hedonics,” Uncle Sam calls this a price cut. His reasoning? You’re getting more for the money. Today’s $999 Mac is lighter, fancier and faster than last year’s $999 Mac. So the government calculates that the “real” price has actually fallen.
How’s that work in the real world? Try it. Go into your local Apple store and ask for 50% off thanks to hedonics.According the the logic above, today’s typical laptop computers should only cost a few dollars.
How about this? Go on eBay to get the the price of three year old computer and make a true “Apple to Apple” comparison (pardon the pun.)
Pro Tip: If you want to make an argument for inflation, don’t use computers as an example.[/quote]
I think the Author may not have used the best example.
We he is trying to say is we all know computers, tvs and all electronics have gone down in price but due to the magic of “hedonics”, according to the government, they have gone down more.
Virtually anything that has quality improvements has the effect of driving prices down, ACCORDING TO THE CPI Index.
Forget about computers, lets talk blenders. A blender 5 years ago at your local Wal-Mart was say….45.00, today it is 45.00. Now, according to logic, the inflation of blenders in the last 5 years was ZERO.
But now comes “Hedonics”. The blender 5 years ago has less features. The blender today has more features, it may even use less electricity.
The Government assigns value to all changes. So, even though the blender is 45 dollars today and 5 years ago, because of Hedonics, the government would publish information stating that the price of blenders have fallen say 20% in the last 5 years.
Again, it did not actually fall in price at the store, but the government concludes the blender today is better than the blender yesterday so hence they say it has decreased in price.
You can apply that methodology to computers as well.
The result is, when we get our inflation reports, the overall number seems shockingly low to us. The reason it is low is all these “price declines” in things that are actually the same price at the store are averaged into the CPIndex to make us believe inflation is under control.
TVs are about the same price as they were back in the 80s but because of “Hedonics” according to the US government prices are about 50% of what they were in the 80’s.
Why would the Government have any stake in understating inflation?
Well, if inflation was higher, the interest paid on the national debt would be higher. The annual increase to s.s. recipients would be higher, the increase to Federal retirees would be higher.
There are literally, Trillions of reasons for the Government to claim that the CPI is lower than it is.
Participant[quote=pri_dk][quote=Scarlett]I am surprised nobody posted this yet:
[WSJ Article]
[/quote]Got halfway through and quit after it lost all credibility:
Or consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn’t discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?
Ha. Not according Uncle Sam. Using a piece of chicanery called “hedonics,” Uncle Sam calls this a price cut. His reasoning? You’re getting more for the money. Today’s $999 Mac is lighter, fancier and faster than last year’s $999 Mac. So the government calculates that the “real” price has actually fallen.
How’s that work in the real world? Try it. Go into your local Apple store and ask for 50% off thanks to hedonics.According the the logic above, today’s typical laptop computers should only cost a few dollars.
How about this? Go on eBay to get the the price of three year old computer and make a true “Apple to Apple” comparison (pardon the pun.)
Pro Tip: If you want to make an argument for inflation, don’t use computers as an example.[/quote]
I think the Author may not have used the best example.
We he is trying to say is we all know computers, tvs and all electronics have gone down in price but due to the magic of “hedonics”, according to the government, they have gone down more.
Virtually anything that has quality improvements has the effect of driving prices down, ACCORDING TO THE CPI Index.
Forget about computers, lets talk blenders. A blender 5 years ago at your local Wal-Mart was say….45.00, today it is 45.00. Now, according to logic, the inflation of blenders in the last 5 years was ZERO.
But now comes “Hedonics”. The blender 5 years ago has less features. The blender today has more features, it may even use less electricity.
The Government assigns value to all changes. So, even though the blender is 45 dollars today and 5 years ago, because of Hedonics, the government would publish information stating that the price of blenders have fallen say 20% in the last 5 years.
Again, it did not actually fall in price at the store, but the government concludes the blender today is better than the blender yesterday so hence they say it has decreased in price.
You can apply that methodology to computers as well.
The result is, when we get our inflation reports, the overall number seems shockingly low to us. The reason it is low is all these “price declines” in things that are actually the same price at the store are averaged into the CPIndex to make us believe inflation is under control.
TVs are about the same price as they were back in the 80s but because of “Hedonics” according to the US government prices are about 50% of what they were in the 80’s.
Why would the Government have any stake in understating inflation?
Well, if inflation was higher, the interest paid on the national debt would be higher. The annual increase to s.s. recipients would be higher, the increase to Federal retirees would be higher.
There are literally, Trillions of reasons for the Government to claim that the CPI is lower than it is.
Participant[quote=pri_dk][quote=Scarlett]I am surprised nobody posted this yet:
[WSJ Article]
[/quote]Got halfway through and quit after it lost all credibility:
Or consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn’t discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?
Ha. Not according Uncle Sam. Using a piece of chicanery called “hedonics,” Uncle Sam calls this a price cut. His reasoning? You’re getting more for the money. Today’s $999 Mac is lighter, fancier and faster than last year’s $999 Mac. So the government calculates that the “real” price has actually fallen.
How’s that work in the real world? Try it. Go into your local Apple store and ask for 50% off thanks to hedonics.According the the logic above, today’s typical laptop computers should only cost a few dollars.
How about this? Go on eBay to get the the price of three year old computer and make a true “Apple to Apple” comparison (pardon the pun.)
Pro Tip: If you want to make an argument for inflation, don’t use computers as an example.[/quote]
I think the Author may not have used the best example.
We he is trying to say is we all know computers, tvs and all electronics have gone down in price but due to the magic of “hedonics”, according to the government, they have gone down more.
Virtually anything that has quality improvements has the effect of driving prices down, ACCORDING TO THE CPI Index.
Forget about computers, lets talk blenders. A blender 5 years ago at your local Wal-Mart was say….45.00, today it is 45.00. Now, according to logic, the inflation of blenders in the last 5 years was ZERO.
But now comes “Hedonics”. The blender 5 years ago has less features. The blender today has more features, it may even use less electricity.
The Government assigns value to all changes. So, even though the blender is 45 dollars today and 5 years ago, because of Hedonics, the government would publish information stating that the price of blenders have fallen say 20% in the last 5 years.
Again, it did not actually fall in price at the store, but the government concludes the blender today is better than the blender yesterday so hence they say it has decreased in price.
You can apply that methodology to computers as well.
The result is, when we get our inflation reports, the overall number seems shockingly low to us. The reason it is low is all these “price declines” in things that are actually the same price at the store are averaged into the CPIndex to make us believe inflation is under control.
TVs are about the same price as they were back in the 80s but because of “Hedonics” according to the US government prices are about 50% of what they were in the 80’s.
Why would the Government have any stake in understating inflation?
Well, if inflation was higher, the interest paid on the national debt would be higher. The annual increase to s.s. recipients would be higher, the increase to Federal retirees would be higher.
There are literally, Trillions of reasons for the Government to claim that the CPI is lower than it is.
Participant[quote=pri_dk][quote=Scarlett]I am surprised nobody posted this yet:
[WSJ Article]
[/quote]Got halfway through and quit after it lost all credibility:
Or consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn’t discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?
Ha. Not according Uncle Sam. Using a piece of chicanery called “hedonics,” Uncle Sam calls this a price cut. His reasoning? You’re getting more for the money. Today’s $999 Mac is lighter, fancier and faster than last year’s $999 Mac. So the government calculates that the “real” price has actually fallen.
How’s that work in the real world? Try it. Go into your local Apple store and ask for 50% off thanks to hedonics.According the the logic above, today’s typical laptop computers should only cost a few dollars.
How about this? Go on eBay to get the the price of three year old computer and make a true “Apple to Apple” comparison (pardon the pun.)
Pro Tip: If you want to make an argument for inflation, don’t use computers as an example.[/quote]
I think the Author may not have used the best example.
We he is trying to say is we all know computers, tvs and all electronics have gone down in price but due to the magic of “hedonics”, according to the government, they have gone down more.
Virtually anything that has quality improvements has the effect of driving prices down, ACCORDING TO THE CPI Index.
Forget about computers, lets talk blenders. A blender 5 years ago at your local Wal-Mart was say….45.00, today it is 45.00. Now, according to logic, the inflation of blenders in the last 5 years was ZERO.
But now comes “Hedonics”. The blender 5 years ago has less features. The blender today has more features, it may even use less electricity.
The Government assigns value to all changes. So, even though the blender is 45 dollars today and 5 years ago, because of Hedonics, the government would publish information stating that the price of blenders have fallen say 20% in the last 5 years.
Again, it did not actually fall in price at the store, but the government concludes the blender today is better than the blender yesterday so hence they say it has decreased in price.
You can apply that methodology to computers as well.
The result is, when we get our inflation reports, the overall number seems shockingly low to us. The reason it is low is all these “price declines” in things that are actually the same price at the store are averaged into the CPIndex to make us believe inflation is under control.
TVs are about the same price as they were back in the 80s but because of “Hedonics” according to the US government prices are about 50% of what they were in the 80’s.
Why would the Government have any stake in understating inflation?
Well, if inflation was higher, the interest paid on the national debt would be higher. The annual increase to s.s. recipients would be higher, the increase to Federal retirees would be higher.
There are literally, Trillions of reasons for the Government to claim that the CPI is lower than it is.
ParticipantIt is not about Wal-Mart or Home Depot raising prices it is about your dollar being worth less.
Gold is not up, the value of your dollar is down so it takes more dollars to buy the same gold.
When you hear the terms Quantitative easing spouted by the FED just remember it is another term for PRINTING MONEY.
Those with savings are being robbed blind, those with massive debts, like the Federal Government are making out like bandits. Banks are doing pretty good too. Money lent to banks at zero percent is lent to the public for 5 to 23 percent. And the looming inflation will help the banks with their realestate, eventually.
If you have wealth, don’t keep it in cash.
ParticipantIt is not about Wal-Mart or Home Depot raising prices it is about your dollar being worth less.
Gold is not up, the value of your dollar is down so it takes more dollars to buy the same gold.
When you hear the terms Quantitative easing spouted by the FED just remember it is another term for PRINTING MONEY.
Those with savings are being robbed blind, those with massive debts, like the Federal Government are making out like bandits. Banks are doing pretty good too. Money lent to banks at zero percent is lent to the public for 5 to 23 percent. And the looming inflation will help the banks with their realestate, eventually.
If you have wealth, don’t keep it in cash.
ParticipantIt is not about Wal-Mart or Home Depot raising prices it is about your dollar being worth less.
Gold is not up, the value of your dollar is down so it takes more dollars to buy the same gold.
When you hear the terms Quantitative easing spouted by the FED just remember it is another term for PRINTING MONEY.
Those with savings are being robbed blind, those with massive debts, like the Federal Government are making out like bandits. Banks are doing pretty good too. Money lent to banks at zero percent is lent to the public for 5 to 23 percent. And the looming inflation will help the banks with their realestate, eventually.
If you have wealth, don’t keep it in cash.
ParticipantIt is not about Wal-Mart or Home Depot raising prices it is about your dollar being worth less.
Gold is not up, the value of your dollar is down so it takes more dollars to buy the same gold.
When you hear the terms Quantitative easing spouted by the FED just remember it is another term for PRINTING MONEY.
Those with savings are being robbed blind, those with massive debts, like the Federal Government are making out like bandits. Banks are doing pretty good too. Money lent to banks at zero percent is lent to the public for 5 to 23 percent. And the looming inflation will help the banks with their realestate, eventually.
If you have wealth, don’t keep it in cash.
ParticipantIt is not about Wal-Mart or Home Depot raising prices it is about your dollar being worth less.
Gold is not up, the value of your dollar is down so it takes more dollars to buy the same gold.
When you hear the terms Quantitative easing spouted by the FED just remember it is another term for PRINTING MONEY.
Those with savings are being robbed blind, those with massive debts, like the Federal Government are making out like bandits. Banks are doing pretty good too. Money lent to banks at zero percent is lent to the public for 5 to 23 percent. And the looming inflation will help the banks with their realestate, eventually.
If you have wealth, don’t keep it in cash.
Participant[quote=briansd1]Sure, Dennis sees the writing on the wall; and he does care about the people.
But does he care about the people of the today or the people of the future? It makes a difference because the people of today need to cut back so that the people of the future may live better.
Any credit system is based on front loading the present and borrowing from the future. As long as that works, we will borrow more and more from the future until the system collapses. Who knows when that time will come?
Dennis wants us to live sustainably. Even if he’s successful in convincing Americans, it won’t last long. If Americans didn’t have access to easy credit, our standard of living (the products and services we can purchase) would quickly drop. Soon, other countries where credit is widely available (because not all countries would follow the Kucinich model) would surpass us and we would wonder what’s wrong with our political system.
My prediction is that when the current credit-based regime collapses, another one will takes its place. The power players will be different.
The mortgage business is a good illustration. If mortgage were extremely hard to get, people would live “in poverty”, more simply, in small houses. The economy would not be as strong because all the jobs to support housing would not exist.
Households would save to payoff their houses and future generations would not inherit debts. Over the long run (hundreds of years), that’s a better system.
But who is willing to make the sacrifices today for a future they will never live to see?[/quote]
Wow…..
Spot on and well said.
Participant[quote=briansd1]Sure, Dennis sees the writing on the wall; and he does care about the people.
But does he care about the people of the today or the people of the future? It makes a difference because the people of today need to cut back so that the people of the future may live better.
Any credit system is based on front loading the present and borrowing from the future. As long as that works, we will borrow more and more from the future until the system collapses. Who knows when that time will come?
Dennis wants us to live sustainably. Even if he’s successful in convincing Americans, it won’t last long. If Americans didn’t have access to easy credit, our standard of living (the products and services we can purchase) would quickly drop. Soon, other countries where credit is widely available (because not all countries would follow the Kucinich model) would surpass us and we would wonder what’s wrong with our political system.
My prediction is that when the current credit-based regime collapses, another one will takes its place. The power players will be different.
The mortgage business is a good illustration. If mortgage were extremely hard to get, people would live “in poverty”, more simply, in small houses. The economy would not be as strong because all the jobs to support housing would not exist.
Households would save to payoff their houses and future generations would not inherit debts. Over the long run (hundreds of years), that’s a better system.
But who is willing to make the sacrifices today for a future they will never live to see?[/quote]
Wow…..
Spot on and well said.
Participant[quote=briansd1]Sure, Dennis sees the writing on the wall; and he does care about the people.
But does he care about the people of the today or the people of the future? It makes a difference because the people of today need to cut back so that the people of the future may live better.
Any credit system is based on front loading the present and borrowing from the future. As long as that works, we will borrow more and more from the future until the system collapses. Who knows when that time will come?
Dennis wants us to live sustainably. Even if he’s successful in convincing Americans, it won’t last long. If Americans didn’t have access to easy credit, our standard of living (the products and services we can purchase) would quickly drop. Soon, other countries where credit is widely available (because not all countries would follow the Kucinich model) would surpass us and we would wonder what’s wrong with our political system.
My prediction is that when the current credit-based regime collapses, another one will takes its place. The power players will be different.
The mortgage business is a good illustration. If mortgage were extremely hard to get, people would live “in poverty”, more simply, in small houses. The economy would not be as strong because all the jobs to support housing would not exist.
Households would save to payoff their houses and future generations would not inherit debts. Over the long run (hundreds of years), that’s a better system.
But who is willing to make the sacrifices today for a future they will never live to see?[/quote]
Wow…..
Spot on and well said.
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