[sobmaz]

I want to live in your world where prices have fallen 20 to 30%.

Social security recipients must really be living high on the hog!

I have seen increases of at least 20% on my utility bills (per unit) since 2007, I have seen my true cost of using my health insurance increase by 2 to 400%. Yes, when your copay was 5. and goes to 20 that is 400%. Or your copay for a hospital stay goes from 200 to 1000, that is 500%. My rent has been 2100 a month for 2 years, that ain’t down.

Yes, I keep hearing about “falling rents” but they are statistically minuscule, especially when I look around here in San Diego and realize the cost of moving would eat up 7 years worth of rent savings.

Now yes, I have seen 20 to 50% reductions in consumer items, consumer items that don’t last like they use to but most of my money goes towards those items that have increased more.

I am not saying rampant inflation is the immediate concern. I am saying the fed has got people talking so much about “deflation”, they have people believeing a 30 year bond that pays just over 3% is a fair price because they believe long term deflation is an actual concern. In other words, the “fear of delfation” is a big fat joke as deflation would be the best thing that happened to Americans who are savers.

Those who set themselves up, investment wise, for deflation have done well from 2007 to 2009 and poorly since march of 2009. It is going forward that counts and I think that going forward you need to have your head examined if you were to buy a 30year bond that pays 3%.

Inflation has been the rule for this government since 1902 and it will remain the rule. THe deflation of the early 1930s and the short bout of deflation we HAD recently, were flukes.

[sobmaz]

I want to live in your world where prices have fallen 20 to 30%.

Social security recipients must really be living high on the hog!

I have seen increases of at least 20% on my utility bills (per unit) since 2007, I have seen my true cost of using my health insurance increase by 2 to 400%. Yes, when your copay was 5. and goes to 20 that is 400%. Or your copay for a hospital stay goes from 200 to 1000, that is 500%. My rent has been 2100 a month for 2 years, that ain’t down.

Yes, I keep hearing about “falling rents” but they are statistically minuscule, especially when I look around here in San Diego and realize the cost of moving would eat up 7 years worth of rent savings.

Now yes, I have seen 20 to 50% reductions in consumer items, consumer items that don’t last like they use to but most of my money goes towards those items that have increased more.

I am not saying rampant inflation is the immediate concern. I am saying the fed has got people talking so much about “deflation”, they have people believeing a 30 year bond that pays just over 3% is a fair price because they believe long term deflation is an actual concern. In other words, the “fear of delfation” is a big fat joke as deflation would be the best thing that happened to Americans who are savers.

Those who set themselves up, investment wise, for deflation have done well from 2007 to 2009 and poorly since march of 2009. It is going forward that counts and I think that going forward you need to have your head examined if you were to buy a 30year bond that pays 3%.

Inflation has been the rule for this government since 1902 and it will remain the rule. THe deflation of the early 1930s and the short bout of deflation we HAD recently, were flukes.

[sobmaz]

I find it interesting how so many people think we have more of a deflation problem than an inflation problem.

First, housing and stocks have nothing to do with the CPI. The government did not take housing and stocks into account when things were rising so it is reasonable to accept the fact that they don’t when these asset prices are falling.

Think about the things you NEED and things you may not need. Medicine, energy, utilities, insurance co pays, haircuts, movies. It seems to me everything is rising, except those things you buy at the big box stores.

Now, lets talk about that fan I bought from Target. That fan cost 50.00 30 years ago and today it costs 25.00 plus it has all these neat features the fan from 30 years ago did not have.

You can bet those neat features were captured as a reduction in price via a method called “hedonics”. So according to the CPI the fan fell in price due to improvements and due to the price itself.

The CPI does not capture the fact that the fan that cost 50.00 30 years ago lasted 20 years, nor does it capture the fact that the fan for 25.00 only lasts about a year.

You can apply this example to just about all consumer items, you get crap that does not last.

The CPI does not capture “fees”, fees that did not use to exist. Fees like overweight luggage or fees for having a pillow on the air plane.

Only a fool would believe the CPI.

Hedonics allow for the following. A computer costs 1000.00 today. Next year that computer remains at 1000.00 yet the computing capacity increases by 100%. Via the wonderful world of hedonics that computer , according to the CPI, shows a 50% reduction in price.

These hedonic calculations offset the increases that we are all aware of and like magic the CPI is tame yet you wonder why it gets harder and harder to make ends meet.

[sobmaz]

I find it interesting how so many people think we have more of a deflation problem than an inflation problem.

First, housing and stocks have nothing to do with the CPI. The government did not take housing and stocks into account when things were rising so it is reasonable to accept the fact that they don’t when these asset prices are falling.

Think about the things you NEED and things you may not need. Medicine, energy, utilities, insurance co pays, haircuts, movies. It seems to me everything is rising, except those things you buy at the big box stores.

Now, lets talk about that fan I bought from Target. That fan cost 50.00 30 years ago and today it costs 25.00 plus it has all these neat features the fan from 30 years ago did not have.

You can bet those neat features were captured as a reduction in price via a method called “hedonics”. So according to the CPI the fan fell in price due to improvements and due to the price itself.

The CPI does not capture the fact that the fan that cost 50.00 30 years ago lasted 20 years, nor does it capture the fact that the fan for 25.00 only lasts about a year.

You can apply this example to just about all consumer items, you get crap that does not last.

The CPI does not capture “fees”, fees that did not use to exist. Fees like overweight luggage or fees for having a pillow on the air plane.

Only a fool would believe the CPI.

Hedonics allow for the following. A computer costs 1000.00 today. Next year that computer remains at 1000.00 yet the computing capacity increases by 100%. Via the wonderful world of hedonics that computer , according to the CPI, shows a 50% reduction in price.

These hedonic calculations offset the increases that we are all aware of and like magic the CPI is tame yet you wonder why it gets harder and harder to make ends meet.

[sobmaz]

I find it interesting how so many people think we have more of a deflation problem than an inflation problem.

First, housing and stocks have nothing to do with the CPI. The government did not take housing and stocks into account when things were rising so it is reasonable to accept the fact that they don’t when these asset prices are falling.

Think about the things you NEED and things you may not need. Medicine, energy, utilities, insurance co pays, haircuts, movies. It seems to me everything is rising, except those things you buy at the big box stores.

Now, lets talk about that fan I bought from Target. That fan cost 50.00 30 years ago and today it costs 25.00 plus it has all these neat features the fan from 30 years ago did not have.

You can bet those neat features were captured as a reduction in price via a method called “hedonics”. So according to the CPI the fan fell in price due to improvements and due to the price itself.

The CPI does not capture the fact that the fan that cost 50.00 30 years ago lasted 20 years, nor does it capture the fact that the fan for 25.00 only lasts about a year.

You can apply this example to just about all consumer items, you get crap that does not last.

The CPI does not capture “fees”, fees that did not use to exist. Fees like overweight luggage or fees for having a pillow on the air plane.

Only a fool would believe the CPI.

Hedonics allow for the following. A computer costs 1000.00 today. Next year that computer remains at 1000.00 yet the computing capacity increases by 100%. Via the wonderful world of hedonics that computer , according to the CPI, shows a 50% reduction in price.

These hedonic calculations offset the increases that we are all aware of and like magic the CPI is tame yet you wonder why it gets harder and harder to make ends meet.

[sobmaz]

I find it interesting how so many people think we have more of a deflation problem than an inflation problem.

First, housing and stocks have nothing to do with the CPI. The government did not take housing and stocks into account when things were rising so it is reasonable to accept the fact that they don’t when these asset prices are falling.

Think about the things you NEED and things you may not need. Medicine, energy, utilities, insurance co pays, haircuts, movies. It seems to me everything is rising, except those things you buy at the big box stores.

Now, lets talk about that fan I bought from Target. That fan cost 50.00 30 years ago and today it costs 25.00 plus it has all these neat features the fan from 30 years ago did not have.

You can bet those neat features were captured as a reduction in price via a method called “hedonics”. So according to the CPI the fan fell in price due to improvements and due to the price itself.

The CPI does not capture the fact that the fan that cost 50.00 30 years ago lasted 20 years, nor does it capture the fact that the fan for 25.00 only lasts about a year.

You can apply this example to just about all consumer items, you get crap that does not last.

The CPI does not capture “fees”, fees that did not use to exist. Fees like overweight luggage or fees for having a pillow on the air plane.

Only a fool would believe the CPI.

Hedonics allow for the following. A computer costs 1000.00 today. Next year that computer remains at 1000.00 yet the computing capacity increases by 100%. Via the wonderful world of hedonics that computer , according to the CPI, shows a 50% reduction in price.

These hedonic calculations offset the increases that we are all aware of and like magic the CPI is tame yet you wonder why it gets harder and harder to make ends meet.

[sobmaz]

I find it interesting how so many people think we have more of a deflation problem than an inflation problem.

First, housing and stocks have nothing to do with the CPI. The government did not take housing and stocks into account when things were rising so it is reasonable to accept the fact that they don’t when these asset prices are falling.

Think about the things you NEED and things you may not need. Medicine, energy, utilities, insurance co pays, haircuts, movies. It seems to me everything is rising, except those things you buy at the big box stores.

Now, lets talk about that fan I bought from Target. That fan cost 50.00 30 years ago and today it costs 25.00 plus it has all these neat features the fan from 30 years ago did not have.

You can bet those neat features were captured as a reduction in price via a method called “hedonics”. So according to the CPI the fan fell in price due to improvements and due to the price itself.

The CPI does not capture the fact that the fan that cost 50.00 30 years ago lasted 20 years, nor does it capture the fact that the fan for 25.00 only lasts about a year.

You can apply this example to just about all consumer items, you get crap that does not last.

The CPI does not capture “fees”, fees that did not use to exist. Fees like overweight luggage or fees for having a pillow on the air plane.

Only a fool would believe the CPI.

Hedonics allow for the following. A computer costs 1000.00 today. Next year that computer remains at 1000.00 yet the computing capacity increases by 100%. Via the wonderful world of hedonics that computer , according to the CPI, shows a 50% reduction in price.

These hedonic calculations offset the increases that we are all aware of and like magic the CPI is tame yet you wonder why it gets harder and harder to make ends meet.

[sobmaz]

Welcome to the War Zone!

The Fed declared war on savers about 2 years ago. Those that made good decisions and have savings to show for it are being asked to accept below normal yields (actually, no yield) so that the banks can rebuild their balance sheets and so that those who borrowed more than they could really afford can now afford it due to the lower rates.

Your money is WORTHLESS in cash form and that is how the Fed likes it.

You have three choices, gamble in the stock market or gamble in the housing market. The third is to move away from bubble land for a few years and use your money to live rent free.

I have been sitting on 550K for 2 years now while forking over 2100 a month in rent while earning about 300 a month in interest.

From what I calculate house prices need to fall about 10K a year just to make up the difference between what I am paying in rent versus what it would cost to own (true cost).

I may be forced to move to a place like Phoenix and just buy a nice home in a nice part of town for 150K cash and then come back in 5 years after this has all been sorted out. Being that I have the mobility to do so it wouldn’t be the worst fate.

[sobmaz]

Welcome to the War Zone!

The Fed declared war on savers about 2 years ago. Those that made good decisions and have savings to show for it are being asked to accept below normal yields (actually, no yield) so that the banks can rebuild their balance sheets and so that those who borrowed more than they could really afford can now afford it due to the lower rates.

Your money is WORTHLESS in cash form and that is how the Fed likes it.

You have three choices, gamble in the stock market or gamble in the housing market. The third is to move away from bubble land for a few years and use your money to live rent free.

I have been sitting on 550K for 2 years now while forking over 2100 a month in rent while earning about 300 a month in interest.

From what I calculate house prices need to fall about 10K a year just to make up the difference between what I am paying in rent versus what it would cost to own (true cost).

I may be forced to move to a place like Phoenix and just buy a nice home in a nice part of town for 150K cash and then come back in 5 years after this has all been sorted out. Being that I have the mobility to do so it wouldn’t be the worst fate.

[sobmaz]

Welcome to the War Zone!

The Fed declared war on savers about 2 years ago. Those that made good decisions and have savings to show for it are being asked to accept below normal yields (actually, no yield) so that the banks can rebuild their balance sheets and so that those who borrowed more than they could really afford can now afford it due to the lower rates.

Your money is WORTHLESS in cash form and that is how the Fed likes it.

You have three choices, gamble in the stock market or gamble in the housing market. The third is to move away from bubble land for a few years and use your money to live rent free.

I have been sitting on 550K for 2 years now while forking over 2100 a month in rent while earning about 300 a month in interest.

From what I calculate house prices need to fall about 10K a year just to make up the difference between what I am paying in rent versus what it would cost to own (true cost).

I may be forced to move to a place like Phoenix and just buy a nice home in a nice part of town for 150K cash and then come back in 5 years after this has all been sorted out. Being that I have the mobility to do so it wouldn’t be the worst fate.

[sobmaz]

Welcome to the War Zone!

The Fed declared war on savers about 2 years ago. Those that made good decisions and have savings to show for it are being asked to accept below normal yields (actually, no yield) so that the banks can rebuild their balance sheets and so that those who borrowed more than they could really afford can now afford it due to the lower rates.

Your money is WORTHLESS in cash form and that is how the Fed likes it.

You have three choices, gamble in the stock market or gamble in the housing market. The third is to move away from bubble land for a few years and use your money to live rent free.

I have been sitting on 550K for 2 years now while forking over 2100 a month in rent while earning about 300 a month in interest.

From what I calculate house prices need to fall about 10K a year just to make up the difference between what I am paying in rent versus what it would cost to own (true cost).

I may be forced to move to a place like Phoenix and just buy a nice home in a nice part of town for 150K cash and then come back in 5 years after this has all been sorted out. Being that I have the mobility to do so it wouldn’t be the worst fate.

[sobmaz]

Welcome to the War Zone!

The Fed declared war on savers about 2 years ago. Those that made good decisions and have savings to show for it are being asked to accept below normal yields (actually, no yield) so that the banks can rebuild their balance sheets and so that those who borrowed more than they could really afford can now afford it due to the lower rates.

Your money is WORTHLESS in cash form and that is how the Fed likes it.

You have three choices, gamble in the stock market or gamble in the housing market. The third is to move away from bubble land for a few years and use your money to live rent free.

I have been sitting on 550K for 2 years now while forking over 2100 a month in rent while earning about 300 a month in interest.

From what I calculate house prices need to fall about 10K a year just to make up the difference between what I am paying in rent versus what it would cost to own (true cost).

I may be forced to move to a place like Phoenix and just buy a nice home in a nice part of town for 150K cash and then come back in 5 years after this has all been sorted out. Being that I have the mobility to do so it wouldn’t be the worst fate.

[sobmaz]

“Gold pays no interest”

That is the stupidest thing I have ever heard. Gold does not need to pay interest, it retains its value over time.

A dollar in 1908 will buy you what 50.00 today will buy you. Dollars pay interest only to make up for the erosion of its value.

An ounce of gold in 1908 will buy about the same amount of goods of services as an ounce of Gold today.

GOld is a STORE of value, not an investment. An investment would be my first choice, not Gold. But…..Gold would be my first choice as a STORE OF VALUE if my second choice was a u.s. dollar.

Think about it….would you want to STORE your money in money that can be printed by the billions daily or in an ounce of Gold that takes a lot of resources to create?

Being that the u.s. has promised mountains of dollars to everyone and is already in debt, my first choice is my wealth in an investment that will weather the economic meltdown. On the other hand, any uninvested cash I have I would much rather store in gold than in dollars.

[sobmaz]

“Gold pays no interest”

That is the stupidest thing I have ever heard. Gold does not need to pay interest, it retains its value over time.

A dollar in 1908 will buy you what 50.00 today will buy you. Dollars pay interest only to make up for the erosion of its value.

An ounce of gold in 1908 will buy about the same amount of goods of services as an ounce of Gold today.

GOld is a STORE of value, not an investment. An investment would be my first choice, not Gold. But…..Gold would be my first choice as a STORE OF VALUE if my second choice was a u.s. dollar.

Think about it….would you want to STORE your money in money that can be printed by the billions daily or in an ounce of Gold that takes a lot of resources to create?

Being that the u.s. has promised mountains of dollars to everyone and is already in debt, my first choice is my wealth in an investment that will weather the economic meltdown. On the other hand, any uninvested cash I have I would much rather store in gold than in dollars.

[sobmaz]

“Gold pays no interest”

That is the stupidest thing I have ever heard. Gold does not need to pay interest, it retains its value over time.

A dollar in 1908 will buy you what 50.00 today will buy you. Dollars pay interest only to make up for the erosion of its value.

An ounce of gold in 1908 will buy about the same amount of goods of services as an ounce of Gold today.

GOld is a STORE of value, not an investment. An investment would be my first choice, not Gold. But…..Gold would be my first choice as a STORE OF VALUE if my second choice was a u.s. dollar.

Think about it….would you want to STORE your money in money that can be printed by the billions daily or in an ounce of Gold that takes a lot of resources to create?

Being that the u.s. has promised mountains of dollars to everyone and is already in debt, my first choice is my wealth in an investment that will weather the economic meltdown. On the other hand, any uninvested cash I have I would much rather store in gold than in dollars.

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