[The-Shoveler]

You would think telling the EU and Russian’s to both pound sand would be the correct choice.

This is what happens when you give up your rights in exchange for being in the EU.

Not like people would stop coming to vacation or they could not write a better contract for the offshore rights,

What the heck maybe they plan to nationalize later anyway.

[The-Shoveler]

In California, the new homes are generally built to much high standards than the tract homes built from the 60’s to the 90’s.

Also there is generally much better work done on the lot preps then there were in the 60’s and 70’s.

Some old custom built and such are still a find however.

[The-Shoveler]

HOA for SFH’s was a really stupid Idea in the first place.

Alas it is almost impossible to find new housing without HOA’s.

[The-Shoveler]

[quote=SD Transplant]Another reality I caught in the media is that savings rates are low. Well, savings isn’t encouraged by our FED, the savers are punished.
– How did it work out for the folks that saved cash for a full 20% down payment for a house……not so well (specifically when looking at 2012 or 2013 data……). They will never catch up.
– Inflation……yeah, we know how that’s going

People may save in retirement like accounts, the rest of the cash if it still sits idle will buy a loaf of bread in another year. There isn’t a way for a regular consumer to win here. BORROW to the hilt is the name of the game….boom times here we go again “YES, it is diferent this time.”[/quote]

Would not surprise me, (in fact I am expecting) a Back to late 70’s, cash is trash environment.
If you look at china (and really most of the world besides maybe Europe) they are experiencing 10%+ inflation and they are scrambling for hard assets, the last place they want to park their money is in a CD.

[The-Shoveler]

Even retiree’s feeling nice and safe and secure in their DB pension plans could be in for a very rude awakening as well.
With a inflation adjustment cap between 2-5% depending on department/plan inflation of 7-10% could reduce a DB plan to a pittance in a decade,
Best to keep some type of biz going and never fully retire (well until they wheel you blabbering incoherently into the state nursing home).

On a lighter note.
For a city with annual revenue of 3.6 billion, a 26 billion pension short fall seems insurmountable,
No fear, inflation will save the city…

• In 2012-13, Los Angeles’s pension costs are expected to rise to $1.3 billion, or 18% of the city’s budgeted expenditures. In 2002-03, just 10 years ago, pension costs were only $157 million, or 3% of total expenditures.
• Over the last decade, pension costs have grown at an annual average growth rate of 25% and have outpaced spending growth for every major area of the city’s budget.
• In 2012-13, the city of Los Angeles is expected to spend up to 32 cents toward pension benefits for every dollar it spends on total payroll for its employees. Employees will pay 9 cents for every dollar of payroll.
• From 2003 to 2012, the total official funding ratio of the city’s pension plans declined from 99.7% to 77.2%. Correspondingly, the city’s officially-reported unfunded liability increased from $87 million to $9.4 billion, more than a 100-fold increase.
• The growth in the unfunded liability and declines in the funding ratio are largely attributable to investment returns falling below the rate pension plans assumed they would earn (on average 7.75% per annum, net of expenses, on a portfolio consisting largely of bonds and equities). Over the last 10 years, LACERS, LAFPP, and LADWP pension trust funds have earned compound annual rates of return of 6.46%, 6.68%, and 5.11%, respectively. Over the last five years, these return rates were 0.68%, 1.06%, and 1.47%, respectively.
• Using Moody’s investment return assumption (5.5%), the unfunded liabilities would nearly triple to $25.9 billion.

[The-Shoveler]

I was referring to the whole big blue ball.
Syria , Iran, Russia because of Syria , china because of NK,
what a mess, seem like 1980 all over.
Syria stepped over the thin line in the sand today.

[The-Shoveler]

[quote=The-Shoveler]
Yea I could see a small pull back, but not a major correction until inflation has a chance to take hold.
.[/quote]

Of course all bets are off if we end up in something resembling WWIII,

then nothing is off the table.

[The-Shoveler]

Yes that’s why they removed energy costs as well.

5-7% is more normal. 10% is just moderate for 90% of the world. An yes I did live through this and it was a lot more fun than the last 10 years.

[The-Shoveler]

The low inflation we have experienced since 1990 in not normal for the U.S.A.
It is mostly caused by not having minimum wage tied to any inflation gage and the change in 1981 to remove asset prices from CPI (you only need to rent, no one needs to own, well that is the thinking behind this change, you like it?).
Also China has helped to kill low skilled jobs and keep inflation artificially low (remember this is what we use to calculate 90% of inflation now),

[The-Shoveler]

Basically,

long live Homer Simpson

[The-Shoveler]

Most Americans live in the world I described.

[The-Shoveler]

Assuming you have more debt and leveraged assets than cash (ie.. you’re an average American).
Moderate inflation is not so bad. (my car I bought new was worth more the day I paid it off three years later than when I drove it off the lot in 1973).

[The-Shoveler]

I think that was a special case, but even then I think the inflation eventually made them whole.
As long as you limit the pension to only say 3% inflation adjustment, 7-9 percent inflation will make these issues disappear very fast.

[The-Shoveler]

I would say, yea really minimum wage needs to be about $15 right now (that would just be making up for inflation which is not tracked), it needs to be $15 and then tied to asset inflation as should all wages.
But I think it will be a slow transition.

Yea I could see a small pull back, but not a major correction until inflation has a chance to take hold.
The fed cannot continue to bail out the local gov’s
and the local Gov’s need inflation to bring the tax base up.

[The-Shoveler]

I respectfully disagree, while they could not stop the 50% drop they did prevent it from turning into a depression and they did know what they were doing and what would happen IMO.
I say no big crash until everyone is feeling really over confident and inflation brings local municipalities back above water (not going BK left and right) we are not there yet (IMHO anyway).

Also until this year Japan was cratering more to their older population that was transitioning to fixed income and would not tolerate ANY inflation.
That seems to have changed in a big way.

The move to $10.00 minimum wage is just the start, I think we will be at $15 dollars before 2020.

[Author]

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