[The-Shoveler]

Robots,

or maybe they will hook us up Matrix like so we think we are living in shady acres retirement community,

Or

Retirement communes,

some combination of the above,

[The-Shoveler]

[quote=AN][quote=flu]Morale of the story…..borrow as much as you can at these ridiculous fixed term rates. Because in a few years this is gonna look cheap.[/quote]That’s the way I felt when the interest rate I get from a CD drop bellow 3%. It has been working well so far. Here’s to hope that we’ll see a repeat of 1970-80.[/quote]

1970-80 U.S.A. Cities looked more like Asia cities as far as smog an most people smoked (it was the cool thing to do) and people were expect to (and generally did) only live 1 or 2 maybe 5 years past retirement.
That would not be kind to the current crop of retirees so there is a lot of resistance right now to ANY!!! inflation.

But yea that is really the only way out baring a major flush down the toilet of the economy.

5-7% inflation is really fairly normal IMO.

[The-Shoveler]

End of QE ?
I think it depends on interest rates and/or the economy IMO.
If interest rates rise and crash what little recovery the housing market is happening then I think QE will be on again.
Could be interesting to watch.
If the housing crash starts again I think local Gov’s BK’s will be back in the news in a hurry big time.
Darned, if you do Darned if you don’t, kind of like coffin corner if you are familiar with aviation terms.

[The-Shoveler]

Well in this case I am talking about just my 401K money for the most part.
Could be my age making decisions for me here as well,
I would rather wait for a big decline (some type of Black swan thing) before jumping in than be in and see Iran on the news one morning before the market opens. Or some other event.
On Iran, what would be worse for the markets?
1) Iran were to one day announce they have nuclear capability and no longer will they be at the mercy of western powers,
2) Iran were to announce full on war after some kind of attack.

Pick your poison,

[The-Shoveler]

OK so now what !
I think we are sitting just about where we were last year at this time, same possible black swan’s still out there etc…
Don’t see a lot other than slow growth myself so I don’t see why everyone got so excited over this cliff deal.
Still on the side lines for now.

[The-Shoveler]

From my somewhat limited observations (just family members and a few friends)
The overweight people tend to be more sickly and see the doctors more often and have a lot harder time moving around (walking etc…) but seem to live about the same age as the more fit people who tend to just suddenly fall over dead one day after a life time of seemingly healthy living,
Pick your life style…

[The-Shoveler]

It would not take hyperinflation to resolve our debt, just 7-10% for 5 to 10 years.
(the above is a requirement for CalPers (and a lot of other plans) to continue to be funded BTW, repealing prop 13 may help for a few years but bottom line CalPers projects 7% return on income indefinitely into the future so you will eventually go BK anyway)

The Problem is that’s just not something a large part of the population transitioning to fixed income wants to hear. (Can you say Japan!!)

Interest rates, YES the Fed can control that even in the face of inflation IMO.
I think they have proved they can keep rates exactly where they want no matter what.

[The-Shoveler]

Sloppy code, too many bugs.
I would have introduced real warp drive much sooner. Also need a concept of life credits where you get to live longer (or better) the more life credits you collect.
Example need to be able to trade life credits for longer life or you could choose to spend them on say nice vacations etc…
Plus everyone should start at the same level or at least choose parents etc… I could go on..

[The-Shoveler]

[quote=flu]What the hell do you guys expect…Our government is encouraging this…They want more money so they can do this.. So they can avoid any sort of fiscal pain…Why is any of this so surprising to any of you?[/quote]

The only thing is they are missing the part where minimum wage goes to $15.00 an hour.
But I guess they can’t do that and claim there is no inflation.
I have always said you will never get a recovery until home prices are close to peak nominal price.
The sad thing is it did not have to be this way, but I can’t see how they did not plan it this way as it was so obvious what was going to happen.

The housing market version of Pump and Dump.

[The-Shoveler]

[quote=dumbrenter][quote=The-Shoveler][quote=dumbrenter][quote=The-Shoveler]Actually were doing about average as far as debt,
pretty much the whole world is in debt.

except china and a few other exceptions.

Automation and other Tech, will be a big equalizer in the end IMO.[/quote]

Again, if everyone is in debt, who and where are the creditors?
Anybody, Anybody other than the Chinese bogeyman for which the numbers don’t add up anyway?

And if other countries stop selling us stuff, doesn’t this mean our own economy will improve due to more manufacturing jobs? Somebody gotta make the stuff that goes for sale on WalMart.[/quote]

Yes my point, we will have to make our own stuff, but don’t count on me to put your shoes together LOL.

Actually the biggest buyer right now is our FED reserve, there are a lot of good things (ie… the debt can become a paper error at any point) and a lot of Bad things (ie… the foreign owners of our debt are dumping on the fed, actually I think this is also good).

To be honest I think the Chinese are really playing the same game internally, and I would look for them to step that up after these elections they just went through, who knows maybe in 5 years they will be in Debt TOOO!!! LOL.[/quote]

But the FED is made up of member banks which are rational profit making entities. Why would they want to keep buying debt that they know is becoming worthless soon?[/quote]

Not quite, The fed is a branch of the Gov,
The Federal Reserve is not a private bank it works for and is part of the U.S Gov., whatever profit it makes it must return to the USA treasury the first of every year.
If it wanted to it could buy all the outstanding T-notes (treasuries) and burn them essentially ending our debt.

[The-Shoveler]

[quote=dumbrenter][quote=The-Shoveler]Actually were doing about average as far as debt,
pretty much the whole world is in debt.

except china and a few other exceptions.

Automation and other Tech, will be a big equalizer in the end IMO.[/quote]

Again, if everyone is in debt, who and where are the creditors?
Anybody, Anybody other than the Chinese bogeyman for which the numbers don’t add up anyway?

And if other countries stop selling us stuff, doesn’t this mean our own economy will improve due to more manufacturing jobs? Somebody gotta make the stuff that goes for sale on WalMart.[/quote]

Yes my point, we will have to make our own stuff, but don’t count on me to put your shoes together LOL.

Actually the biggest buyer right now is our FED reserve, there are a lot of good things (ie… the debt can become a paper error at any point) and a lot of Bad things (ie… the foreign owners of our debt are dumping on the fed, actually I think this is also good).

To be honest I think the Chinese are really playing the same game internally, and I would look for them to step that up after these elections they just went through, who knows maybe in 5 years they will be in Debt TOOO!!! LOL.

[The-Shoveler]

Actually were doing about average as far as debt,
pretty much the whole world is in debt.

except china and a few other exceptions.

Automation and other Tech, will be a big equalizer in the end IMO.

[The-Shoveler]

[quote=dumbrenter][quote=livinincali][quote=The-Shoveler]Maybe that was why the posturing Ben was doing today, talking about the need to for easier lending standards,
Maybe a move to get additional funding.
Housing is all about credit markets (well and inflation).[/quote]

The problem is that all the growth in the economy for the past 20-30 years has come from increases in debt. If you back out the debt the economy has been shrinking. The entire goal of the fed is to trick people into taking on debt or at least spending every penny they have to grow the economy. 40-50 years ago growth came from saved capital, now it comes from debt. Now that the masses cannot or will not participate the leaders are getting desperate because they fully understand that all assets are priced in credit/debt. If that debt has to be liquidated then all the assets are going to fall in price,the big banks are going to go bankrupt and the masses are going to revolt because their retirement depends on that debt backed wealth. I.e. their retirement depends on their children and grand children to be obligated to produce them goods and services in the future. What better way that larding on student loan and government debt.

In essence people are holding wealth backed by debt and the debtors can’t pay in full so much of the wealth needs to be discounted. The big banks are playing a game of musical chairs in which they hope to be the one that isn’t holding the empty bag when the music stops. They are putting the taxpayer on the hook slowly over time. In my opinion the fed’s QE game is essentially a counterfeiting operation that has to walk the fine line between stimulating demand and not being detectable in prices. I.e. similar to somebody counterfeiting a million dollars in $5 bills and spending little bits here and there so that they don’t draw attention.[/quote]

That’s a pretty good explanation of wealth backed by debt, livinincali.
But if there is a debtor, there needs to be the counter-party creditor.
In this situation, who is the creditor? folks who buy the treasury bonds?
Is it the banks? The FED? Treasury? Foreign governments that peg their currency to dollar?

How are they going to react once they find out that there is very little for them to claim in terms of what they lent against (i.e. assets)?[/quote]

I am still waiting for the Chinese to stop selling us stuff.

Oh please Oh please,

It’s too painful for anyone to stop at least for the moment.

[The-Shoveler]

Glad I don’t need to move to the bay area.

Well good luck with that.

[The-Shoveler]

actually 13.5 billion is not too bad (almost a rounding error when we are talking trillions).

I was expecting much worse.

[Author]

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