[The-Shoveler]

The problem is …..

The math is not all that much different than the city of L.A. or the State for that matter. Maybe a peek inside the SD county coffers would show much the same as well.

without some serious cost cutting or inflation, the numbers are just not going to work for too much longer.

The Fed can print it’s own money, the states cannot..

[The-Shoveler]

For the “RECORD” .

I think that is a good call actually.
With the Euro thing going on and all.

[The-Shoveler]

When I look at this from someone who never took economics,
California is kind of like the worst of Greece and the worst of Spain and some of Japan put together.
Texas is like Germany (sort of).
With huge public debt (cities dropping left and right, state not much better). And 1/3 of all mortgage owners about 100K underwater on average (and yes most will not be walking away so forget it).
California desperately needs to monetize their Public and private debt, has a growing older population transitioning to fixed income and does not want inflation (Texas probably does not want to either)
what to do!! what to do!! .
I figure one day Ben will just lose it, sand up and say.
“Look we need to inflate out way out of this mess, were going to just print money until were blue in the face, get over it”

And from a over simplified point of view I am sure, “the Euro needs to die”, maybe just keep a free trade zone.

[The-Shoveler]

I loved the internet boom years !!
I was flying all over the world making presentations and hooking up equipment, It felt like I was part of something really really cool. Heck even my 401K was worth more than my house back then..

Yes those were the days, (where is Al Gore when you need him….:) just kidding,,

[The-Shoveler]

The housing bust takes out another one.
The math just does not work without some serious inflation.

[The-Shoveler]

I would say smart stimulus to create growth is a lot better than “Ripping the Bandage OFF!!” approach.
Less and lower wage Jobs does not really cure Debt or help to build or pay for infrastructure.

[The-Shoveler]

Also the labor in China is getting too expensive so from what the experts have been saying it is likely to move a lot closer to home (Mexico).

[The-Shoveler]

Yes China owns about 7% of all U.S.A. Debt, that is a lot.

Ok if we remove what the Fed owns (which is not really real debt since the service cost is zero), is closer to 10%

But it is growing so it is a problem that really needs to be addressed don’t get me wrong, it’s just not the end of the world just yet.

[The-Shoveler]

[quote=CA renter][quote=The-Shoveler]In short Japan did everything they could not to have inflation.[/quote]

Exactly. This is what made the deflationary period last so long, IMHO. If they had let it happen swiftly, all those Japanese savers would be in a better position today, IMO.

They also had deflation because of the enormous debt they carried. Debt is inflationary when it’s being incurred, but it’s deflationary in the future as the carrying costs eat away at the purchasing power of workers in the future.[/quote]

In the case of Japan’s government debt almost all of it is owned by its citizens, so the real carrying cost is almost zero.

It is almost the same with most of the recent U.S.A. debt incurred as almost of it is owned by the Fed. (Almost 6 trillion) and the carrying cost of that is “ZERO”.

Almost all the rest is owned by U.S.A. pension funds (again the real carrying cost of that is almost zero).

China has the most U.S.A. debt of any country at slightly more than one trillion (OK that has a real carrying cost).

[The-Shoveler]

Rates are very low historically.
But I don’t think rates will go up much until unemployment is where they (the fed) wants it (below 6% nationally).
I don’t’ see that happening until there are very few underwater home owners left.
Chicken/egg thing again.

[The-Shoveler]

In short Japan did everything they could not to have inflation.

[The-Shoveler]

The reason Japan had deflation for 20 years it’s that the majority of their citizen were older and or retired and transitioning to fixed income Plus the Japanizes are world class money savers.
The politicians were playing to that base.
Deflation only works for people on fixed income or who have a ton of cash in the bank.

[The-Shoveler]

[quote=ocrenter]Anyone know if we would at least get our money back from the big bust last night?[/quote]

Ha!

At least in TV we know how to put on a fireworks display!!
Just kidding.

[The-Shoveler]

When I was a twenty something, lift tickets were between 40 and 45 dollars (which was about 35% of my take home pay for the week), Bear mountain, summit and Wrightwood would routinely sell out, all the bottom chairs would take about 25-30 minutes to get through the line.
Now it’s about 60 -65 dollars and most of the chairs take 2-3 minutes to get through the line.
There are a lot less local skiers/boarders these days.

[The-Shoveler]

These days the younger generation plays video games for thrills, we used to have to go out and risk our lives (well ok maybe just serious injury) just so we could get a thrill.

Same with cars I think, need a speed thrill, just play a racing video game.
Very few teens and twenty something’s out on the slopes compared to my generation anyway.

[Author]

Posts