Topic: FINANCIAL COLLAPSE FEAR MONGERING NEEDS TO STOP - page 2. (Read 6258 times)

That applies to virtually every good sized economies and nations on earth.

So have you made up your mind now to defend the 1980 graph?  If so Do you geometric averaging and SHOW YOUR MATH, if you want to nitpick my visual graph reading estimate, which is if anything conservative.

The economy has already collapsed, you just haven't realized it yet.

That's because of the slow inflation that has been robbing people of purchasing power ever since the Federal Reserve was created. The only thing that has been preventing people from realizing it is the continual debasement of the dollar, and also technological advancements in productivity. Bpth of those forces happen slowly, so people do not realize it.

But, if you took what $20 bought in 1913 (the passing of the Federal Reserve act), and compared it to what $20 bought today, you would realize it.

Back in 1913, $20 bought a man a nice suit, a nice dinner, and a nice hotel room for the night. Try doing that with $20 today.

Of course, if you kept that $20 in gold from 1913, you would still be able to afford a nice suit, a nice dinner and a nice hotel room for the night.

Moral of the story? Gold does not lie, but Congress does, and fiat paper loses value.

Have a nice day.

The 1980 based graph actually corresponds to the facts much better than does the 1990 based graph.  It is also clearly averaging less than 9% annually.  I think some people are confused by a failure to understand integration, or the statistical mean, or geometric averaging.

I was clearly referring to the 1980-based graph you Twit.

If you want to defend the 1990-based graph as the truth then admit that the other graph is complete BS first.

Then it isn't working.  According to the Fed stats the velocity of money in the U.S. has plummeted under QE.

The more deceitful propaganda you consume, the more likely it becomes that your mind will be twisted, deformed and disabled. 

That is simply false:



That's ludicrous.  Perhaps the average salary has risen 40% but the average cost of living has gone up far more than the shadow stats numbers indicate.

It certainly does not jive with the reality I am experiencing.  If you will recall, we just went through a housing price collapse.  Yet my house is assessed almost exactly 2x higher than 14 years ago, having gone from 650 to 1280.   I could buy a pack of cigarettes for 1.80 in 2000, but now pay 14.  I could buy a gallon of gas for 1.2, but today paid 3.5.  My monthly utilities went from 45 to 160 in that time.  

Holding fiat is insanely self-destructive.  Yet the velocity of money plummets because everyone fears for their job, and everyone has so much debt that they live from paycheck-to-paycheck.  There's no slack.  My salary went from 60 to 300 during the past 13 years, and so kept up with inflation (barely) but most people I know have salaries between 1x and 2x what they earned in 2000.   This is clearly reflected in the Fed's GINI numbers.  The beneficiaries of QE largess are the very wealthy.  The vast majority of people see prices rising, and wages frozen, endagered by redundancy,

Good advice, although I would substitute "the more you are educated" with "the greater your understanding".

Core CPI in the US is misleading, it excludes volatile products like foodstuffs and gas.

Further core cpi is a composite of weighted items.

40% is too low. Gas was about 1.50$ in 2001.
It's around 4$ now.

That's around 200%. - Inline with shadow alternative stats.

Core CPI better measures something like a car. A 2002 m3 cost around 43k new - least options. now the coupe runs around 61. that's near 40%.

Personally, I tend to discount core cpi since those usually are capital purchases vs 'volatile things' you need day to day and do impact you.

Someone please correct my mistake please.

Yeah , same with people complaining about our food and how dangerous for our health junk food  is , how toxic the air is and god knows why life expectancy if growing year by year.
Also , In my country which was hit pretty hard in 2007-2010 we have the highest rate of newborns this century.

All you need to understand about an economy is that goods are paid for with goods, you cannot consume something without producing something first, if you want to eat you have to hunt or grow food, if you want to buy food you have to have first produced something to trade for the food, this is Say's law of markets. Money is a tool developed by the market as a way of assigning exchange values to goods so we don't have to barter, money derives its value from the goods you can exchange it for. If you accept this than all the economic schools of thought that rely on manipulation of money to produce wealth become nonsense and it helps to understand the real problems of the US economy. The US main problem is that it does not produce enough hence the trade deficits, this is because of high tax rates and excessive regulation making the US unable to compete with the rest of the global market, the persistent trade deficits mean that the US population have also been consuming too much, capital has been flowing out of the economy so the people have in fact been getting poorer, but what the government and the central bank have done is pump liquidity into the market to make up for the loss of capital in the economy, they have encouraged Americans to consume more despite the loss of capital and reduction of wealth, of course this is unsustainable and the problems will come to light when lenders realise America will never pay back it's debts of if it does it'll pay them back by printing money, but that money will have no value because the US doesn't produce anything anymore and money derives it value for the goods you can exchange it for.

http://www.pbs.org/newshour/making-sense/ben-bernanke-as-easter-bunny-why-the-fed-cant-prevent-the-coming-crash/

I look at the rate of broken families and single parent hood, aging population and low savings interest rates.
The difficulty in getting a job( Assuming baby boomers are not lying about how they walk from one job into another
at their lunch break).

That's all I need to know, that's all.

This isn't an explanation.

If individuals in the market wish to defer consumption until a later date, or wish to invest in businesses (perhaps interest from a functional lending bank rather than one addicted to cheap debt) why is that some kind of market failure?

Perhaps excess consumption and environmental catastrophe, as well as impending poverty in old age, is a consequence of this.

Keynsians have such a wacky interpretation of economics and the free market.

People that talk shit and bitch all day about looking forward to collapse of economies are no where to be found when things start looking up in a solid way.

It's just a pleb mentality of wanting to see their betters fall. Weak fucks.

People clearly delude themselves into believing what they want to believe too.  I was graduating High-school in 2001 and can assure you that the the $5 an hour jobs I had back then is not equivalent to a $15 an hour one now.  My last job was for $20 an hour and if ShadowStats was right I would have had the equivalent of ~$6.50 and would have seen only marginal increase in my standard of living, instead I could live in an apartment twice the size, eat lunch out every day and save money, at $5 I had to fight to keep any kind of roof over my head and eat mostly Ramen noodles.

You completely fail to understand the point about the housing bubble, housing obviously went up in price everyone knows that, but if Shadow is right about inflation then housing never had a BUBBLE because the rate of increase in housing would have been matched by ALL goods and their would be no relative change in the cost of houses.  But houses clearly were going up faster then OTHER stuff.

Have a look at these Debunkings, it looks like the ShadowStats creator may simply be making some really basic errors of math to create his BS numbers.

http://www.peakprosperity.com/forum/80408/shadowstats-inflation-closer-truth-cpi

And the simple analysis of the Housing bubble vs inflation

http://blog.jparsons.net/2011/03/shadow-stats-debunked-part-i.html

Yes, the tripled price sounds in 13 years sounds believable to me overall. The thing is, memory is a tricky thing and people get accustomed to circumstances and prices really quickly. Can I ask you how old you are? Have you earned your living expenses yourself in 2001 (if you do now)? If not, it's even easier to be deceived.

Take the stuff that gets cheaper each year because of "technical advance" reasons out of the equation - that stuff shouldn't even be in a basket! It's like nowadays inflation baskets consist of 3 flatscreen TVs and an iPhone...

Take rent, public transport, food instead. It's hard to believe, because people forget quickly (just like who lied to them before the last election), but it's very believable... Oh, and I can guarantee you a billion percent that shadowstats is WAY closer to the truth than official numbers. 2% or so!? Who could even remotely believe that?

In regards to housing - there you have it, as you say yourself, unbelievable inflation! That risen price already IS the inflation though, the market is pumped up by a money bubble. Basically, the MONEY is in a bubble, which creates all the other bubbles, with stocks, with goods, with houses... The difference between a house and a banana is just that you won't ever resell the banana anyways, it's eaten and gone (and houses are a special case in that regard as they can be resold without any significant reduction for price for you having used them, as opposed to, say, cars).

The Shadowstats statistics is not just some made up number by John Williams - it's just the governments own accounting, before they started to fake the numbers a little bit more each year. To claim that those numbers are not true means to claim that the government on purpose waaaaay overcalculated inflation during the 80ies - by 6% or so more than it actually was! Which is not in the government's best interest at all. It's certainly not how governments act.

Btw, inflation plays into many more economic calculations, which are all subsequently MASSIVELY tainted! Think of the GDP number, for example, or the P/E ratio, which tells us if the stock market is cheap or expensive: All faked by the means of inflation.

The numbers are sad, but they are true.

Ha ha ha, this, in combination with your OP, is a legendary post! Read it in the morning, burst out laughing and have been giggling all day long about it!

Props to you to be ready to see what's in front of your eyes.

No I simply asserted that is is ABSURD to say their prices for 'all consumer products in AGGREGATE' which is what CPI is measuring has averaged 9% for the last 13 years.  If I started going into the weeds I could certainly find A product that has tripled, something which has doubled, another which has dropped by half, I could show anything by anecdotes.  

It is in our common perception of the value of money and the average of prices that should be used to do a basic sanity check in the same way I would reject a claim that people have been getting 9% taller each year, because the extrapolated change over a time period that I personally experienced is FAR beyond what I would have failed to notice.  The official number sounds sane but it could easily be off by a whole percentage point, it is simply not rejected while the Shadow number is rejected.

Think of the implications of a 3 fold increase in aggregate prices, do you think a person who made $5 an hour in 2001 would have exactly the SAME standard of living as someone today making $15 cause that's what ShadowStats is saying.  Or take a look at house prices which everyone agrees were in a bubble when they were increasing around 9% a year, according to ShadowStats their was no Bubble, houses were just managing to hold their value during that period and before (during the 90's) they were becoming cheaper in a real sense.