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Thread: Inflation on the rise? Market says not so much

  1. #41
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by Voltaire X View Post
    Median wage levels are at the same level they were in the mid 1990s. Inflation hasn't stopped since then. The middle and lower classes are getting screwed over. Wages for most people aren't rising with the cost of living.
    Median wage levels have risen at nearly the same rate as inflation. Most likely the figures that you are citing were already adjusted for inflation. Do you have a link to your source?

    It is accurate though that the median per family income has dropped during the past 5 years. Thats not really a reflection of declining wages as much as it is of unemployment and the reduction in the number of two income earner families.

    But I do agree that the middle and lower classes are getting screwed, because while their incomes have stagnated, the incomes of the top 1% have skyrocket. I recently read that if all increases in per capita GDP would have been distributed equally across all income levels, that the median income today would be something like $80k.

  2. #42
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by hikari View Post
    Yes, they are getting screwed but it has a lot less to do with inflation than it does globalization. The ruling class has an easier time exploiting the American working class by exposing them more directly to competition from the third world, this has allowed wages to remain stagnant after all why pay people in Michigan a dime more if you could save money by sending that job elsewhere.

    If we go down a path of Keynesian economics again, which I think we will, we will probably live with a moderate amount of inflation, and the ruling class wanting to maximize profit will make no moves to do things like peg minimum wage to inflation (which is a very good idea imo) so it will continue that wages will sink till congress needs a boost.

    The thing that has changed really is that NAFTA and all the other pro globalization legislation were touted as things good for us, they were not.
    I agree that outsourcing jobs is one of the reasons that middle and lower incomes have not kept pace with the top few percent of income earners, and I agree that we will likey go down the Keynsian path before our economy improves, but I don't expect Keynsian economic policy will cause much inflation over the feds target rate. During times of high unemployment and low production utilization, inflation can only happen if there is an external factor like the oil crises of the '70's and early '80's.

    Even if the gov started sending out $1000 checks to every American, we likely wouldn't see much inflation because our businesses have the un-utilized capacity to produce more products. It would take some absurd amount of Keynsian stimulous to produce inflation over the feds target rate.

  3. #43
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by KevinKohler View Post
    And simply keeping my money in the bank is unwise?


    Do you realize how that sounds?
    Not only is it unwise, it's just plain STUPID when banks are paying you an interest rate less than the inflation rate (which is what always happens in any economy).

    Yes, I realize how it sounds. Putting money into a savings account is not investing, it's saving.

    When one saves, one loses a little bit of his savings every day that passes. It's always been like that. When cavemen tried to save meat, the maggets ate a little of it, and eventually it became uneatable. When farmers tried to save grain, the rats consumed a little every day. When cavemen tried to save water, it evaporated. The only type of savings that has been relatively free from loss was when we saved gold and silver and copper - and even then, if you try to hide it long enough, someone is eventually going to find it and steal it. But if you want to try your luck against the maggots, rats, and thieves, you are perfectly welcome to convert your cash into meat, grain, or gold.

  4. #44
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by Arbo View Post
    He's never about reality.
    Have you EVER added anything of value to a topic? Ever?

  5. #45
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by AdamT View Post
    Mild inflation is certainly better than deflation, and because it's unlrealistic to expect 0% inflation, mild inflation is generally what we target. As a rule salaries tend to track inflation as long as it isn't unusually high.

    If you were really thinking about the future you would invest your money and not stick it in a bank earning essentially zero interest.
    Make sure you deliver that message to my parents, who lost the bulk of their savings in 401Ks when the stock market crashed. Right before they were due to retire.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

  6. #46
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by imagep View Post
    Not only is it unwise, it's just plain STUPID when banks are paying you an interest rate less than the inflation rate (which is what always happens in any economy).

    Yes, I realize how it sounds. Putting money into a savings account is not investing, it's saving.

    When one saves, one loses a little bit of his savings every day that passes. It's always been like that. When cavemen tried to save meat, the maggets ate a little of it, and eventually it became uneatable. When farmers tried to save grain, the rats consumed a little every day. When cavemen tried to save water, it evaporated. The only type of savings that has been relatively free from loss was when we saved gold and silver and copper - and even then, if you try to hide it long enough, someone is eventually going to find it and steal it. But if you want to try your luck against the maggots, rats, and thieves, you are perfectly welcome to convert your cash into meat, grain, or gold.
    See, I think treating a slot machine like BANK is stupid.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

  7. #47
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by Voltaire X View Post
    *sigh* I have to respond to this argument every few days now.

    Free trade is a good thing for everyone in the long run. It increases our standard of living. Outsourcing jobs is actually good for our economy. It allows us to focus our resources on producing goods that we have a comparative advantage in compared to other countries. We'd have a much lower standard of living if we manufactured everything here in the US as opposed to importing most basic goods like we currently do.
    Thats a logical argument, and not without merit, but outsourcing doesn't result in an increased standard of living when the trade is not recipricated in an equal amount.

    Our gov debt to China isn't because we spend to much or tax too little, it's because China chooses to purchase our debt in the free market because they have excess dollars and dollars are not legal tender in China. They acquire those excess dollars because they don't choose to purchase as much from America as Americans purchase from them. the Chineese have to do something with those dollars, so they purchase US debt with them. It's one of the free market's mechanism for repatriating them.

    When foreign trade causes unemployment at home, it's not a good thing, unless the unemployment is voluntary and unless we have a method of income distribution other than work.

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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by KevinKohler View Post
    Make sure you deliver that message to my parents, who lost the bulk of their savings in 401Ks when the stock market crashed. Right before they were due to retire.
    Surely they didn't cash out in such a bad market did they? The market is nearly where it was prior to the collapse, so if they stayed in the market, by now they should have nearly recovered their losses. One thing is that you have to remember that most likley, much of their 401k balance was probably due not to the money that they saved, but due to the increases that they were rewarded with due to investing their money in the stock market in the first place. It does have it's ups and downs, smart people buy when it is down and sell when it is up.

  9. #49
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by KevinKohler View Post
    See, I think treating a slot machine like BANK is stupid.
    Well I understand that. I'm not that convienced either that the ponzi scheme that we call the stock market is the smartest way to invest ones savings either. I have a very small IRA account that is in stocks, but thats all.

    Most of my savings is invested in my business. the commercial property that I operate my business out of (I also have a little rental income attached to that), my manufacturing equipment and inventory, etc. If one doesn't have the stomach to invest in the stock market, then maybe investing in commercial real estate (please buy after prices have declined, not after they have reached record levels), or rental houses, or in your own business is in order.

    Now if you can't tollerate risk at all, then maybe the bank is your best place to put your savings, you just have to accept the fact that in exchange for relative saftey, you will pay the price of inflation. Oh, and you do realize that when you put money in a bank account, your are effectively loaning it to the bank don't you? thats why they pay you interest on your savings account. don't you have some sort of religious thing against loaning money?

  10. #50
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    Re: Inflation on the rise? Market says not so much

    Quote Originally Posted by imagep View Post
    Surely they didn't cash out in such a bad market did they? The market is nearly where it was prior to the collapse, so if they stayed in the market, by now they should have nearly recovered their losses. One thing is that you have to remember that most likley, much of their 401k balance was probably due not to the money that they saved, but due to the increases that they were rewarded with due to investing their money in the stock market in the first place. It does have it's ups and downs, smart people buy when it is down and sell when it is up.
    Never heard of forced retirement? Once you hit "the age" a company to do with you as they please. And try getting a job at 65.

    So, yeah...they had to cash out. it was cash out, or foreclose. My dad finally found another job. Bagging groceries. He was an accomplished machinist for over 30 years. So you don't get to talk to me about the merits of "investing". Sorry. It is, always has been, and always will be...a slot machine.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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