nom=de=plume wrote:

"Wayne.B" wrote in message
...
On Thu, 8 Jul 2010 17:47:10 -0700, "nom=de=plume"
wrote:

I listened to David Frum on NPR. He had an interesting take on
inflation,
basically saying that mild inflation would take a big bite out of the
debt
situation.

It will also take a bite out of your life savings and fixed income if
you have any. Inflation is a hidden tax on the thrifty.


Well... sure. It's an issue. It still seems better than deflation, which
is his point.


No, not "sure." Inflation is not a tax on the thrifty in a "normal"
economy. Coca-cola going from 5 cents 50 cents hasn't hurt anybody.
There has "always" been inflation. Wages and cost of goods have
"always" inflated. Market forces maintain an equilibrium.
Ordinarily interest gained on savings beat inflation by a couple points.
And fixed income instruments are tied to interest rates.
Social security has COLA.
Even the worst inflation and highest interest rates suffered in the last
century quickly adjusted due to market force equilibrium, and did far
less damage than the Wall Street generated bubbles and subsequent
joblessness we now suffer.

Virtually zero interest rates and zero inflation are unnatural.
The only reason they exist is the Fed manipulation of money supply.
That is done so money is shoveled into Wall Street, which is where the
Fed manipulators come from and who they cater to.
With zero interest on savings, savings is discouraged.
Savings also fuels small business loans and stimulates the economy.
Now that it is becoming clear to those with any sense that Wall Street
is best at offering false promises and shipping jobs offshore, we may
get back to a real economy.
But not until the jokers running the show, ie Summers, Geithner, et al
are tossed out on their keisters.

When the fantasies of everybody becoming wealthy because of Chinese
labor are put to rest, we can get back to work.
Make no mistake, overall wealth is created by labor and the production
of goods, then the creation of services to cater to that wealth.
What we have had for the past 20-30 years is a redistribution of wealth,
from the labor of goods and service providers to financial manipulators.

I laugh when I hear some of these billionaires being applauded for
giving some billions of their many billions to charity.
Nobody questions how they attained those billions, or examines how that
money could have been used to invigorate the economy had it not been
hoarded and closely held, when not employed by Wall Street to ship jobs
offshore.

But in any case most of that wealth is contained in inflated equities
and is not real.
As Wall Street continues to tumble most of it will evaporate back into
the thin air whence it came.
But the financial manipulators and baby boomers who benefited from the
manipulation will still be well ahead of the game with cash and real
estate, as future generations pay for their malfeasance with real labor.
The working youngsters who are now contributing to 401k equities due to
no other avenue for savings are being taken for suckers.

When Wall Street became the center of our economy, the future was
foretold. The center can not hold.

Jim - Former economist. Preacher now. God bless America, rec.boats and
hard work. God damn Wall Street and the love of money over Country.

"Jim" wrote in message
...
nom=de=plume wrote:

"Wayne.B" wrote in message
...
On Thu, 8 Jul 2010 17:47:10 -0700, "nom=de=plume"
wrote:

I listened to David Frum on NPR. He had an interesting take on
inflation,
basically saying that mild inflation would take a big bite out of the
debt
situation.

It will also take a bite out of your life savings and fixed income if
you have any. Inflation is a hidden tax on the thrifty.


Well... sure. It's an issue. It still seems better than deflation, which
is his point.


No, not "sure." Inflation is not a tax on the thrifty in a "normal"
economy. Coca-cola going from 5 cents 50 cents hasn't hurt anybody.
There has "always" been inflation. Wages and cost of goods have
"always" inflated. Market forces maintain an equilibrium.

WHAT?? Wages and cost of goods have absolutely fallen from time to time.

Sure, eventually market forces go to equilibrium. The problem is the
hardships that ensue when there are no brakes on the phenomenon.

Ordinarily interest gained on savings beat inflation by a couple points.
And fixed income instruments are tied to interest rates.
Social security has COLA.
Even the worst inflation and highest interest rates suffered in the last
century quickly adjusted due to market force equilibrium, and did far
less damage than the Wall Street generated bubbles and subsequent
joblessness we now suffer.

Virtually zero interest rates and zero inflation are unnatural.
The only reason they exist is the Fed manipulation of money supply.
That is done so money is shoveled into Wall Street, which is where the
Fed manipulators come from and who they cater to.
With zero interest on savings, savings is discouraged.
Savings also fuels small business loans and stimulates the economy.
Now that it is becoming clear to those with any sense that Wall Street
is best at offering false promises and shipping jobs offshore, we may
get back to a real economy.
But not until the jokers running the show, ie Summers, Geithner, et al
are tossed out on their keisters.

When the fantasies of everybody becoming wealthy because of Chinese
labor are put to rest, we can get back to work.
Make no mistake, overall wealth is created by labor and the production
of goods, then the creation of services to cater to that wealth.
What we have had for the past 20-30 years is a redistribution of wealth,
from the labor of goods and service providers to financial manipulators.

I laugh when I hear some of these billionaires being applauded for
giving some billions of their many billions to charity.
Nobody questions how they attained those billions, or examines how that
money could have been used to invigorate the economy had it not been
hoarded and closely held, when not employed by Wall Street to ship jobs
offshore.

But in any case most of that wealth is contained in inflated equities
and is not real.
As Wall Street continues to tumble most of it will evaporate back into
the thin air whence it came.
But the financial manipulators and baby boomers who benefited from the
manipulation will still be well ahead of the game with cash and real
estate, as future generations pay for their malfeasance with real labor.
The working youngsters who are now contributing to 401k equities due to
no other avenue for savings are being taken for suckers.

When Wall Street became the center of our economy, the future was
foretold. The center can not hold.

Jim - Former economist. Preacher now. God bless America, rec.boats and
hard work. God damn Wall Street and the love of money over Country.

I guess you never learned about deflation. Not much of an economist, no
wonder you switched to preaching.

wrote in message
...
On Fri, 09 Jul 2010 11:06:07 -0500, Jim wrote:

No, not "sure." Inflation is not a tax on the thrifty in a "normal"
economy. Coca-cola going from 5 cents 50 cents hasn't hurt anybody.
There has "always" been inflation. Wages and cost of goods have
"always" inflated. Market forces maintain an equilibrium.
Ordinarily interest gained on savings beat inflation by a couple points.
And fixed income instruments are tied to interest rates.

Maybe

No. Mostly just untrue. Deflation is a threat that's greater in some
respects to inflation (not hyper-inflation of course).

Social security has COLA.

Not this year and the future is uncertain. We could even see a
reduction in SS payments.

That's not saying much... sure, the future is uncertain.


Virtually zero interest rates and zero inflation are unnatural.
The only reason they exist is the Fed manipulation of money supply.
That is done so money is shoveled into Wall Street, which is where the
Fed manipulators come from and who they cater to.
With zero interest on savings, savings is discouraged.

The zero interest rate the fed has is just another debt.
It is simply a price we will be paying later when they can no longer
manipulate the interest rates because the people who buy our bonds
demand more return for their risk.

The Fed always manipulates rates... this ensures stability, which is why
they're around.

wrote in message
...
On Fri, 9 Jul 2010 11:43:34 -0700, "nom=de=plume"
wrote:

Ordinarily interest gained on savings beat inflation by a couple points.
And fixed income instruments are tied to interest rates.

Maybe

No. Mostly just untrue. Deflation is a threat that's greater in some
respects to inflation (not hyper-inflation of course).


There is no guarantee that investment interest beats inflation. In
fact over my lifetime I have lived through several periods when
inflation outraced investment by huge numbers. (Think Carter)

Not sure of your point. Yes, you're right. What's that got to do with
deflation?


The zero interest rate the fed has is just another debt.
It is simply a price we will be paying later when they can no longer
manipulate the interest rates because the people who buy our bonds
demand more return for their risk.

The Fed always manipulates rates... this ensures stability, which is why
they're around.



It works as long as people continue to buy our bonds at an interest
rate we can afford. The future of that is uncertain too.

Well, yeah, the future is uncertain. That's not going to change. You can
base your life around fear and live in a hole in the ground or you can plan
for the worst and expect better.

wrote in message
...
On Fri, 9 Jul 2010 15:01:07 -0700, "nom=de=plume"
wrote:

It works as long as people continue to buy our bonds at an interest
rate we can afford. The future of that is uncertain too.

Well, yeah, the future is uncertain. That's not going to change. You can
base your life around fear and live in a hole in the ground or you can
plan
for the worst and expect better.


I am certainly a lot more concerned about the economy than I am about
global warming.

Unfortunately, they are tightly related and will be even more so in the
future.

wrote in message
...
On Fri, 9 Jul 2010 20:49:50 -0700, "nom=de=plume"
wrote:

I am certainly a lot more concerned about the economy than I am about
global warming.

Unfortunately, they are tightly related and will be even more so in the
future.

I agree, the carbon tax, if enacted, will crush any chance of a
recovery.

That's certainly unlikely. Again, a right-wing talking point. We generally
have a progressive tax policy. There's no reason to think that it would be
different here.