The federal reserve is going to pull another ONE TRILLION DOLLARS OUT OF THEIR ASS!

[LiberalNut]

You folks simply don't know anything about economics. Nothing. Wages absolutely adjust to higher prices. They just lag a little behind. This isn't leftist economics. It's fucking ALL economics. You can find the proof in Wealth of Nations for christsake! Yeah, Adam Smith, what a fucking commie!

 

[Soggy in NOLA]

Utter nonsense... if the backing for money is $1.. and you print (electronically of course) and inject another $100 without any basis... the resulting $101 is worth $1.

It's pretty basic folks. The ancient Romans did it via clipping the gold coins.

 

[Big Fitz]

You don't remember the 70's I see.

Of course I remember the 70s. In the end, my father came out smelling like a rose. His mortgage payment was the same but his paycheck was much, much bigger. Sure, it's painful for awhile cause prices rise faster than wages but in the end, the debtor wins as a result of inflation.

The math is pretty simple. Wanna see the math?

So, your family got lucky. So did mine, but I remember grocery shopping with my mother and hearing the complaining around me of how fast prices went up. Repricing up to 3 times a week and people who were on fixed incomes getting poorer and poorer.

Sure, no problem. Nothing touched you or me, but I sure felt for those around me who DID get fucked when their paychecks were suddenly 20-40% less potent in the space of a few quick months and years.

 

[LiberalNut]

Backing for money? This isn't 1974 idiot. Only one thing backs money, the full faith and credit of the United States, that's it.

Nobody electronically injected anything. The fed bought bonds. Bank has pice of paper. Government takes piece of paper and exchanges it for cash. That's what happened.

Get a clue.

 

[LiberalNut]

So, your family got lucky. So did mine, but I remember grocery shopping

Like I said, short term pain for long term gain. Your family came out smelling like a rose didn't they? The debtor wins as a result of inflation. that's the fucking truth, isn't it?

But, of course, this simple lesson in basic economics is beside the point. In the face of 9.6% unemployment, the injection of liquidity into the sytem is not inflationary, or barely so. I'm not saying it'll work but not trying for fear of the inflation boogieman is a bad idea.

 

[Big Fitz]

You folks simply don't know anything about economics. Nothing. Wages absolutely adjust to higher prices. They just lag a little behind. This isn't leftist economics. It's fucking ALL economics. You can find the proof in Wealth of Nations for christsake! Yeah, Adam Smith, what a fucking commie!

In THEORY that's the way it works. In APPLICATION... not so much.

There is a 1 to 4 year lag time as businesses try to keep themselves from going under and charge more without increasing their employees wages. Then when the employees can't afford to live off their salaries, they have to leave and find work elsewhere or practically revolt to get a proper raise, which is never enough because the instability makes the business leery about it's own survival if it saddles itself with overly inflated wages.

Only new hires and critical employees come close to keeping pace with the new inflated wages that have less purchase power. So get ready for a HUGE bunch of turmoil in the job market if this inflation starts, which is pretty much an inevitability.

 

[Big Fitz]

Only one thing backs money, the full faith and credit of the United States, that's it.

Which has been thrown, nothing but net, into the shitter by W, P-BO and the Pelosi/Reid congress. Our good credit is a gnat's pube away from being downgraded by EVERY major credit firm.

You seem to think we're charmed, and there's no way we can become the next Greece or more likely Weimar Republic. But trust me, it will.

 

[LiberalNut]

Only new hires and critical employees come close to keeping pace with the new inflated wages

That's bullshit and you know it. Your family went through this in the real world, right? Wages adjust to prices. How much was your Dad's mortgage in 1970? What was his paycheck? The mortgage didn't change, right? the paycheck did, right? He came out smelling like a rose, right?

 

[Big Fitz]

Like I said, short term pain for long term gain.

Again, you and I were in the minority in many respects. Technically those who went into the tank in 1932, assuming they lived, were fine by 1945 on balance. But that doesn't excuse 16 years of (1929 to 1945) bad fiscal policy through inflation and government waste.

 

[LiberalNut]

Our good credit is a gnat's pube away from being downgraded by EVERY major credit firm.

I don't see any lack of folks willing to buy our debt. Your rant here is ignorant.

What happens to China in the real world if they don't buy our debt?

tick tock
tick tock

 

[LiberalNut]

you and I were in the minority in many respects.

Bullshit. Anyone who was in debt at a fixed rate in 1970 looked like a rose in 1982. That's just a fact. The people who got screwed were the people who owned that debt and THEY are the minority. That's why Adam Smith was against inflation. Not because it hurt workers but because it erodes capital.

Inflation redistributes wealth. You benefitted from that personally!

 

[Big Fitz]

Most of our debt(okay not most, but a disturbingly large amount) is now being bought by ourselves. What the hell do you think QE2 is about? what do you think QE1 was about? It was about buying our own debt to inflate stock prices. The serpent ate it's own tail. Nothing good will come of this. China's been threatening to cut up our credit cards with them for about a year or two, sooner or later, that threat WILL be made good.

Right now the Chinese manufacturing is geared almost exclusively for export. They could in many regards just turn internally and satisfy their needs by modernizing their ENTIRE nation, not just the coastal sliver. 1.3 billion people is a lot to serve. Your predictions of economic doom for China is not a proven thing either. Their financial turbulance will be much shorter than our descent into 3rd world status. They have both money AND manufacturing. We've neither.

 

[Big Fitz]

Inflation redistributes wealth. You benefitted from that personally!

You assume I think both redistribution of wealth, AND my personal benefit was a good thing. I had no say in my circumstances then.

But it's good to see relativism is alive in well and properly associated with insanity in the minds of nuts all over.

 

[LiberalNut]

China's been threatening to cut up our credit cards with them for about a year or two

Uh huh. And what happens to them if they stop buying our debt? The real world is knocking dude, are you gonna answer the door?

They could in many regards just turn internally

No fucking way! They don't have the internal purchasing power to come close to buying the output capacity of their industries. If we go belly-up, they go belly-up worse. Even if you don't understand that, they do.

 

[LiberalNut]

You assume I think both redistribution of wealth, AND my personal benefit was a good thing.

No, I don't. I expect you to not recognize that it's a good thing and to advocate against your own best interests and in favor of mine. It's what wingnuts do.

 

[Bern80]

Care to offer something that I'm wrong about Fitnah? Care to actually debate with facts?

I didn't think so.

Well you're wrong and your right. I think you know that. Inflation/deflation is one of those economic things that isn't really every totally 'good' or totally 'bad'. It's not good in the sense that the same amount of money buys less for you and me. But it is also good in the some the example you gave in that importers of our stuff can buy more of it.

 

[Big Fitz]

That's bullshit and you know it.

Bull fucking shit back at you? When's the last time YOU were hourly working hard one or two jobs just to make ends meet? Never? I have many friends as well as personal experience with this being FACT.

You make tons of assumptions. Those who did not have the ability to get a house in 1970 but could have gotten one in 1974 were in a much worse position with mortgages approaching 20% and a required 20% down. I reiterate, you got lucky. Most of the nation during Carter and even the first 2 years of Reagan, till his tax cuts kicked in were in bad condition too.

 

[Big Fitz]

China's been threatening to cut up our credit cards with them for about a year or two

Uh huh. And what happens to them if they stop buying our debt? The real world is knocking dude, are you gonna answer the door?

They could in many regards just turn internally

No fucking way! They don't have the internal purchasing power to come close to buying the output capacity of their industries. If we go belly-up, they go belly-up worse. Even if you don't understand that, they do.

Riiiiiiight. LOL. They know there will be short term losses and hard times. That's obvious. But the rest of those paying attention know that China's been smart, encouraging their citizens to SAVE and cornering commodities markets in Africa and all across the world in critical resources for maintaining a 1st world super power status.

They will hit the crapper hard for a year or so, and then like Harding/Coolidge, they will rebound out and be stronger than ever as they modernize their nation with the wealth of other nations that they earned through years of very advantageous trade policies and shrewd bargaining.

All they have to do is suppress the violence that will spring up with the short term crash. Think long game.

 

[Big Fitz]

You assume I think both redistribution of wealth, AND my personal benefit was a good thing.

No, I don't. I expect you to not recognize that it's a good thing and to advocate against your own best interests and in favor of mine. It's what wingnuts do.

I'm not the moron saying inflation is good for the citizens, when it isn't. It's only good for those in debt assuming they can decouple the devaluation of their own income from their debts. Many to most can't.

 

[LiberalNut]

mortgages approaching 20% and a required 20% down.

The vast, vast number of homeowners are already in their houses and have been there for years. This is always the case. The new buyers are always a small percentage of total home owners. Yeah, if you were trying to buy a house in the mid to late 70s, a single family anyway, things were tough. But, if you manged to get in, you made out like a bandit again cause just a few years later you could refinance. Now, if you were buying multi-families, which would have been the thing to do, you fucking KILLED IT. The high interest rates depressed the price and the tough time new buyers were having getting single families increased the number of renters, increasing rents. So, you got a cheap house that cash flowed and then you got to refinance!

Tell me genius, what's better, a multi-family that cash flows $1000 with a 20% mortgage or a multi-family that cash flows $1000 with a 5% mortgage?

tick tock
tick tock