“The worst thing that can happen in a system is an exponential function of scale. That simply means, if you double the system – you don’t double the risk. We have more than double the system. We’ve increased the risk exponentially. That is not captured in any central bank model because they are using a lot of models that are completely obsolete and do not reflect reality.”
“We are now beyond the ability of central banks to deal with these problems. I reflect back to 1998 and the Russian based Long Term Management Crisis. Wall Street was left to bailout a hedge fund. Then in 2008 central banks bailed out Wall Street. In the next crisis, who is going to bailout the central banks? Each crisis gets bigger and more dangerous than the one before. We are now at the limit with central banks. The balance sheets are stretched." - Jim Rickards
“The worst thing that can happen in a system is an exponential function of scale. That simply means, if you double the system – you don’t double the risk. We have more than double the system. We’ve increased the risk exponentially. That is not captured in any central bank model because they are using a lot of models that are completely obsolete and do not reflect reality.”
“We are now beyond the ability of central banks to deal with these problems. I reflect back to 1998 and the Russian based Long Term Management Crisis. Wall Street was left to bailout a hedge fund. Then in 2008 central banks bailed out Wall Street. In the next crisis, who is going to bailout the central banks? Each crisis gets bigger and more dangerous than the one before. We are now at the limit with central banks. The balance sheets are stretched." - Jim Rickards
Looks like a pretty good correlation of increased business and debt. Imagine that.
Looks like a pretty good correlation of increased business and debt. Imagine that.
That does appear to be a good correlation. Industrial production is up ~65% in the last quarter century and Federal Debt is up ~500%.
The correlation between the value of our equity markets and our Federal Debt is interesting as well.
Amazing how one dollar of new business can support so much. Company earns a dollar. Pays employee. Employee goes to restaurant.. Restaurant makes dollar. Restaurant pats cook. Cook goes to mall. Cook pays guy to cut grass. That same dollar gets passed a dozen times. You see how this works now?
Amazing how one dollar of new business can support so much. Company earns a dollar. Pays employee. Employee goes to restaurant.. Restaurant makes dollar. Restaurant pats cook. Cook goes to mall. Cook pays guy to cut grass. That same dollar gets passed a dozen times. You see how this works now?
It's not working. Something must be broken. Each time that dollar changes hands it buys less - it gets eroded by inflation and taxes. The only benefactor with each transfer is the tax collector and as the chart shows, he's not seeing the volume of hand changing that he used to. Another reason US debt is in trouble, lack of tax revenue. A decline in dollars being spent will have to be offeset by higher taxes to support a growing US debt obligation.
Obviously printing more money (the true definition of inflation) didn't solve that problem and only adds to the threat of price inflation. As Coinstartled pointed out, things require more dollars than they used to. Do you see that reversing itself any time soon?
Green or red on the ticker at the bottom of your TV screen fools most people. That's why the FED works hard to keep it green. I wished they worked half as hard to protect my dollars - then there would be no need for dollar insurance.
Amazing how one dollar of new business can support so much. Company earns a dollar. Pays employee. Employee goes to restaurant.. Restaurant makes dollar. Restaurant pats cook. Cook goes to mall. Cook pays guy to cut grass. That same dollar gets passed a dozen times. You see how this works now?
It's not working. Something must be broken. Each time that dollar changes hands it buys less - it gets eroded by inflation and taxes. The only benefactor with each transfer is the tax collector and as the chart shows, he's not seeing the volume of hand changing that he used to. Another reason US debt is in trouble, lack of tax revenue. A decline in dollars being spent will have to be offeset by higher taxes to support a growing US debt obligation.
Obviously printing more money (the true definition of inflation) didn't solve that problem and only adds to the threat of price inflation. As Coinstartled pointed out, things require more dollars than they used to. Do you see that reversing itself any time soon?
And all you wrote is exactly why it works. You'll understand eventually.
@derryb said:
Green or red on the ticker at the bottom of your TV screen fools most people. That's why the FED works hard to keep it green. I wished they worked half as hard to protect my dollars - then there would be no need for dollar insurance.
Sucks doesn't it, when you don't know how to make more dollars.
Amazing how one dollar of new business can support so much. Company earns a dollar. Pays employee. Employee goes to restaurant.. Restaurant makes dollar. Restaurant pats cook. Cook goes to mall. Cook pays guy to cut grass. That same dollar gets passed a dozen times. You see how this works now?
It's not working. Something must be broken. Each time that dollar changes hands it buys less - it gets eroded by inflation and taxes. The only benefactor with each transfer is the tax collector and as the chart shows, he's not seeing the volume of hand changing that he used to. Another reason US debt is in trouble, lack of tax revenue. A decline in dollars being spent will have to be offeset by higher taxes to support a growing US debt obligation.
Obviously printing more money (the true definition of inflation) didn't solve that problem and only adds to the threat of price inflation. As Coinstartled pointed out, things require more dollars than they used to. Do you see that reversing itself any time soon?
A side effect of ZIRP is higher tax revenues for municipalities. My local assessor raised all residential valuations 8.3% this year due to property values rocketing skyward. They're smiling at city hall with this windfall. A typical homeowner saw a ~$150 property tax increase for 2017, with ~25,000 homes to tax that's a cool $3.75m/year to play with. Fees for city services went up about 2% as well.
Good thing inflation's only 1.5%. Gotta keep feeding that monster.
I perceive that all of us agree that things aren't going well.
The division occurs between cohodk and Bailey, who perceive that all is not necessarily healthy, but that the consequences aren't necessarily to be felt in any predictable time frame, and derryb, coinstartled et al., who focus on the inevitableness of the consequences. (I'm not sure where bronco2078 is on this, who seems to snipe from the grandstands).
Am I to understand, though, that all agree money based on altogether on faith in a particular government is built on sand, and is unsustainable in the long run?
If that is true, than I assume that all that divides us here is a question of not whether, but when.
Some expect cataclysm, some do not. Some see disaster, others see opportunity. Some are fearful, some are brave. Some are emotional, others logical. Some feel entitled, others take personal responsibility. For some the USA has a 50 mile radius, for others it's 1000.
All have different life experiences from which to draw wisdom. We are all a product of our own experiences.
@cohodk said:
Some expect cataclysm, some do not. Some see disaster, others see opportunity. Some are fearful, some are brave. Some are emotional, others logical. Some feel entitled, others take personal responsibility. For some the USA has a 50 mile radius, for others it's 1000.
All have different life experiences from which to draw wisdom. We are all a product of our own experiences.
The truly brave are often fearful. The logical are often emotional.
@cohodk said:
VanHalen...how about in exchange for the $150 tax increae, when you sell your house you get $25000 less than what it's worth?
You are complaining about increasing your net worth. Incredible.
$25,000? come on how much of that sticks in the sellers pocket? There is taxes on that money , and generally its pretend money caused by inflation or bubbles more often than not. If the market goes the other way you can be -25,000 easily and you still had to pay the tax.
Not to mention that house profit will probably be what 2 nights in a hospital bed runs you . There is a ratchet effect in play where whatever gains you manage to make are stolen from you when you are under duress somehow.
There is a development right around the corner thats being done how most in the trade would view as the "the right way" where its going to happen.
A large loop road with multi stub streets cul de sacs that has been very carefully staged by an intelligent builder . The last street he did he waited until everything else was sold he put in 8 houses on a street and they were done in November and all are empty here still on April 7th. Just like that he guessed wrong and now tick tock tick tock buyers are waiting for the price drop that is inevitable. He will wait a little too long , he could lose a big chuck of his expected profit on the tail end of this project. When he does drop the prices buyers will buy and 6 months later all those buyers that thought they were clever will get hit a drop of their own.
It's been a mild winter , and spring is here and not much work is going on.
@cohodk said:
VanHalen...how about in exchange for the $150 tax increae, when you sell your house you get $25000 less than what it's worth?
You are complaining about increasing your net worth. Incredible.
$25,000? come on how much of that sticks in the sellers pocket? There is taxes on that money , and generally its pretend money caused by inflation or bubbles more often than not. If the market goes the other way you can be -25,000 easily and you still had to pay the tax.
Not to mention that house profit will probably be what 2 nights in a hospital bed runs you . There is a ratchet effect in play where whatever gains you manage to make are stolen from you when you are under duress somehow.
There is a development right around the corner thats being done how most in the trade would view as the "the right way" where its going to happen.
A large loop road with multi stub streets cul de sacs that has been very carefully staged by an intelligent builder . The last street he did he waited until everything else was sold he put in 8 houses on a street and they were done in November and all are empty here still on April 7th. Just like that he guessed wrong and now tick tock tick tock buyers are waiting for the price drop that is inevitable. He will wait a little too long , he could lose a big chuck of his expected profit on the tail end of this project. When he does drop the prices buyers will buy and 6 months later all those buyers that thought they were clever will get hit a drop of their own.
It's been a mild winter , and spring is here and not much work is going on.
First, of thst 25k, 94% is in your pocket after you pay the realtor.
Second, you say it's not real money, only due to inflation. Well, is gold going from 1000 to 1250, real money, or only caused by inflation? There's no difference.
3rd, Connecticut, which I think is where you are, plain and simple sucks. The weather sucks and geographically(scenically) unappealing, which leads to people seeking better environments which leads to population decline, which in turn leads to higher tax burden on those that stay, which leads to more population decline and the cycle tepeats. This is what I mean by living in a 50 mile radius world. Builders in Denver can't find enough workers. Florida, the Pacific Northwest, North Carolina, Texas are booming.
Fourth, using words such as "stolen" and "pretend" is born of emotional response, which I mentioned earlier.
@dpoole said:
I perceive that all of us agree that things aren't going well.
The division occurs between cohodk and Bailey, who perceive that all is not necessarily healthy, but that the consequences aren't necessarily to be felt in any predictable time frame, and derryb, coinstartled et al., who focus on the inevitableness of the consequences. (I'm not sure where bronco2078 is on this, who seems to snipe from the grandstands).
Am I to understand, though, that all agree money based on altogether on faith in a particular government is built on sand, and is unsustainable in the long run?
If that is true, than I assume that all that divides us here is a question of not whether, but when.
I don't think that money built on faith is built on sand or doomed to fail. It doesn't have to be, anyway. The current situation, however, is unsustainable. What I've never been able to understand is the thought that you should hold gold and silver as a way to get through a total collapse in the dollar. Maybe in periods of abnormally high inflation.
Well, we all have our own past experiences, current environment, and point of view-- sharing them with each other is the whole point of a forum like this and a thread like this. Like "the breakfast club", I think all of us PM affecionados have traits of the world-weary citizen, the paranoid conspiracy theorist, the optimist, the hoarder, the speculator, the doomsday prepper. And we punctuate our commentary with pithy responses, clever retorts, and generally good-natured banter.
Fortunately, the World very seldom literally Ends. Things change, evolve, grow, die back, there are trends up and down for features and characteristics of society, periods of punctuated equilibrium in certain geographic and economic areas.
"Things" are seldom as good as we hope, or as bad as we fear. It's probably important to keep doing both, sigh, and go on..
My biggest personal issue with some commentators here (and ones I know in person) is the tendency to zoom from the general to the specific, and back again, in order to make points and try to win arguments, especially about the literally unknowable future. Another problem I have, which I point out above, is the use of expressions like 'the market' and 'the economy' as if they're one homogenous thing with uniform behavior, rather than extremely complicated systems with practically infinite, constantly changing input variables. The systems are so complicated, it is very difficult, and rather unproductive, to generalize and describe them as wholes; much of the value is in examining aspects of them, such as Bronco's example of the construction project. Those houses (like my coins) will definitely sell at Some price, someday.
@cohodk said:
VanHalen...how about in exchange for the $150 tax increae, when you sell your house you get $25000 less than what it's worth?
You are complaining about increasing your net worth. Incredible.
$25,000? come on how much of that sticks in the sellers pocket? There is taxes on that money , and generally its pretend money caused by inflation or bubbles more often than not. If the market goes the other way you can be -25,000 easily and you still had to pay the tax.
Not to mention that house profit will probably be what 2 nights in a hospital bed runs you . There is a ratchet effect in play where whatever gains you manage to make are stolen from you when you are under duress somehow.
There is a development right around the corner thats being done how most in the trade would view as the "the right way" where its going to happen.
A large loop road with multi stub streets cul de sacs that has been very carefully staged by an intelligent builder . The last street he did he waited until everything else was sold he put in 8 houses on a street and they were done in November and all are empty here still on April 7th. Just like that he guessed wrong and now tick tock tick tock buyers are waiting for the price drop that is inevitable. He will wait a little too long , he could lose a big chuck of his expected profit on the tail end of this project. When he does drop the prices buyers will buy and 6 months later all those buyers that thought they were clever will get hit a drop of their own.
It's been a mild winter , and spring is here and not much work is going on.
That's the point. As interest rates rise that "net worth increase" disappears. Most homeowners have neither bought nor sold their homes in the last few years (or will sell in next few). Home values have been artificially inflated by ZIRP which allows one more tax grab to add to the fee increases we see annually. There has been an economic benefit to homebuilders, plumbers, electricians, home decorators, etc.
@cohodk said:
Net worth increases as rates increase. A dollar is worth more as the more interest it earns.
only if it is earning a higher rate than that of inflation. After tax, the rate of interest you earn on your savings must be greater than the rate of inflation, in order for your money to actually be growing. If it's not growing it is more than likely shrinking.
@cohodk said:
Net worth increases as rates increase. A dollar is worth more as the more interest it earns.
only if it is earning a higher rate than that of inflation. After tax, the rate of interest you earn on your savings must be greater than the rate of inflation, in order for your money to actually be growing. If it's not growing it is more than likely shrinking.
Said to the man who has seen the value of gold fall 35% over the last 6 years.
9 years later and silver still at the same price. Oh, damn you silver, you wretched evil beast, bearer of ill promise.
As interest rates rise consumers will not pay, and many cannot pay, the inflated prices they are claiming homes are worth. Same with autos and dozens of other things. ZIRP has distorted so many things that returning to historically average interest rates appears unlikely but we'll eventually get close. The high for greedy who own D.C. cannot be quenched so it will take many years.
Anyway, unrealized gains are being taxed when local gov'ts begin assessing real estate based on ZIRP distorted values and that's exactly what's happening.
@cohodk said:
Net worth increases as rates increase. A dollar is worth more as the more interest it earns.
only if it is earning a higher rate than that of inflation. After tax, the rate of interest you earn on your savings must be greater than the rate of inflation, in order for your money to actually be growing. If it's not growing it is more than likely shrinking.
Said to the man who has seen the value of gold fall 35% over the last 6 years.
9 years later and silver still at the same price. Oh, damn you silver, you wretched evil beast, bearer of ill promise.
Ugh, what a long hard road it's been.
Would that be the same gold that's up over 100% in ten years?
Typical coho. Can't dispute the facts so let's change the focus of attention. lol
@VanHalen said:
As interest rates rise consumers will not pay, and many cannot pay, the inflated prices they are claiming homes are worth.
You are probably too young to remember when folks had 12 and 14% mortgages. The real estate market did well and people made their payments.
I am young but not that young. My first CD was a $15k note for 30 months. Yielded 15.3%, about $22k when it matured in 1984.
We've successfully re-inflated the bubble. At least successfully as most in the Top Quartile of Americans define it. With 55% of all Americans now living in a low income household the definition is somewhat different.
@VanHalen said:
As interest rates rise consumers will not pay, and many cannot pay, the inflated prices they are claiming homes are worth.
You are probably too young to remember when folks had 12 and 14% mortgages. The real estate market did well and people made their payments.
and then it all came crumbling down. Can't happen again, right? Lender's, borrowers and appraisers are now more responsible. ha!
Actually, high rates drive down prices. Monthly payment, with interest, is a buyer's deciding factor.
Highly unlikely we will see another national housing crisis for at least 2 generations.
Yes, high interest rates will cause a decline in home values. We be a LONG WAY from high rates.
As long as the fed keeps juggling $21T in debt the way that the guy spun the plates on Ed Sullivan, we will be fine. One plate falls though and we are in a financial crises for the ages.
Haven't been on this forum that much. Just read this thread. I see I've missed absolutely nothing. What a disfuntcional family
And Gecko is back
mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
@Justacommeman said:
Haven't been on this forum that much. Just read this thread. I see I've missed absolutely nothing. What a disfuntcional family
And Gecko is back
mark
Mark, just make sure you have a full bag of popcorn by your side when reading these posts, and keep pouring a glass of Kool-aid to help wash it down....!
@cohodk said:
Net worth increases as rates increase. A dollar is worth more as the more interest it earns.
only if it is earning a higher rate than that of inflation. After tax, the rate of interest you earn on your savings must be greater than the rate of inflation, in order for your money to actually be growing. If it's not growing it is more than likely shrinking.
Said to the man who has seen the value of gold fall 35% over the last 6 years.
9 years later and silver still at the same price. Oh, damn you silver, you wretched evil beast, bearer of ill promise.
Ugh, what a long hard road it's been.
Would that be the same gold that's up over 100% in ten years?
Typical coho. Can't dispute the facts so let's change the focus of attention. lol
Is silver not the same price as 9 years ago? Is gold not 35% lower after 5 years? Sure, gold has doubled in 10 years, thats 7% per year. Im glad its kept pace with other forms of "insurance" as it has a tendency not to.
Its fun to pick and choose dates and time frames, but lets make it simple. Would your grandpappy been better off saving via the stock market or gold over his lifetime? And how about his grandpappy? Your grandkids will look back and wish you had other forms of "insurance".
Wouldnt it be nice if your 10,000 oz of silver gave you an additional 300 oz every year, as well as appreciate in price?
Comments
“The worst thing that can happen in a system is an exponential function of scale. That simply means, if you double the system – you don’t double the risk. We have more than double the system. We’ve increased the risk exponentially. That is not captured in any central bank model because they are using a lot of models that are completely obsolete and do not reflect reality.”
“We are now beyond the ability of central banks to deal with these problems. I reflect back to 1998 and the Russian based Long Term Management Crisis. Wall Street was left to bailout a hedge fund. Then in 2008 central banks bailed out Wall Street. In the next crisis, who is going to bailout the central banks? Each crisis gets bigger and more dangerous than the one before. We are now at the limit with central banks. The balance sheets are stretched." - Jim Rickards
Give Me Liberty or Give Me Debt
Where is the yawning emoticon?
Knowledge is the enemy of fear
Whether one believes that a meltdown is imminent, a debt of $200,000 per taxpaying American is hardly insignificant.
Lol, might as well quote the gsr...
Better make more babies then to bring that debt down. Lol
Knowledge is the enemy of fear
.
Knowledge is the enemy of fear
Looks like a pretty good correlation of increased business and debt. Imagine that.
Knowledge is the enemy of fear
That does appear to be a good correlation. Industrial production is up ~65% in the last quarter century and Federal Debt is up ~500%.
The correlation between the value of our equity markets and our Federal Debt is interesting as well.
Amazing how one dollar of new business can support so much. Company earns a dollar. Pays employee. Employee goes to restaurant.. Restaurant makes dollar. Restaurant pats cook. Cook goes to mall. Cook pays guy to cut grass. That same dollar gets passed a dozen times. You see how this works now?
Knowledge is the enemy of fear
Only place where grass gets cut for a dollar is Baleyville.
It's not working. Something must be broken. Each time that dollar changes hands it buys less - it gets eroded by inflation and taxes. The only benefactor with each transfer is the tax collector and as the chart shows, he's not seeing the volume of hand changing that he used to. Another reason US debt is in trouble, lack of tax revenue. A decline in dollars being spent will have to be offeset by higher taxes to support a growing US debt obligation.
Obviously printing more money (the true definition of inflation) didn't solve that problem and only adds to the threat of price inflation. As Coinstartled pointed out, things require more dollars than they used to. Do you see that reversing itself any time soon?
Give Me Liberty or Give Me Debt
Ya regardless of whatever the fake news is this week , the economy sucks and no it isn't improving.
LoL, yeah, "the" economy sucks, "the" weather is dry, "the" people are crazy and "the" life is tough, isnt "it"?
Liberty: Parent of Science & Industry
Big question, though, how is "the" market??
Liberty: Parent of Science & Industry
Green or red on the ticker at the bottom of your TV screen fools most people. That's why the FED works hard to keep it green. I wished they worked half as hard to protect my dollars - then there would be no need for dollar insurance.
Give Me Liberty or Give Me Debt
And all you wrote is exactly why it works. You'll understand eventually.
Knowledge is the enemy of fear
Sucks doesn't it, when you don't know how to make more dollars.
Knowledge is the enemy of fear
Oh, I've got a printer, only problem is the cartel outlaws all printers but their own. Sucks, doesn't it?
Give Me Liberty or Give Me Debt
double post
Give Me Liberty or Give Me Debt
triple post
Give Me Liberty or Give Me Debt
A side effect of ZIRP is higher tax revenues for municipalities. My local assessor raised all residential valuations 8.3% this year due to property values rocketing skyward. They're smiling at city hall with this windfall. A typical homeowner saw a ~$150 property tax increase for 2017, with ~25,000 homes to tax that's a cool $3.75m/year to play with. Fees for city services went up about 2% as well.
Good thing inflation's only 1.5%.
Gotta keep feeding that monster.
Jammed up.
I perceive that all of us agree that things aren't going well.
The division occurs between cohodk and Bailey, who perceive that all is not necessarily healthy, but that the consequences aren't necessarily to be felt in any predictable time frame, and derryb, coinstartled et al., who focus on the inevitableness of the consequences. (I'm not sure where bronco2078 is on this, who seems to snipe from the grandstands).
Am I to understand, though, that all agree money based on altogether on faith in a particular government is built on sand, and is unsustainable in the long run?
If that is true, than I assume that all that divides us here is a question of not whether, but when.
Here's a warning parable for coin collectors...
Some expect cataclysm, some do not. Some see disaster, others see opportunity. Some are fearful, some are brave. Some are emotional, others logical. Some feel entitled, others take personal responsibility. For some the USA has a 50 mile radius, for others it's 1000.
All have different life experiences from which to draw wisdom. We are all a product of our own experiences.
Knowledge is the enemy of fear
VanHalen...how about in exchange for the $150 tax increae, when you sell your house you get $25000 less than what it's worth?
You are complaining about increasing your net worth. Incredible.
Knowledge is the enemy of fear
and some will tell everyone they are wrong yet not have any idea what is right.
Let the facts speak for themselves and you can't go wrong.
Give Me Liberty or Give Me Debt
The truly brave are often fearful. The logical are often emotional.
$25,000? come on
how much of that sticks in the sellers pocket? There is taxes on that money , and generally its pretend money caused by inflation or bubbles more often than not. If the market goes the other way you can be -25,000 easily and you still had to pay the tax.
Not to mention that house profit will probably be what 2 nights in a hospital bed runs you . There is a ratchet effect in play where whatever gains you manage to make are stolen from you when you are under duress somehow.
There is a development right around the corner thats being done how most in the trade would view as the "the right way" where its going to happen.
A large loop road with multi stub streets cul de sacs that has been very carefully staged by an intelligent builder . The last street he did he waited until everything else was sold he put in 8 houses on a street and they were done in November and all are empty here still on April 7th. Just like that he guessed wrong and now tick tock tick tock buyers are waiting for the price drop that is inevitable. He will wait a little too long , he could lose a big chuck of his expected profit on the tail end of this project. When he does drop the prices buyers will buy and 6 months later all those buyers that thought they were clever will get hit a drop of their own.
It's been a mild winter , and spring is here and not much work is going on.
I see you have finally looked in the mirror
Knowledge is the enemy of fear
First, of thst 25k, 94% is in your pocket after you pay the realtor.
Second, you say it's not real money, only due to inflation. Well, is gold going from 1000 to 1250, real money, or only caused by inflation? There's no difference.
3rd, Connecticut, which I think is where you are, plain and simple sucks. The weather sucks and geographically(scenically) unappealing, which leads to people seeking better environments which leads to population decline, which in turn leads to higher tax burden on those that stay, which leads to more population decline and the cycle tepeats. This is what I mean by living in a 50 mile radius world. Builders in Denver can't find enough workers. Florida, the Pacific Northwest, North Carolina, Texas are booming.
Fourth, using words such as "stolen" and "pretend" is born of emotional response, which I mentioned earlier.
Knowledge is the enemy of fear
I don't think that money built on faith is built on sand or doomed to fail. It doesn't have to be, anyway. The current situation, however, is unsustainable. What I've never been able to understand is the thought that you should hold gold and silver as a way to get through a total collapse in the dollar. Maybe in periods of abnormally high inflation.
Well, we all have our own past experiences, current environment, and point of view-- sharing them with each other is the whole point of a forum like this and a thread like this. Like "the breakfast club", I think all of us PM affecionados have traits of the world-weary citizen, the paranoid conspiracy theorist, the optimist, the hoarder, the speculator, the doomsday prepper. And we punctuate our commentary with pithy responses, clever retorts, and generally good-natured banter.
Fortunately, the World very seldom literally Ends. Things change, evolve, grow, die back, there are trends up and down for features and characteristics of society, periods of punctuated equilibrium in certain geographic and economic areas.
"Things" are seldom as good as we hope, or as bad as we fear. It's probably important to keep doing both, sigh, and go on..
Liberty: Parent of Science & Industry
My biggest personal issue with some commentators here (and ones I know in person) is the tendency to zoom from the general to the specific, and back again, in order to make points and try to win arguments, especially about the literally unknowable future. Another problem I have, which I point out above, is the use of expressions like 'the market' and 'the economy' as if they're one homogenous thing with uniform behavior, rather than extremely complicated systems with practically infinite, constantly changing input variables. The systems are so complicated, it is very difficult, and rather unproductive, to generalize and describe them as wholes; much of the value is in examining aspects of them, such as Bronco's example of the construction project. Those houses (like my coins) will definitely sell at Some price, someday.
Liberty: Parent of Science & Industry
So, back to the OP: "Everything will Grind to a Halt"?
No, it won't. That I guarantee.
Liberty: Parent of Science & Industry
I do notice though that once each thread surpasses 100 posts, the responses get longer and the charts higher.
That's the point. As interest rates rise that "net worth increase" disappears. Most homeowners have neither bought nor sold their homes in the last few years (or will sell in next few). Home values have been artificially inflated by ZIRP which allows one more tax grab to add to the fee increases we see annually. There has been an economic benefit to homebuilders, plumbers, electricians, home decorators, etc.
Net worth increases as rates increase. A dollar is worth more as the more interest it earns.
Knowledge is the enemy of fear
only if it is earning a higher rate than that of inflation. After tax, the rate of interest you earn on your savings must be greater than the rate of inflation, in order for your money to actually be growing. If it's not growing it is more than likely shrinking.
Give Me Liberty or Give Me Debt
Said to the man who has seen the value of gold fall 35% over the last 6 years.
9 years later and silver still at the same price. Oh, damn you silver, you wretched evil beast, bearer of ill promise.
Ugh, what a long hard road it's been.
Knowledge is the enemy of fear
As interest rates rise consumers will not pay, and many cannot pay, the inflated prices they are claiming homes are worth. Same with autos and dozens of other things. ZIRP has distorted so many things that returning to historically average interest rates appears unlikely but we'll eventually get close. The high for greedy who own D.C. cannot be quenched so it will take many years.
Anyway, unrealized gains are being taxed when local gov'ts begin assessing real estate based on ZIRP distorted values and that's exactly what's happening.
Would that be the same gold that's up over 100% in ten years?
Typical coho. Can't dispute the facts so let's change the focus of attention. lol
Give Me Liberty or Give Me Debt
You are probably too young to remember when folks had 12 and 14% mortgages. The real estate market did well and people made their payments.
Knowledge is the enemy of fear
and then it all came crumbling down. Can't happen again, right? Lender's, borrowers and appraisers are now more responsible. ha!
Actually, high rates drive down prices. Monthly payment, with interest, is a buyer's deciding factor.
Give Me Liberty or Give Me Debt
Highly unlikely we will see another national housing crisis for at least 2 generations.
Yes, high interest rates will cause a decline in home values. We be a LONG WAY from high rates.
Knowledge is the enemy of fear
I am young but not that young. My first CD was a $15k note for 30 months. Yielded 15.3%, about $22k when it matured in 1984.
We've successfully re-inflated the bubble. At least successfully as most in the Top Quartile of Americans define it. With 55% of all Americans now living in a low income household the definition is somewhat different.
As long as the fed keeps juggling $21T in debt the way that the guy spun the plates on Ed Sullivan, we will be fine. One plate falls though and we are in a financial crises for the ages.
I don't have a chart though so please disregard.
Haven't been on this forum that much. Just read this thread. I see I've missed absolutely nothing. What a disfuntcional family
And Gecko is back
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
disfunctional markets result in disfunctional families.
Give Me Liberty or Give Me Debt
Mark, just make sure you have a full bag of popcorn by your side when reading these posts, and keep pouring a glass of Kool-aid to help wash it down....!
Is silver not the same price as 9 years ago? Is gold not 35% lower after 5 years? Sure, gold has doubled in 10 years, thats 7% per year. Im glad its kept pace with other forms of "insurance" as it has a tendency not to.
Its fun to pick and choose dates and time frames, but lets make it simple. Would your grandpappy been better off saving via the stock market or gold over his lifetime? And how about his grandpappy? Your grandkids will look back and wish you had other forms of "insurance".
Wouldnt it be nice if your 10,000 oz of silver gave you an additional 300 oz every year, as well as appreciate in price?
Knowledge is the enemy of fear