patrick.net

uomo_senza_nome says

Deleveraging can get very disorderly if not managed properly

Yes, it gets messy because you have to use smoke and mirrors to keep brutally expensive things expensive. So the squeeze play is on, housing, rents, tuition, food, commodities, the actual cost of living for all the produces, MUST GO UP - to keep the banking class capitalized.

I've never seen the upper echelons of the upper middle class work so hard to protect massive wealth in the hands of the few.

And they do this claiming they are liberal in nature. Laughable.

Mick Russom says

My cost of living budget has double in the last 10 years. Easily.

Rent, tuition, commodities, cost of repairs, transportation, bridge toll, goods, services, everything. I can pull out budgets from 10 years ago and today and clearly show for the same situation costs have doubles.

My salaries have not. I've done well, but no way its keeping pace with inflation.

Yep - that's exactly the problem for the majority of people.

My "rent" has actually gone down. In 1989 I paid $2,000 a month in mortgage payment and now I pay $1450 a month. I think our interest rate was 10 percent back then.

Mick Russom says

Yes, it gets messy because you have to use smoke and mirrors to keep brutally expensive things expensive.

I don't think that is the causality. The causality is extreme wealth disparity, which will lead to social and civil unrest if nothing is done about it. By keeping it orderly - I meant we resolve this problem of wealth disparity without wrecking the whole economy.

uomo_senza_nome says

I meant we resolve this problem of wealth disparity without wrecking the whole economy.

This has all happened before. Nothing will happen until the empire is burnt to the ground. What is scary is the WW3 scenario includes genomes sequenced in computers, hand and eye scanners, a worldwide network that "knows" who you are by how you behave on it, and leadership which is an illusion to the masses that works for the very forces The People wish to overcome.

This time it will be different. And when the new system arises form the ashes, freedom, liberty, choice will be a dream.

Think about the ending of Colossus, The Forbin Project, but with a real bastard computer that is inhumane, has hubris and is full of avarice running the show.

Colossus The Forbin Project showed us that the logical dictator , an all powerful computer, is against our nature. Despite being controlled in every way with total fairness and complete logic, people wanted to resist.

Think of controlling The People with Stalin. Now think of a Stalinist System where there are a group of ultra wealthy in charge of it.

That is the nightmare you are all going to wake up to. And this time, the restart you think is going to right the wrongs will be used to permanently enslave humanity.

mell says

Yep - that's exactly the problem for the majority of people.

But a certain group of sociopaths who have been permitted by the banksters and banking cabal to borrow our money and rent our leveraged properties back to us at a huge premium think Im a liar. They think its all good. The reason: rentier income makes the lazy people wealthy. And the banksters let these Kapo exist, and these people ENFORCE onto us. They live in either party. Politics is an illusion. In the end, the banksters need to let people believe that some of The People can "win" too so they let a few rise and leverage and play games with other people lives so they can run around and espouse that living off the backs of others is great, and you can do it too!

yet if everyone was a landlord, no one would own land, so there is always a ratio, landed gentry, and the wage slaves. Ultimately, those who are leveraging to rent to use dont really own the property, and they dont produce anything, but they suck they economy dry. Most of these people are skinflints that dont do improvements, and squeeze the working middle class for every penny.

Read one of the rental contracts the rats use. They owe you nothing in the end. If you get sick from prop 65 materials, not their fault. In fact, they can do pretty much anything they want without consequence. And most of them, the Landlords, have borrowed money you capitalize with your taxes and they rent your leveraged property back to you.

Its a terrible situation. No real fix. Now that billions of ill gotten china-dollars are flooding in the next landlords will not be someone with any vested interest that this culture, this way of life goes on.

You are being assimilated. You are paying them to assimilate you.

Sorry.

mell says

and there is a good degree of overlap.

Total overlap. Big banks get bigger. Megacorps get larger. Liberty is decreased. Freedom is decreased. Executive rulings by fiat. Standard of living drops. Government corruption continues. Lobbying unabated. The national political dialogue is perverted to keep the banking cabal and the extra-sovereign interests in place.

Those making unearned and rentier income seem happy with the status quo.

Total overlap.

uomo_senza_nome says

The only way rent seeking can be avoided is through public policy.

The problem is the rent seeking is a behavior allowed by the banking cabal to make certain members of the upper middle class wealthy via unearned and rentier income.

These become the highest members of the outer party.

Mick Russom says

For a lib you are certainly into money and markets

Do you have the impression that liberals aren't into money or markets??

Mick Russom says

The problem is the rent seeking is a behavior allowed by the banking cabal to make certain members of the upper middle class wealthy via unearned and rentier income.

These become the highest members of the outer party.

Not everything is because of bankers. Finance is one form of rent seeking, but there are several other forms as well.

For a proper primer on rent seeking, consider this paper.

As for your accusation on upper middle class, here's the actual data regarding income redistribution. Most gains go to the top 1%.

tatupu70 says

Mick Russom says

For a lib you are certainly into money and markets

Do you have the impression that liberals aren't into money or markets??

This is not the issue - but it's the ridiculous notion that the current problems SOME face are due to certain party politics. Driving the deficit and inflation up has been practised under Obummer and Dubya. Nothing has changed here. So they are into money but not into free markets which have been abandoned long ago.

You all worship Paul Krugman's penis and have erotic dreams about Turbo Timmy, Helicopter Ben and the rest of the banking cabal, left and right. I have no problem with that reality, just admit it and don't pretend to be fighting for the "small guy", alright? ;)

Mick Russom says

And printing is causes a vile class of rentiers who buy up property using
leverage with printed money (drawn from the working folks) and selling via rent
these rotting houses with mold, asbestos, toxins back at a premium to
victims/renters.

Why aren't you aiming this type of diatribe at the local supermarket or grocer? Obviously, you have more potential landlords to choose from than local supermarkets and grocers. People stay in sub-par housing only because they are not able to find better housing (including location, a critical factor for the consumer of housing service) for less money. In a typical town, the only monopolistic landlord is actually the town, which collects tax at a rate that all landlords have to pay therefore able to pass the cost (of tax) to the renters. Everthing that the individual landlord has control over and deliver as service, the tenant can shop around.

Mick Russom says

yet if everyone was a landlord, no one would own land, so there is always a
ratio, landed gentry, and the wage slaves. Ultimately, those who are leveraging
to rent to use dont really own the property, and they dont produce anything, but
they suck they economy dry. Most of these people are skinflints that dont do
improvements, and squeeze the working middle class for every penny.

The idea that somehow houses can be run without repairs and maintenance is probably one of the big reasons why those helped by government sponsored near-zero down payment programs into homes end up losing homes.

Housing service providers provide a very valuable service: housing. The maintenance and repair work entails far more physically productive work than a grocer does for his stock of apples, or even the sandwich shop owner turning $1.50 of ingredients into a $5 sandwich. The consumer of housing service typically have far more service providers to choose from than when he is buying an apple or a sandwich in the same town.

Mick Russom says

I have no unearned income and a relative mountain of savings that you and the
deficiters and debters keep trying to erode through inflation

If you really have a mountain of savings, even at 0.25%, there has to be unearned income. There are other places where the return would be higher than 0.25%. Some entail relatively small risks, others bigger risks: bonds, stocks, direct ownership of businesses . . . including even what you hate, rental property ownership. All of them are forms of productive asset, yielding what is essentially a dividend, at varying degrees of risk to the capital itself. Usually for the same asset, the lower the acquisition cost the lower the risk.

The federal reserve notes are just chips at the casino. Not sure why you insists on parking your wealth in those chips.

Reality says

Housing service providers provide a very valuable service: housing

My experience is this: the landlords will let tenants stew in filth and only renovate on turnover to raise the rents and then let the new tenant rot.

This becomes far more of an issue when the landlord is a managment company.

I also think that handing out money capitalized by public means so that landlords can leverage that to provide "housing as a service" lol to make themselves rich and making housing further out of the reach of the middle class is counter productive.

But hey, the power brokers are the bankers and those who play bankers. Goes back to how the board game monopoly is played with the landed gentry bradishing a fat middle finger to the rest of the players.

Reality says

If you really have a mountain of savings, even at 0.25%, there has to be unearned income.

Yes, negative unearned income. If the saved money has erosion in purchasing power one should be able to claim a loss like the gamblers with stocks get to, not get taxed on interest as income.

Reality says

The federal reserve notes are just chips at the casino

Nobody would play with and for chips is they didnt reliably indicate an index of wealth.

People who have to protect the future due to having families and responsibility are risk averse, and would like to save up to elimiate the pressures of rents, and to try and anticipate unforseen issues.

If you cant see how killing people's savings through inflation hurts the average Joe then I dont know what to tell you. The idea is to get people to play at the casino, and if they use need government assistance.

Who is promoting save up, be self reliant, get and stay out of debt and eliminate all debts before "investng." Why invest if you have a negative net worth? its like using a credit card at the casino to gamble. Its a joke.

Some of these neg--net-worth people lease BMWs to look rich, its really quite laughable.

And they are borrowing this existence beyond their means and they kick the can down the road, the next generation will pick up the tab.

Lol. Lets see.

Reality says

The goods basket chosen for measuring price indices is far more subjective to the data collector's whim and far more complicated than money supply

Commodities price index. And they do things like re-base the currency year used. The government does things like change out steak for ground beef. Its usually a lot worse than indicated. Regular people with responsibility and budget know the cost of living is going up faster than pay.

uomo_senza_nome says

Most gains go to the top 1%.

More like the 0.01%.

The upper middle class is trying to get into that club. Even the upper classes. Its quite exclusive though. They do however admit new members here and there to keep the dream of being an oligarch alive.

Reality says

Why aren't you aiming this type of diatribe at the local supermarket or grocer?

I belong to several food co-ops and buy through local markets. The prison-planet-government is doing everything in its Monsanto-power to make sure your ONLY get your food from the local supermarket.

You best be checking who you Monsanto-Elect, even in "lib" california, before you complan to me oof the damage you are doing to the food supply.

tatupu70 says

Do you have the impression that liberals aren't into money or markets??

1960s version? More into freeedom, liberty, the open road, some free love and some drugs if need be. Throw in some SDS leftism. Never got the sense they like big government, monsanto, police state, rules and laws everywhere, etc.

The 2012 version? All they care about is money, but need to appear like they dont. They will vote for monsanto and a police state to protect their interests but try to appear as free wheelin.

I would say classical liberalism is dead, and the maoist version has taken over.

mell says

You all worship Paul Krugman's penis and have erotic dreams about Turbo Timmy, Helicopter Ben and the rest of the banking cabal, left and right. I have no problem with that reality, just admit it and don't pretend to be fighting for the "small guy", alright? ;)

Yep. They cant admit that though. It forces them to be honest with themselves.

Mick Russom says

1960s version? More into freeedom, liberty, the open road, some free love and
some drugs if need be. Throw in some SDS leftism. Never got the sense they like
big government, monsanto, police state, rules and laws everywhere, etc.

The 2012 version? All they care about is money, but need to appear like they
dont. They will vote for monsanto and a police state to protect their interests
but try to appear as free wheelin.

I would say classical liberalism is dead, and the maoist version has taken
over.

So are you saying having money and making smart investment decisions is maoist?

lostand confused says

So are you saying having money and making smart investment decisions is maoist?

He appears to think the 'Communist' Party of China is still considered Maoist.

Mick Russom says

My experience is this: the landlords will let tenants stew in filth and only renovate on turnover to raise the rents and then let the new tenant rot.

Rents can both rise and fall. Over the past two decades, I have rented (as a tenant) anything from a $300/mo tiny room to $2500/mo 5BR single family house. I got into the single-family house that the landlord had just spent $100k on renovating and asked for $2700/mo; I got it at a negotiated price of $2100/mo. After I moved in, I learned from the previous tenant that they had been paying $2200/mo. So the landlord essentially wasted $100k expanding a 1400sqft house to 2200sqft and finishing the cathedral ceiling with recess lights. In the subsequent 6+ years, the rent gradually rose to $2500, at which point I decided to buy my own house, and the then the landlord finally got his $2700 target price from the next tenant. During the same span of 6.5years, gold price went from just over $400 to well over $1600. In other words, effective rent went from 5 ozt to 1.5 ozt.

p>This becomes far more of an issue when the landlord is a managment company.

Well, the management company employees don't work for free. If the management company had been government, like so many eastern bloc country had when they outlawed private "landlords," the management expense would be even higher. IMHO, private entreprenuerial housing service providers in competition with each other produce the most cost effective way of providing housing service to people who are not yet ready to take the plunge and own their own homes. There are numerous reasons why people prefer not to own their own homes, including cost expectations, job mobility and even lack of time to take care of house because focusing on the primary job might be more profitable than taking care of even one's own home.

I also think that handing out money capitalized by public means so that landlords can leverage that to provide "housing as a service" lol to make themselves rich and making housing further out of the reach of the middle class is counter productive.

I don't think they lend money to "landlords" any more than lend money to any other existing business (including builders that provide competition on the supply side). There are no special loans for "landlords." In fact, they hand out far more money to the "competition" on the demand side: helping people buying their first homes involves far more government subsidy, to a far greater extent than government subsidy to small businesses and family "first business" that provide comparable competition to existing employees.

Mick Russom says

Yes, negative unearned income. If the saved money has erosion in purchasing power one should be able to claim a loss like the gamblers with stocks get to, not get taxed on interest as income.

Stock owners can't claim loss due to currency depreciation either. Nobody can under existing law. In fact, if one were to trade the dollar to another currency that depreciates less over time then trade back, the nominal gain would still be taxed. That is IMHO, the real reason why they depreciate the currency: to collect more taxes.

Mick Russom says

People who have to protect the future due to having families and responsibility are risk averse, and would like to save up to elimiate the pressures of rents, and to try and anticipate unforseen issues. If you cant see how killing people's savings through inflation hurts the average Joe then I dont know what to tell you.

Don't get me wrong: I'm not at all being unsympathetic. I used to be and still am a big time saver. For what it's worth, my cars are 10-15 years old, and I'm wearing a 10+years old leather jacket indoors as I type this post because I keep heat setting down. It's worth reminding that parking one's savings in the cash currency itself is essentially saying one has more faith in the government than in the private sector's productivity. There is a price to pay for keeping oneself 100% liquid: opportunity cost.

If fractional reserve banking were indeed outlawed, the full-reserve bank too would charge you a storage fee instead of paying you interest regardless what form of money you use.

Mick Russom says

Reality says

Why aren't you aiming this type of diatribe at the local supermarket or grocer?

I belong to several food co-ops and buy through local markets. The prison-planet-government is doing everything in its Monsanto-power to make sure your ONLY get your food from the local supermarket.

You best be checking who you Monsanto-Elect, even in "lib" california, before you complan to me oof the damage you are doing to the food supply.

I grow some of my own food too. It's tons of work. LOL. It's not possible to grow all of one's own food, for most people. My point was that, any retailer would have mark-up. It is the convenience that you are paying for. It is the division of labor that makes their goods/service more affordable to you even after the mark-up than if you had to put say clothing together from threads (never mind from cotton seeds!).

There are more competitors providing housing service than the retailing of almost any other goods/service in almost any given town. If one is not happy with a particular service provider, one can easily find another in the same town.

mell says

Yeah, because they are addicted to cheap credit and buying crap and because interest rates are kept artificially close to zero, Time to stop the looting and start the prosecuting.

No, actually it's because all the money is going to the top 1% and the bottom 50% are living paycheck to paycheck out of necessity.

tatupu70 says

mell says

Yeah, because they are addicted to cheap credit and buying crap and because interest rates are kept artificially close to zero, Time to stop the looting and start the prosecuting.

No, actually it's because all the money is going to the top 1% and the bottom 50% are living paycheck to paycheck out of necessity.

Same thing, chicken and egg. Stop the printing, let prices fall so there is leftover and let interest rates rise to tse leftover will be put into savings.

Mick Russom says

Who dismantled glass-steagall?

Nothing is more revealing than the answer to this question.
None of the egregeous frauds committed by the largest banks could have occurred if they had not bribed their way off the leash.
All of the damage since can be laid at the feet of Bill Clinton.

lostand confused says

So are you saying having money and making smart investment decisions is maoist?

No, its simple self interest. Stop trying to masquerade it as anything more.

Reality says

That is IMHO, the real reason why they depreciate the currency: to collect more taxes.

NAILED IT. Inflation is a regressive tax.

Reality says

For what it's worth, my cars are 10-15 years old, and I'm wearing a 10+years old leather jacket indoors as I type this post because I keep heat setting down

Same here. I save for my kids future.

mell says

Same thing, chicken and egg. Stop the printing, let prices fall so there is leftover and let interest rates rise to tse leftover will be put into savings.

Maybe that's what would happen in your fantasy world, but here in the real world, prices might fall as more and more people lost their jobs. Not sure how that is a good thing. There would be no leftover because more and more people have nothing.

tatupu70 says

Maybe that's what would happen in your fantasy world, but here in the real world, prices might fall as more and more people lost their jobs. Not sure how that is a good thing. There would be no leftover because more and more people have nothing.

Linking price level (inflation) to jobs (employment/unemployment) is essentially re-stating the Phillips Curve theory, which has long been discredited. Prices falling is usually the result of productivity increase, for example the computer prices have always been falling for the last half century, but the industry has not been experiencing massive job losses for all those decades.

In real life, nothing really gets "leftover" but as prices fall enable people to maintain existing standards of living at lower cost, that in turn makes capital available for investment so that productivity can increase and start the next round of bringing forth new products and services as well as price cuts on existing goods and services. That's how free exchanges amongst individual human beings enhances standards of living.

The central bank inflation process, claiming to target "price stability" for an arbitrary goods/service basket, essentially tries to steal the bulk if not all the free market productivity increase for its real master the big banks: via debt service on conjured up money.

Newly create money does not reach everyone in the society all at once. Those who get it first gain at the expense at those who get it later because the former spends the money against the old price structure whereas the latter has to pay up for the new price levels as the inflation caused by the new money has already propagated through. Because the central bank hands out money primarily to the government and the big inefficient banks first, the result is shifting society resources from the more efficient and more productive small business and individual sector to the bureaucratic government and big-business sector. We already know that small and new businesses are the primary generator of jobs (those not efficient at it simply give up the human resources to others that can do better; that's the key, unprofitable ones don't stay in business wasting resources). Big old businesses and government are net job destroyers in the long run (they consume more than they produce). The central bank intervention forcibly shifting resources from the net-plus sectors to the net-minus sectors is where the overall job losses and poverty come from.

Reality says

Linking price level (inflation) to jobs (employment/unemployment) is essentially re-stating the Phillips Curve theory, which has long been discredited. Prices falling is usually the result of productivity increase, for example the computer prices have always been falling for the last half century, but the industry has not been experiencing massive job losses for all those decades.

Except that your example specifically made reference to reducing the money supply--not increased productivity.

tatupu70 says

Reality says

Linking price level (inflation) to jobs (employment/unemployment) is essentially re-stating the Phillips Curve theory, which has long been discredited. Prices falling is usually the result of productivity increase, for example the computer prices have always been falling for the last half century, but the industry has not been experiencing massive job losses for all those decades.

Except that your example specifically made reference to reducing the money supply--not increased productivity.

You might have confused me with someone else. The example I gave was regarding the computer industry, which is a classic example of productivity increase driving down price.

In any case, stop handing out newly printed money to inefficient government central planning agencies would automatically increase productivity. When the FED expands money supply, it does not go to everyone in the society all at once. It is the political cronies that get the new money first. That in itself produces inefficiency. If the money supply expansion stops, the central planning is reduced, and the productivity would increase as the resources are not taken from the productive private enterprise to feed the cronies flashing newly printed money.

Reality says

You might have confused me with someone else. The example I gave was regarding the computer industry, which is a classic example of productivity increase driving down price.

True--but the text you quoted was replying to another post (which was copied). Before you replied to me, you should have understood the context.

Reality says

In any case, stop handing out newly printed money to inefficient government central planning agencies would automatically increase productivity. When the FED expands money supply, it does not go to everyone in the society all at once. It is the political cronies that get the new money first. That in itself produces inefficiency.

The part about politicial cronies is debatable, but regardless--the answer is to stop cronyism, not shrink the money supply.