patrick.net

I'm waiting for them to start paying me to borrow money. :-)

Mark says

I'm waiting for them to start paying me to borrow money. :-)

I did get an offer from a credit card company....no interest for 16 months, and 1% rebate on all purchases.
I threw it away. I want more. :)

This is an Austrian Paradise developed world economy - no high interest, no inflation bugaboo, frozen wages - where's the prosperity?

indigenous says

When the reality of the market is "marked to market" it seems like that is going to be one hell of recession.

Housing prices are well off their bottom--you really think mark to market will make much difference now?

thunderlips11 says

This is an Austrian Paradise developed world economy - no high interest, no inflation bugaboo, frozen wages - where's the prosperity?

Again with the economic illiteracy.

tatupu70 says

Housing prices are well off their bottom--you really think mark to market will make much difference now?

I'm talking about world wide fractional reserve banking that has blown gargantuan bubble in lots of thing.

indigenous says

I'm talking about world wide fractional reserve banking that has blown gargantuan bubble in lots of thing.

What does mark to market have to do with your above statement? Do you have any idea what you are talking about?

No, just call me Tat

indigenous says

No, just call me Tat

Good one. Can you explain what you mean or not?

tatupu70 says

Good one. Can you explain what you mean or not?

Probably not. But if we read the Summa Theologica, the apex of Human Reasoning, we might figure it out.

tatupu70 says

Can you explain what you mean or not?

thunderlips11 says

Probably not. But if we read the Summa Theologica, the apex of Human Reasoning, we might figure it out.

I'm saying the world is suffering from over valuation. I.E. China has empty cities, train stations, airports that all count as GDP. Japan has devalued their currency at the expense of it's citizens. The stock market is overvalued. The PIGS have over consumed without producing have caused a lot of debt.

this is damning evidence...

indigenous says

I'm saying the world is suffering from over valuation. I.E. China has empty cities, train stations, airports that all count as GDP. Japan has devalued their currency at the expense of it's citizens. The stock market is overvalued. The PIGS have over consumed without producing have caused a lot of debt.

SoftShell says

this is damning evidence...

lol.

tatupu70 says

ol.

Duck off mutt

Deflation is good for renters, savers, and investors, but bad for debtors and the merchants of debt. Alas, Swedish banks have sold most Swedes on debt, and that should cause concern.

Personally, I believe in freedom of choice, but I dislike hypocrisy. People who support inflation and oppose deflation should prove their sincerity:
1) when you see something advertised on sale, insist on paying full price;
2) when you see an item that costs less than in the past, e.g. gasoline, insist on paying the highest price you ever saw, plus the % you claim inflation should be;
3) pay to use PatNet.
For decades, people had to pay if they wanted this level of entertainment. Patrick gives it away free, and that's deflation. So, PAY UP.

But, don't insist on imposing inflation on everyone. Even if you insist on always paying more for everything, those of us who prefer deflation should have the same freedom to look for a good value.

curious2 says

Personally, I believe in freedom of choice, but I dislike hypocrisy. People who support inflation and oppose deflation should prove their sincerity

Fair enough--I hate hypocrisy as well. People who support deflation should prove their sincerity:
1. When your boss gives you a raise, politely decline and insist instead on taking a pay cut every year.
2. If your investments gain in value--give all the gains plus another 3% or so to charity. Make sure your investment value goes down each year.

I could go on, but I think the point is made. Deflation/inflation is really not that important. What matters is what's happening to real wages/real income. And there's nothing I've ever seen that indicates that real wages grow faster under deflation than under low to moderate inflation. If you have data showing otherwise, please share.

tatupu70 says

I could go on, but I think the point is made. Deflation/inflation is really not that important. What matters is what's happening to real wages/real income. And there's nothing I've ever seen that indicates that real wages grow faster under deflation than under low to moderate inflation. If you have data showing otherwise, please share.

Real wages in the post Civil-War America was rising at 2+% for half a century during a prolonged period of "deflation" (technological progress making prices lower). Whereas in the 43 years since the "closing of gold window"/default in 1971, "moderate inflation" in a pure fiat currency America has led to negative real wage growth for nearly half a century!

Reality says

Real wages in the post Civil-War America was rising at 2+% for half a century during a prolonged period of "deflation" (technological progress making prices lower). Whereas in the 43 years since the "closing of gold window"/default in 1971, "moderate inflation" in a pure fiat currency America has led to negative real wage growth for nearly half a century!

And then real wages performed great in the post WWII period up to mid to late 1970s under low to moderate inflation.

Perhaps there's another factor that influences the performance of real wages much more strongly than inflation?? You think?

tatupu70 says

And then real wages performed great in the post WWII period up to mid to late 1970s under low to moderate inflation.

Perhaps there's another factor that influences the performance of real wages much more strongly than inflation?? You think?

The post WWII to mid-60's (not 70's) was a deflationary period. The WWII consumer goods prices involved rationing, so those nominal prices were not real prices but have to factor in the black market price for ration coupons. As more and more imports came in from Europe and Japan, prices for consumer goods were gradually declining in the 50's and early 60's. Inflation only started to take hold in the mid to late 60's, with the War in Vietnam and "Great Society" war on the family and productive society. Besides, the "moderate inflation" the "PhD standard" envision nowadays is nothing like the alleged nominal post-WWII to mid-60's "inflation": as late as 1973, a 4% inflation was considered run-away-inflation. Whereas nowadays 3-4% is what the "brain trust" is trying to engineer.

Reality says

The post WWII to mid-60's (not 70's) was a deflationary period

No it wasn't. Here is a link to the data:

http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx?dsInflation_currentPage=5

Each year by month

1960 1.03 % 1.73 % 1.73 % 1.72 % 1.72 % 1.72 % 1.37 % 1.37 % 1.02 % 1.36 % 1.36 % 1.36 % 1.46 %
1959 1.40 % 1.05 % 0.35 % 0.35 % 0.35 % 0.69 % 0.69 % 1.04 % 1.38 % 1.73 % 1.38 % 1.73 % 1.01 %
1958 3.62 % 3.25 % 3.60 % 3.58 % 3.21 % 2.85 % 2.47 % 2.12 % 2.12 % 2.12 % 2.11 % 1.76 % 2.73 %
1957 2.99 % 3.36 % 3.73 % 3.72 % 3.70 % 3.31 % 3.28 % 3.66 % 3.28 % 2.91 % 3.27 % 2.90 % 3.34 %
1956 0.37 % 0.37 % 0.37 % 0.75 % 1.12 % 1.87 % 2.24 % 1.87 % 1.86 % 2.23 % 2.23 % 2.99 % 1.52 %
1955 -0.74 % -0.74 % -0.74 % -0.37 % -0.74 % -0.74 % -0.37 % -0.37 % 0.37 % 0.37 % 0.37 % 0.37 % -0.28 %
1954 1.13 % 1.51 % 1.13 % 0.75 % 0.75 % 0.37 % 0.37 % 0.00 % -0.37 % -0.74 % -0.37 % -0.74 % 0.32 %
1953 0.38 % 0.76 % 1.14 % 0.76 % 1.14 % 1.13 % 0.37 % 0.75 % 0.75 % 1.12 % 0.75 % 0.75 % 0.82 %
1952 4.33 % 2.33 % 1.94 % 2.33 % 1.93 % 2.32 % 3.09 % 3.09 % 2.30 % 1.91 % 1.14 % 0.75 % 2.29 %
1951 8.09 % 9.36 % 9.32 % 9.32 % 9.28 % 8.82 % 7.47 % 6.58 % 6.97 % 6.50 % 6.88 % 6.00 % 7.88 %
1950 -2.08 % -1.26 % -0.84 % -1.26 % -0.42 % -0.42 % 1.69 % 2.10 % 2.09 % 3.80 % 3.78 % 5.93 % 1.09 %
1949 1.27 % 1.28 % 1.71 % 0.42 % -0.42 % -0.83 % -2.87 % -2.86 % -2.45 % -2.87 % -1.65 % -2.07 % -0.95 %
1948 10.23 % 9.30 % 6.85 % 8.68 % 9.13 % 9.55 % 9.91 % 8.89 % 6.52 % 6.09 % 4.76 % 2.99 % 7.74 %
1947 18.13 % 18.78 % 19.67 % 19.02 % 18.38 % 17.65 % 12.12 % 11.39 % 12.75 % 10.58 % 8.45 % 8.84 % 14.65 %
1946 2.25 % 1.69 % 2.81 % 3.37 % 3.35 % 3.31 % 9.39 % 11.60 % 12.71 % 14.92 % 17.68 % 18.13 % 8.43 %
1945 2.30 % 2.30 % 2.30 % 1.71 % 2.29 % 2.84 % 2.26 % 2.26 % 2.26 % 2.26 % 2.26 % 2.25 % 2.27 %

The only negative time periods were mid 1949 to mid 1950 and part of 1955. In 1951, inflation looked to be about 8% for the year.

I'm sure out of all of those decades, you would prefer to live in the decade with strong deflation--1930s.

As you can see, during the Post-WWII to 1960 period, except for the immediate post-WWII adjustment period and during Korean War (1951), the inflation rate was very low, with frequent bouts of deflation! Let's not forget the methodology used back then was not the same as today's but the one before the early Clinton era modifications; that modification was supposed to have removed 1.5%-2% that the old methodology was "overstating" inflation due to not indulging in "Hedonic Adjustment." So by today's methodology, most of those quarters during post WWII to 1960, aside from immediate post WWII adjustment period and Korean War, would be near-zero or negative inflation! i.e. deflationary most of the time.

tatupu70 says

I'm sure out of all of those decades, you would prefer to live in the decade with strong deflation--1930s.

I'm sure you prefer to bury you head up your ass. That's a statement possessing greater validity than what you just stated.

Notice the rapid growth 1920's was a deflationary period. The problem with 1930's was not inflation or deflation per se, but government meddling preventing the market from clearing, contrary to the 1920's rapid adjustment to post-WWI.

Reality says

As you can see, during the Post-WWII to 1960 period, except for the immediate post-WWII adjustment period and during Korean War (1951), the inflation rate was very low, with frequent bouts of deflation! Let's not forget the methodology used back then was not the same as today's but the one before the early Clinton era modifications; that modification was supposed to have removed 1.5%-2% that the old methodology was "overstating" inflation due to not indulging in "Hedonic Adjustment." So by today's methodology, most of those quarters during post WWII to 1960, aside from immediate post WWII adjustment period and Korean War, would be near-zero or negative inflation! i.e. deflationary most of the time.

Of course--when the data doesn't agree with your BS, the data is incorrect. The 1950s decade inflation rate was 2.04%. The 2000s decade was 2.56%. I think that pretty much says it all.

Reality says

Notice the rapid growth 1920's was a deflationary period. The problem with 1930's was not inflation or deflation per se, but government meddling preventing the market from clearing, contrary to the 1920's rapid adjustment to post-WWI.

Well, you're agreeing with my point then. Inflation or deflation is really not the important factor.

tatupu70 says

Notice the rapid growth 1920's was a deflationary period. The problem with 1930's was not inflation or deflation per se, but government meddling preventing the market from clearing, contrary to the 1920's rapid adjustment to post-WWI.

Well, you're agreeing with my point then. Inflation or deflation is really not the important factor.

In the post-1971 pure fiat era inflation is the primary tool for government meddling and disruption of the economy. The result is disastrous: nearly half century of no growth to negative growth in real wages for the overwhelming majority segments of the population.

tatupu70 says

Of course--when the data doesn't agree with your BS, the data is incorrect. The 1950s decade inflation rate was 2.04%. The 2000s decade was 2.56%. I think that pretty much says it all.

Nope. These two data points were derived from different methodologies that have 1.5% to 2% stated difference, hence not directly comparable to each other. In other words, the 1950's inflation using post Clinton Era methodology would be 0.04% to 0.54%; factoring out the Korean War in 1951, the result would be negative inflation!

You might say war is financed by inflation? Imagine that now a overall deflationary pressure with war going on at the same time.

Reality says

Real wages in the post Civil-War America was rising at 2+% for half a century during a prolonged period of "deflation" (technological progress making prices lower).

The only source I found shows non-farm labor index at 178 in 1870 decreasing to 152 in 1880, then increasing slightly to 154 in 1889 and 157 in 1899. That doesn't look at a 2%/year gain in real wages to me.

www.nber.org/chapters/c2486.pdf

In life, if you have no haters, you are being far too meek.

tatupu70 says

Reality says

Real wages in the post Civil-War America was rising at 2+% for half a century during a prolonged period of "deflation" (technological progress making prices lower).

The only source I found shows non-farm labor index at 178 in 1870 decreasing to 152 in 1880, then increasing slightly to 154 in 1889 and 157 in 1899. That doesn't look at a 2%/year gain in real wages to me.

www.nber.org/chapters/c2486.pdf

You are out of your mind if you think the real income growth during the "Guilded Age" that drew millions of European immigrants to the US was less than 2% per year. You idiots have no basic knowledge of history or economic common sense.

Reality says

You are out of your mind if you think the real income growth during the "Guilded Age" that drew millions of European immigrants to the US was less than 2% per year. You idiots have no basic knowledge of history or economic common sense.

Feel free to post another source of data. I was just curious what the growth of real wages was in that time period so I figured I'd actually, you know, look up some data.

tatupu70 says

You are out of your mind if you think the real income growth during the "Guilded Age" that drew millions of European immigrants to the US was less than 2% per year. You idiots have no basic knowledge of history or economic common sense.

Feel free to post another source of data. I was just curious what the growth of real wages was in that time period so I figured I'd actually, you know, look up some data.

First clue of your problem: you were looking up non-farm labor, for a time period when the vast majority (close to 80% of the population at the beginning of that time period) were farmers!

You idiots are experts at citing nonsense and useless data.

Reality says

First clue of your problem: you were looking up non-farm labor, for a time period when the vast majority (close to 80% of the population at the beginning of that time period) were farmers!

Sactly

Reality says

First clue of your problem: you were looking up non-farm labor, for a time period when the vast majority (close to 80% of the population at the beginning of that time period) were farmers!

You idiots are experts at citing nonsense and useless data.

You clearly didn't read the source. Farm labor index went from 127 in 1860 to 129 in 1870, to 108 in 1880, to 129 in 1890, to 135 in 1899. Again, not exactly 2%/year growth there...

Again, I'm open to other sources of data if you have any. But it's definitely not an issue of farm vs. non-farm.

Reality says

First clue of your problem: you were looking up non-farm labor, for a time period when the vast majority (close to 80% of the population at the beginning of that time period) were farmers!

Total rural population in the 20s was closer to 50%.

The percentage of the population engaged in Agriculture in the 1920s was only about a quarter of the workforce.

tatupu70 says

I could go on, but I think the point is made.

Yes, you do go on, and your point is made: you are a troll. As has been pointed out to you several times, inflation/deflation refers to CPI, which is the Consumer Price Index. Wages and investments are not part of the CPI, and the vast majority are not even pegged directly to it. (Exceptions include government employee union contracts, which may include a COLA, but even that does not mean the employees benefit from inflation; if their tax brackets or other means-tested costs are not likewise indexed, even those employees with a COLA may be worse off with inflation.) So, your examples do not apply, as you know, and yet you go on using them.

tatupu70 says

you would prefer to live in the decade with strong deflation--1930s.

"post hoc ergo propter hoc" - again, you insist on conflating correlation with causation, in this case actually reversing cause and effect. Deflation was a symptom of the Depression, but not the cause. Your proposed remedy reminds me of medieval medicine where physicians practiced bleeding, because the patient's symptoms must have something to do with "bad blood."

curious2 says

As has been pointed out to you several times, inflation/deflation refers to CPI, which is the Consumer Price Index. Wages and investments are not part of the CPI, and the vast majority are not even pegged directly to it. (Exceptions include government employee union contracts, which may include a COLA, but even that does not mean the employees benefit from inflation; if their tax brackets or other means-tested costs are not likewise indexed, even those employees with a COLA may be worse off with inflation.) So, your examples do not apply, as you know, and yet you go on using them.

And as has been pointed out to you several times, the reason intelligent people don't want deflation is because of what it does to wages and employment. You can continue to post your ridiculous strawman arguments about why some people want inflation as if there's anyone in the world that prefers to pay higher prices. The only troll is you, my friend.

curious2 says

"post hoc ergo propter hoc" - again, you insist on conflating correlation with causation, in this case actually reversing cause and effect. Deflation was a symptom of the Depression, but not the cause. Your proposed remedy reminds me of medieval medicine where physicians practiced bleeding, because the patient's symptoms must have something to do with "bad blood."

As I pointed out to you on many previous occasions, I don't conflate correlation and causation, I simply point out that if you want deflation, you'll get the same correlation now. So by cheering for deflation, you are actually cheering for lower wages and higher unemployment.

thunderlips11 says

First clue of your problem: you were looking up non-farm labor, for a time period when the vast majority (close to 80% of the population at the beginning of that time period) were farmers!

Total rural population in the 20s was closer to 50%.

As you can see, the rural population was 60% in 1900. Regressing from the data series, what do you think the number was around 1865-1870? The beginning of the time period that I was referencing (The half century from 1865 to 1914). Apparently you didn't understand what "the Guilded Age" was; No, it was not "the roaring 20's." LOL.