Friday, May 29, 2009
Either wages must come up or prices must come down. Conservatives want to give us lending and credit to make up for the difference between wages and prices and "liberals," or what I like to call neo-liberals, want to avoid the wage issue too and give us government spending. Where do they think the tax money comes from to pay for all of this spending? Doesn't it come from.... wages?
But I don't see wages going up any time soon...except maybe for the rich. No, the only thing I see are falling prices. There's no other way out but to deflate this overly-inflated economy. Home prices, car prices, college costs, luxury items at the mall...everything that was being purchased on time before this mess began must come down.
Conservatives push credit in order to make up for stagnant wages and "liberals" push government spending--spending derived from tax money that is taken from, you guessed it...wages.
This is about wages. Period. Either prices have to come down or wages have to go up. Bottom line.
Then, after the economy continues to weaken, they'll start to come to the realization that the problem is a little deeper than just frozen credit markets.
Thursday, May 28, 2009
This is exactly why I didn't like the idea of giving money to the banks anyway. Not only do they appear to be ungrateful, but they're convinced that the worst is over.
It's only just beginning.
Wednesday, May 27, 2009
Monday, May 25, 2009
If the wages aren't there to pay for the loans and the loans can't be sold to a third party investment entity, what else can we expect except a reluctance to lend? We'll see a sort of "official" recognition of this reality in America soon. But what the hell is so wrong with admitting this?
Friday, May 22, 2009
And as long as banks continue to not lend, demand will continue to fall. We are headed for a deflationary spiral, if we're not already in one. Banks won't lend because they see how truly stagnant our wages are and wages won't go up because consumers want the cheapest product.
We may have some commodity-based inflation due to a weaker dollar driven by government debt, but even mighty oil succumbed to weak demand after last summer.
Wednesday, May 20, 2009
Tuesday, May 19, 2009
Why don’t we have income? No job.
Why don’t we have a job? Slowdown in consumer spending.
Why is there a slowdown in consumer spending? Reduction of buying power.
Why is there a reduction in buying power? The credit squeeze.
Why did we need credit anyway? Inflation-adjusted wages have been stagnant since the 1970’s.
Why are wages stagnant? Producers have sought to keep labor costs low, shipping jobs overseas and cutting prices.
Why is there so much pressure on producers to keep costs low? The consumer wants the cheapest product because the consumer is being squeezed by….STAGNANT WAGES!
Well why are wages stagnant? Cost pressures on producers. Why cost pressures? Stagnant wages… And down the spiral we go.
Everyone keeps asking, “Where’s the bottom?” There is no bottom. This is a fundamental restructuring of the economy. People are going to have to rely on one another more. Community is definitely part of the solution. Be thankful we don’t have to live like people in third world nations, where everything is shared.
Monday, May 18, 2009
Sunday, May 17, 2009
Wait a minute...wasn't I reading something about how many business loans were being made?
Saturday, May 16, 2009
A house could easily be replaced by a rented apartment or a mobile home that you could save money for. They could say that people who don't pay their bills on time would find it hard to find an apartment. But as long as I have money coming in from some kind of a job, why should a landlady care if she's looking for any tenants she can get?
What's wrong with moving closer to work, walking, a bicycle or public transportation?
I happen to think that I shouldn't have to pay for a college education. I think that it should be paid for with tax dollars.
And do you REALLY need to buy luxury items at the shopping mall?
So you see....we don't need credit to survive. All of this credit was introduced into the economy as a means to help facilitate globalization. The long credit-fueled consumer binge in the United States has helped to give billions of jobs to third world countries, but it has also perpetuated the stagnant wages that has existed in the American economy since the 1970's. We now have people in Walmart making low wages helping to sell items that are made by people...making low wages. You only get what you give. This is the future.
So stop worrying about the fine china. The Titanic is sinking and it's only a matter of time before the rumors are confirmed.
Stop trying to save your credit record because we're headed for a world where a credit rating is irrelevant. THAT is why I created this blog...to get you, the consumer-citizen, to understand that.
Wednesday, May 13, 2009
Tuesday, May 12, 2009
Monday, May 11, 2009
Maybe China going into deflation isn't really anything to worry about being that China was doing 5 to 6 percent annual growth anyway, but it certainly confirms a trend that will be reinforced when the PPI and CPI come out near the end of this week.
Friday, May 8, 2009
The professor and former financial regulator foresees another wave of foreclosures and future bank losses of more than $2.5 trillion vs. the government's $599 billion estimate.In the 60 Minutes video on the right, Whitney Tilson says about $1 trillion in Alt-As and $500 billion in Option ARMs. If the government "tested" the banks on the assumption of a much lower total amount of Option ARMs and Alt-As than what's actually out there, then how reliable can this stress test be?
Tuesday, May 5, 2009
Monday, May 4, 2009
No matter what it is that you do, there's always someone who can do it for cheaper, better and faster. The American economy was shielded from this reality for a long time, but not any longer. As a result of this, we've experienced a downward pressure on wages and revenue. This has, in turn, increased the disproportionate use of credit.
What part of this do we not understand?
Tokyo, May 1 - Japna has edged back into deflation, less than two years after it last escaped it, and joblessness is rising at a record rate, adding to the strains for the Japanese economy even as hard-hit manufacturers shows signs of stabilising. Analysts expect deflation to accelerate to a record rate in coming months as the worst global recession in 60 years forces companies to cut prices, on top of sharp falls in commodity prices.
And as long as the banks continue to tighten lending, deflation will remain a very big threat in this country.
Saturday, May 2, 2009
Baucus of Montana
Bennet of Colorado
Byrd of West Virginia
Carper of Delaware
Dorgan of North Dakota
Johnson of South Dakota
Landrieu of Louisiana
Lincoln of Arkansas
Nelson of Nebraska
Pryor of Arkansas
Specter of Pennsylvania
Tester of Montana