Has the debt economy reached its limit? Solutions?

[Walt]

1. Big-ticket expenses such as rent, healthcare, and higher education - expenses that run into the thousands or tens of thousands of dollars annually - are severely underweighted or mis-reported. While rents are soared, the CPI uses an arcane (and misleading) measure of housing costs: owners' equivalent rent. Why not just measure actual rents paid and actual mortgages/property taxes/home insurance premiums paid?

Healthcare is 18% of GDP but only 8.5% of CPI. To those exposed to actual costs of healthcare, 8.5% of the CPI is a joke.

The same can be said of higher education: households paying tuition and other college costs are exposed to horrendously high rates of inflation, as illustrated in this chart:

Someone receiving Social Security is almost always receiving Medicare(discounted supplemental, and drug insurance). That means most of their healthcare costs, especially the high end stuff going up most in price is covered by the government. That is why Medicare cost to the taxpayers rises faster than inflation. Raising Social Security makes no sense based on the total healthcare share of the economy, but rather the average Social Security recipient share.

Most retired people have already paid off their mortgage. If they are buying a new house, it is to downsize. They are more likely to have a huge income from higher house prices than to have a huge loss. And they are allowed to keep that income once tax free. Even if they just rent, their rent is often stabilized.

As for education, I am not saying no retired people are going to college, but very few are. Even those that do go to college often get huge discounts.

I do agree the basket should be more tuned to retired people than the current basket which actually is for urban office workers. But I think that would actually decrease Social Security increases, not increase it. The major things rising faster than average inflation are overemphisized.

 

[goat]

Someone receiving Social Security is almost always receiving Medicare(discounted supplemental, and drug insurance). That means most of their healthcare costs, especially the high end stuff going up most in price is covered by the government. That is why Medicare cost to the taxpayers rises faster than inflation. Raising Social Security makes no sense based on the total healthcare share of the economy, but rather the average Social Security recipient share.

Most retired people have already paid off their mortgage. If they are buying a new house, it is to downsize. They are more likely to have a huge income from higher house prices than to have a huge loss. And they are allowed to keep that income once tax free. Even if they just rent, their rent is often stabilized.

As for education, I am not saying no retired people are going to college, but very few are. Even those that do go to college often get huge discounts.

I do agree the basket should be more tuned to retired people than the current basket which actually is for urban office workers. But I think that would actually decrease Social Security increases, not increase it. The major things rising faster than average inflation are overemphisized.

Can we agree that real inflation is close to or at 10%? Some sites are showing inflation as high as 15% to 18%, and projecting it to be at 20% in a year or two.

 

[goat]

Where'd all my friends go? Don't make me post down in JPP Jeopardy.

 

[Jolly]

It does seem like the economy are very close to falling apart. Inflation is high and will continue higher but Federal Reserve sems to be powerless.

In our economy debt must grow. Only new debt can pay for old debt. At some point debt can not be repayed.

Historically there have been debt jubilees where all debts are cancelled by the ruler. In the Torah debts are to be forgiven every 7 years.

So a new system is necessary.

Certianly, however those inpower are only interested in new systems that maintain there positions.

Something with much more control over each individual.

Well that's not a given, there are many ways to form a new system, more centralised control over the population has far more negatives then positives.

People have to live in fear so they do not revolt when their standard of living plummets. The few that are left because they do not want billions of people. Something similar to Chinas social credits. And only digital currencies so everyone will know they are watched in real time.


But Covid fascism is not working well enough for them.

So my question is, can war be a solution for them?

Sadly has been historically.

A larger one where people feel that fascism/communism is nothing in comparison. Because i am spiritually told that some in the Biden administration want war.

Sure some do but it's not politics that is pushing it, these desires are coming from the corporate sectors as usual, and politics serves those interests.

Also please discuss solutions. If we have reached the limit for the debt economy can we through cooperation between the larger nations cancel debts without turmoil in markets?

Ofcourse you can but the banks want turmoil, every house foreclosed is taken by the bank, every country that goes bankrupt is then sanctioned and has new rules imposed by thise same interests, Greece is a perfect example of what the banking community would like to do with every country.

The problem for them may be that in such a solution they lose influence

Sure. But reason and logic can do a lot to drive a better future.

 

[Jolly]

Can we agree that real inflation is close to or at 10%? Some sites are showing inflation as high as 15% to 18%, and projecting it to be at 20% in a year or two.

They want inflation as a means to reduce the debts.

 

[goat]

They want inflation as a means to reduce the debts.

To the point when the dollar is worthless.

BTW, Welcome.

 

[goat]

It does seem like the economy are very close to falling apart. Inflation is high and will continue higher but Federal Reserve sems to be powerless.

In our economy debt must grow. Only new debt can pay for old debt. At some point debt can not be repayed.

So a new system is necessary. Something with much more control over each individual. People have to live in fear so they do not revolt when their standard of living plummets. The few that are left because they do not want billions of people. Something similar to Chinas social credits. And only digital currencies so everyone will know they are watched in real time.


But Covid fascism is not working well enough for them.

So my question is, can war be a solution for them? A larger one where people feel that fascism/communism is nothing in comparison. Because i am spiritually told that some in the Biden administration want war.

Also please discuss solutions. If we have reached the limit for the debt economy can we through cooperation between the larger nations cancel debts without turmoil in markets? The problem for them may be that in such a solution they will lose influence.

6.5 minutes of your time.

 

[Walt]

Can we agree that real inflation is close to or at 10%?

Real inflation has been one point lower than headline inflation, so maybe 0% or 1% for the last decade. It has certainly not been even close to 10%.

Some sites are showing inflation as high as 15% to 18%, and projecting it to be at 20% in a year or two.

If that were true, interest rates would need to be 30% or higher... And they are somewhere between -1% to 4% depending on the borrower. The cost of money is about zero percent.

You will always be able to find a conspiracy website that predicts inflation is much higher. But, reality is you would be hard pressed to find even one component of inflation that has been above 10%, much less the entire thing.

 

[goat]

Real inflation has been one point lower than headline inflation, so maybe 0% or 1% for the last decade. It has certainly not been even close to 10%.



If that were true, interest rates would need to be 30% or higher... And they are somewhere between -1% to 4% depending on the borrower. The cost of money is about zero percent.

You will always be able to find a conspiracy website that predicts inflation is much higher. But, reality is you would be hard pressed to find even one component of inflation that has been above 10%, much less the entire thing.

Year-to-Year April 2021 ShadowStats Alternate CPI (1980 Base) Inflation jumped to a thirteen-year high of 12.1%, up from 10.4% in March 2021, 9.4% in February 2021 and against 9.1% in January 2021.

 

[Walt]

Year-to-Year April 2021 ShadowStats Alternate CPI (1980 Base) Inflation jumped to a thirteen-year high of 12.1%, up from 10.4% in March 2021, 9.4% in February 2021 and against 9.1% in January 2021.

The vast majority of economist point out Williams' numbers are "implausibly high", and lead to "easily disproven and absurd conclusions." For instance, you would have to believe that lenders have lost over 90% of their assets to inflation over the last 30 years, and yet have survived just fine. If any business keeps losing money at that rate, it will collapse.

 

[goat]

The vast majority of economist point out Williams' numbers are "implausibly high", and lead to "easily disproven and absurd conclusions." For instance, you would have to believe that lenders have lost over 90% of their assets to inflation over the last 30 years, and yet have survived just fine. If any business keeps losing money at that rate, it will collapse.

ShadowStats Alternate CPI goes off the 1980 Base on actual costs of living. Lenders create currency out of thin air. There is more debt than there is currency. Real inflation has already gone up 3% in 2021. That projection has a possibility of hitting 20% real inflation by the end of 2021.

 

[Walt]

ShadowStats Alternate CPI goes off the 1980 Base on actual costs of living. Lenders create currency out of thin air. There is more debt than there is currency. Real inflation has already gone up 3% in 2021. That projection has a possibility of hitting 20% real inflation by the end of 2021.

You have investors losing 90% of their money, and somehow not feeling it at all. That is implausible to say the least.

 

[goat]

You have investors losing 90% of their money, and somehow not feeling it at all. That is implausible to say the least.

The top 10% of investors are not affected by the actual costs of living. You're distorting how the CPI works to push the middle class into poverty.

 

[T. A. Gardner]

One possible solution is to grow the economy. The quickest way is to lower some taxes a bit, or keep them low, end new social welfare spending and add no more programs of this sort. At the same time, reduce government spending paring some programs or eliminating them. Minimize new regulations and start to streamline and reduce those in place.
Stop pushing fads and instead push what works like in the energy sector nuclear and natural gas for electrical generation. Push for fuel cell vehicles running on hydrogen or ammonia.

Let industry rebuild here rather than run it off. Stop trying to be the planet's policeman and reduce defense spending by pulling out of places like Europe that should almost entirely defend themselves. Let them spend on defense and wreck their economies...

Try to make friendly with Russia so there's a US-Russia versus China political triangle which is where the world's headed anyway so get Russia on our side rather than cozy with the Chinese.

That'd be a start.

 

[goat]

Lumber prices rose by more than 250% in the last year.
Healthcare has increased over 310% in the last four decades.
The cost of higher education has surged more than 538% since 1985.

 

[T. A. Gardner]

Lumber prices rose by more than 250% in the last year.
Healthcare has increased over 310% in the last four decades.
The cost of higher education has surged more than 538% since 1985.

The number one driver behind the skyrocketing cost of a college education is government. Here's a simple example to illustrate this:

The cost of a college class is say $100. The student is paying for that themselves. The government comes along and offers a low interest $100 loan to pay for the class. The college knowing this, raises the cost of the class to $200 because they know the student can pay $100 and the government will loan them the other $100. The college doesn't give a shit if the student is broke and up to their eyeballs in debt on graduating. That doesn't affect their bottom line.

While that's simplified, that's what's happened with college education. The government didn't make it easier for poor students to go to college, they just became another source of revenue for colleges.

 

[Truck Fump / h1b]

It does seem like the economy are very close to falling apart. Inflation is high and will continue higher but Federal Reserve sems to be powerless.

In our economy debt must grow. Only new debt can pay for old debt. At some point debt can not be repayed.

So a new system is necessary. Something with much more control over each individual. People have to live in fear so they do not revolt when their standard of living plummets. The few that are left because they do not want billions of people. Something similar to Chinas social credits. And only digital currencies so everyone will know they are watched in real time.


But Covid fascism is not working well enough for them.

So my question is, can war be a solution for them? A larger one where people feel that fascism/communism is nothing in comparison. Because i am spiritually told that some in the Biden administration want war.

Also please discuss solutions. If we have reached the limit for the debt economy can we through cooperation between the larger nations cancel debts without turmoil in markets? The problem for them may be that in such a solution they will lose influence.

https://twitter.com/x/status/1389696282957029377

fuck you and fuck china.

the fed is the creator of inflation.

barter economy is the solution. parasitic bankers and their brainwash victims hate that idea though.

 

[Joh17]

There is a theory that there can be a sharp rise in interest rates, but even that theory would mean there would have to be some rise in interest rates. Right now, interest rates are around historic lows. There is no evidence we are anywhere close to a limit... Which is shocking.

Japan's borrowing is at close to the USA's rate (compared to GDP) during the worst of WWII. Japan is having trouble with too low inflation and interest, the exact opposite of what is to be expected. The rules of economics are being rewritten before our very eyes. At the same time, Republicans are quoting rules that never existed.



https://www.economist.com/finance-a...04/japan-probes-the-limits-of-economic-policy

U.S 10 year is up around 300% since March last year. Seems like stocks would not like it to go much further. Guess we will see.

Former BIS Chief Economist:
"Have central banks reached the end of the road?

Just read what Bill Dudley, the former president of the New York Fed, wrote in Bloomberg a couple of weeks ago. He warns that central banks have run out of firepower, and he warns that the side effects are getting worse. I agree with every word. That is the most dangerous effect of the past thirty years of monetary policy: Debt levels have constantly been building up, and so have the instabilities in the financial system.

Jerome Powell has tried to normalize monetary policy, but he had to stop after a market panic in late 2018. Is the Fed hostage to financial markets?

This is exactly my definition of the debt trap: Central banks know they can’t leave interest rates as low as they are, because they are inducing still more bad debt and bad behavior. But they can’t raise rates, because then they would trigger the very crisis they are trying to avoid. There is no way out but to keep doing what you are doing, but by doing that, you are making it worse. Pretty uncomfortable, right?"

https://www.zerohedge.com/economics...t-central-banks-keep-shooting-themselves-foot

 

[goat]

The number one driver behind the skyrocketing cost of a college education is government. Here's a simple example to illustrate this:

The cost of a college class is say $100. The student is paying for that themselves. The government comes along and offers a low interest $100 loan to pay for the class. The college knowing this, raises the cost of the class to $200 because they know the student can pay $100 and the government will loan them the other $100. The college doesn't give a shit if the student is broke and up to their eyeballs in debt on graduating. That doesn't affect their bottom line.

While that's simplified, that's what's happened with college education. The government didn't make it easier for poor students to go to college, they just became another source of revenue for colleges.

That's the way I read it, and now the middle class can no longer afford higher education.

 

[Jolly]

To the point when the dollar is worthless.

BTW, Welcome.

Thanks.

Dollar becoming worthless isnt a concern for them, they are already announcing a new federal cryptocurrency.

It's all about the 1% inflating away thier debts and the rest be dammed. So they'll trigger the inflation until it's no longer useful. All about money supply, more money supplied into the main economy means more dollars chasing the goods available price goes up. Reason with all the QE we havent seen commodities rising significantly is because all that free money was going into stocks, so wall street has seen massive inflation in stock values. Now they are pushing inflation into main street. In this sense inflation is a racket.