Has the debt economy reached its limit? Solutions?

[Jolly]

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

It's the banks, students all now need loans to go to school, and end up working to pay off those debts for the years after they leave university.

Across the bourd its banks seeking to increase the costs of activities and so increase the amount of loans they give out. All about increased profits. They push up house prices, which then causes increased mortgage values and repayments, more people cant pay the increased costs due to a crash or an increase in interest, the more houses the banks collect.

 

[Jolly]

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

They'll increase interest rates once inflation is high enough. You might end up paying a million dollars for a loaf of bread by then

 

[goat]

It's the banks, students all now need loans to go to school, and end up working to pay off those debts for the years after they leave university.

Across the bourd its banks seeking to increase the costs of activities and so increase the amount of loans they give out. All about increased profits. They push up house prices, which then causes increased mortgage values and repayments, more people cant pay the increased costs due to a crash or an increase in interest, the more houses the banks collect.

Will you please tell this to Walt, he says an increase in cost will result in investors losing 90% of their money.

 

[Jolly]

Will you please tell this to Walt, he says an increase in cost will result in investors losing 90% of their money.

Depends what costs and where, increased costs are generally pushed into the consumers, hence inflation, there are winners and losers. If you own assests inflation increases your value, as all your assets inflate in value. Investors will lose if inflation drives the companies they are invested in under.

 

[goat]

Depends what costs and where, increased costs are generally pushed into the consumers, hence inflation, there are winners and losers. If you own assests inflation increases your value, as all your assets inflate in value. Investors will lose if inflation drives the companies they are invested in under.

That's what bailouts are for. It's a win-win for the top 10%. They make money on the way down, too.

 

[Joh17]

Today i have been spiritually told 20-30 times or more to warn people that THEY want war. Please tell as many as you can. They will likely not start a major war if they understand that people will not buy the war propaganda.

 

[Walt]

barter economy is the solution.

Barter economies have never existed. It is completely impossible for them to exist. They would require a double coincidence of needs that is rare in every day life. If you are a apple farmer, and I am a blacksmith, it would require you to need an iron tool, at the exact same time I needed apples. And if you had more apples then I needed, I would have to waste a huge amount of my time trying to barter off those apples, which would be neglecting my blacksmithing work. It would be a terrible deal all around.

But you have heard of barter economies, right? No, you have heard of societies that barter on their borders with other societies. A simple society will barter with another simple society. Within their own society, they will usually have a gift, obligation, or at most a palace economy. It is a society where things are reallocated within the society, but with no sense dollar amounts of obligation. Think of a family. You do not ask your children to pay you for the food you eat. You do not pay the family member that prepares the food. You treat yourself like a unit. Well, the entire society treats itself like a unit. There is little thought of private property.

So basically, your idea of a barter economy is amazingly bad.

 

[Truck Fump / h1b]

Barter economies have never existed. It is completely impossible for them to exist. They would require a double coincidence of needs that is rare in every day life. If you are a apple farmer, and I am a blacksmith, it would require you to need an iron tool, at the exact same time I needed apples. And if you had more apples then I needed, I would have to waste a huge amount of my time trying to barter off those apples, which would be neglecting my blacksmithing work. It would be a terrible deal all around.

But you have heard of barter economies, right? No, you have heard of societies that barter on their borders with other societies. A simple society will barter with another simple society. Within their own society, they will usually have a gift, obligation, or at most a palace economy. It is a society where things are reallocated within the society, but with no sense dollar amounts of obligation. Think of a family. You do not ask your children to pay you for the food you eat. You do not pay the family member that prepares the food. You treat yourself like a unit. Well, the entire society treats itself like a unit. There is little thought of private property.

So basically, your idea of a barter economy is amazingly bad.

yes they have.

your little perverse diatribe against human unity proves me right.

your psychotic banker consciousness seeks to divide humanity and insert it's grubby oligarchic finger in every crevice it's created.

 

[Walt]

Healthcare has increased over 310% in the last four decades.

A rise of 310% over 40 years, would be an increase of 3.6% per year. That is more than twice the average rate of inflation, but hardly a huge amount.

 

[Walt]

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

Lets illustrate another way. Government used to be willing to give large amounts of free money to universities, and now they do not. Of course that means the universities have to get that money from another source.

 

[Walt]

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.

Everyone is effected by the cost of living, or just costs in general. I am in the top 10%, and if I lost 90% of my income, it would really hurt. I think I would still be able to feed my family, but it would not be enjoyable.

Someone like trump, who barely has enough money to afford a private jet would really be hit hard if he lost 90% of his income. He would not be even close to affording a private jet. You may think that is not a big deal, but there are plenty of people who would not think it is a big deal to not have a car. Most humans do not own a car, and would have no sympathy for you becoming to poor to afford a car.

 

[Walt]

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.

10 Year Treasurys pay 1.6% interest. Target inflation is 2%, so people are basically paying the government to borrow money from them. Lets say the cost of a candy bar goes up by 2%, and the interest you get is 1.6%, you will be able to buy 4% fewer candy bars after 10 years than you could right now. 1.6% interest is insulting low. If we cannot get it to go up, bad things are going to happen to the economy.

 

[goat]

A rise of 310% over 40 years, would be an increase of 3.6% per year. That is more than twice the average rate of inflation, but hardly a huge amount.

Good catch, it should read an increase of more than 31 fold.

 

[Walt]

your little perverse diatribe against human unity proves me right.

Barter by definition is the opposite of human unity. A tribal economy would have a lot of unity, but little to no bartering.

 

[Walt]

Good catch, it should read an increase of more than 31 fold.

Now you are claiming an average medical inflation rate of 22%. That seems to high to me, so I actually researched it.

In the last 40 years, the highest medical inflation rate was 11.2%, well below your average of 22%. In the last 40 years, it has risen by 532%, or about 6 fold. General inflation has risen by 193%, so adjusted for inflation, costs have doubled.

But we are a richer country on average than we were 40 years ago. 40 years ago, GDP per capita was $13,976 (in 1981 dollars), today it is closer to $70k. So it has barely budged compared t o GDP per capita. That is very good if you have been surpassing the rise in GDP per capita... BUT, very bad if you have been falling behind the average, like many of trump's supporters.

https://www.in2013dollars.com/Medic...ing to the U.S. Bureau,rate of 4.69% per year.
https://www.usinflationcalculator.com/
https://www.macrotrends.net/countries/USA/united-states/gdp-per-capita

 

[goat]

Everyone is effected by the cost of living, or just costs in general. I am in the top 10%, and if I lost 90% of my income, it would really hurt. I think I would still be able to feed my family, but it would not be enjoyable.

Someone like trump, who barely has enough money to afford a private jet would really be hit hard if he lost 90% of his income. He would not be even close to affording a private jet. You may think that is not a big deal, but there are plenty of people who would not think it is a big deal to not have a car. Most humans do not own a car, and would have no sympathy for you becoming to poor to afford a car.

The top 10% has nothing to worry about, even after Powell raises interest rates. Why will Powell be forced to raise interest rates? Inflation is expected to surge from April 2021 of 12.1%. I find the cost of lumber going up 250% in one year the most telling of what we're in for.

Thanks for the correction on the use of effected, too.

 

[goat]

Now you are claiming an average medical inflation rate of 22%. That seems to high to me, so I actually researched it.

In the last 40 years, the highest medical inflation rate was 11.2%, well below your average of 22%. In the last 40 years, it has risen by 532%, or about 6 fold. General inflation has risen by 193%, so adjusted for inflation, costs have doubled.

But we are a richer country on average than we were 40 years ago. 40 years ago, GDP per capita was $13,976 (in 1981 dollars), today it is closer to $70k. So it has barely budged compared t o GDP per capita. That is very good if you have been surpassing the rise in GDP per capita... BUT, very bad if you have been falling behind the average, like many of trump's supporters.

https://www.in2013dollars.com/Medic...ing to the U.S. Bureau,rate of 4.69% per year.
https://www.usinflationcalculator.com/
https://www.macrotrends.net/countries/USA/united-states/gdp-per-capita

We can post links all day, but the cost of big-ticket items have gone up at least 31 fold in the past 40 years while working class wages remain stagnant.

 

[Truck Fump / h1b]

Barter by definition is the opposite of human unity. A tribal economy would have a lot of unity, but little to no bartering.

you're an idiot.

 

[Truck Fump / h1b]

We can post links all day, but the cost of big-ticket items have gone up at least 31 fold in the past 40 years while working class wages remain stagnant.

"anything else is socialism," said the fascist oligarch.

 

[Walt]

The top 10% has nothing to worry about

The top 10% in America make $118k and above. Most would have mortgage payments eating up 10% to 20% of that. If they lose 90% of their income, they will be making $12k and above, and will be forced to sell their houses at a loss.

Or put another way, about half the world's population makes less than $5k a year. They look at someone like you, or even someone who is living in American poverty, and think they have nothing to worry about. Wealth is a sliding scale, with everyone having something to worry about.