Prices not going down??

[Island Time O25]

Originally Posted by Mike OReilly

Yup. And I think they have a word for this. What was it...

Oh ya; a Ponzi scheme.

It's great that we're keeping everyone solvent through this crisis, but we're doing it on the backs of future generations. With each successive crisis we shore up the system, and keep all the current investors whole, by shoveling money out the door -- money that we don't actually have.

Luckily it won't be most of us who have to pay it back. It's our bequeathment to future generations. I'm sure they'll just love us for it .

We'll pay soon enough. In the form of inflation which will erode our real income and assets values. Last 20 or so years the consequences of the US money printing press were hidden as the whole world had robust appetite for US dollars. Most of the newly minted electronic dollars were spread out across the world economies and showed up on paper as "rising emerging markets".

Once the appetite cools (or the appetite for another currency develops) all of these dollars will come back home in the form of inflation. I still recall the stagflation of the late 70s when we had both high unemployment and high interest rates and relatively high inflation. Then gas prices at the pump practically overnight went from 60-65c/gal to $1.50-2/gal. Yikes.

[Chotu]

Originally Posted by Island Time O25

We'll pay soon enough. In the form of inflation which will erode our real income and assets values. Last 20 or so years the consequences of the US money printing press were hidden as the whole world had robust appetite for US dollars. Most of the newly minted electronic dollars were spread out across the world economies and showed up on paper as "rising emerging markets".

Once the appetite cools (or the appetite for another currency develops) all of these dollars will come back home in the form of inflation. I still recall the stagflation of the late 70s when we had both high unemployment and high interest rates and relatively high inflation. Then gas prices at the pump practically overnight went from 60-65c/gal to $1.50-2/gal. Yikes.

Doesn't inflation increase the value of assets?

Or said a better way, assets stay the same value while the value of a dollar decreases?

Isn't that what inflation is by definition?

[Island Time O25]

Originally Posted by Chotu

Doesn't inflation increase the value of assets?

Or said a better way, assets stay the same value while the value of a dollar decreases?

Isn't that what inflation is by definition?

Only if wages and income increase commensurately. Which has not happened since the early 70s.

Inflation increases the nominal value of everything. Not the absolute value. Absolute value is always relational. Say your wage is $10/hr. The weekly food bill is $50. If inflation makes it $75 (50% increase) but your wage usually does not not go to $15 you're getting hit. Inflation is fine for any business or industry which can raise their prices more than the offset of the lower demand. i.e. necessities of life - food, transportation, communications, housing, etc. Everyone else, especially if they lack political clout, get hit. Unions used to have political clout so they would clamor for and get wage increases, including min. wage. Since their demise we haven't had a meaningful min. wage increase for over 20 years. All of those in that wage bracket are working more for less.

[Mike OReilly]

Originally Posted by letsgetsailing3

What's the alternative?

I mean, we could have just let our financial system implode in 2008, but would the world have been better off?

(The answer to that, of course, is no.). Future generations would not have been better off by letting the financial system fail.

And letting people go destitute right now because we need to social distance for a couple of months would also be a bad idea. We wouldn't be better off, and the future generations also would not be better off.

Yes, money is an illusion. But it's one that is working pretty well in terms of living standards.

What Paul said .

But to dig deeper, the true alternative is to stop using wages (and their cousins) as the main means of distributing resources in our societies.

Everyone needs resources to live and thrive. In addition, our societies need to be productive; to produce these resources that we all need. A "job" encompasses both these functions, but it doesn't have to be that way. We could choose to distribute resources AND we could be productive. There's no necessity to combine the two.

This is what we're effectively doing through the various direct tranfers right now. It's a primordial Guaranteed Basic Income and it's wonderful that people of all political stripes have all embraced it. We're all socialists now .

Hopefully we'll remember these lessons once we get past this latest crisis.

[slug]

Originally Posted by Mike OReilly

What Paul said .

But to dig deeper, the true alternative is to stop using wages (and their cousins) as the main means of distributing resources in our societies.

Everyone needs resources to live and thrive. In addition, our societies need to be productive; to produce these resources that we all need. A "job" encompasses both these functions, but it doesn't have to be that way. We could choose to distribute resources AND we could be productive. There's no necessity to combine the two.

This is what we're effectively doing through the various direct tranfers right now. It's a primordial Guaranteed Basic Income and it's wonderful that people of all political stripes have all embraced it. We're all socialists now .

Hopefully we'll remember these lessons once we get past this latest crisis.

Basic Income would be inflationary

If I’m your landlord an see that you just received some free basic income cash , I’m going to want to get my hands on some of it

I will raise your rent , your school tuition , your healthcare , your antifouling ......

[Mike OReilly]

Originally Posted by slug

Basic Income would be inflationary

If I’m your landlord an see that you just received some free basic income cash , I’m going to want to get my hands on some of it

I will raise your rent , your school tuition , your healthcare , your antifouling ......

Nope. Price controls.

Actually, you misunderstand. There is no price in my new truly-alternative world. There is no money.

[letsgetsailing3]

Originally Posted by Mike OReilly

But to dig deeper, the true alternative is to stop using wages (and their cousins) as the main means of distributing resources in our societies.

Nobody is even proposing that. Well, except people who either don't have jobs or don't have high paying ones, and some politicians.

We ALREADY provide benefits for those who don't have jobs. So we'd be trading one benefit for another that we'd take away, while giving the workers who already have jobs a basic income, and taxing those with jobs to pay for it.

Now THAT's what you call a Ponzi (redistribution) scheme. I do get how politicians who want votes would advocate for this. We're like lobsters in a pot, waiting for politicians to turn up the heat.

I looked for a quote to demonstrate the problems with this. Boy, did I find a lot!

"I predict future happiness for Americans if they can prevent
the government from wasting the labors of the people
under the pretense of taking care of them."

- Thomas Jefferson


“If you put our federal government
in charge of the Sahara Desert,
in 5 years there would be a shortage of sand."

- Milton Friedman


Any man who thinks he can be happy and prosperous by
letting the Government take care of him,
better take a closer look at the American Indian."
- Henry Ford


"The Constitution is NOT an instrument for the government to restrain the people,
it is an instrument for the people to restrain the government
-- lest it come to dominate our lives and interests."

- Patrick Henry


"The American Republic will endure, until politicians realize
they can bribe the people with their own money."

[CENTER]- Alexis de Tocqueville (1805–1859)

"Anyone who would trade their freedom for safety
deserves neither freedom or safety."

- Benjamin Franklin

[Mike OReilly]

Originally Posted by letsgetsailing3

Nobody is even proposing that. Well, except people who either don't have jobs or don't have high paying ones, and some politicians.

I agree, no one is proposing what I'm suggesting. But you asked for real alternatives. I'm giving you one. If people didn't need to earn a wage to sustain and thrive, then this whole tailspin we're currently in would be a non-issue.

The Guaranteed Income is a meager step towards this true change. And I realize most people can't even get their heads around the concept of disassociating wages (and their ilk) from resources needed to live. We're so deeply embedded in the capitalist belief system that most of us can't even conceive of alternatives.

But we're going to get their one way or another We're rapidly moving towards an economy without jobs. Automation, then robotics, and now the real "killer app" of AI, is going to replace virtually all tasks. We won't need people to be productive. But we still need to distribute resources.

[KC375]

Originally Posted by Wotname

Curious - exactly which dollar are you referring to?
Last time I checked, there were more than 20 to choose from.

Yeah, but really...
(I know you were simply being humorous)
The USD makes up more than 60% of global currency reserves. Only two other “dollars” CND and AUS make it into the top 8 both of them at about 1/40 the position of the USD...
So when folks say the dollar...
Note a number of economists and policy makers see an advantage to not being a major reserve currency as you maintain more national control of monetary policy

[Lake-Effect]

Originally Posted by wolfgal

thank you for the words of encouragement. i'm usually the optimist, really. i'm also usually the one who has her head about her when folks begin to panic. i shift gears when things get rough. time slows, and i have focus and clarity that is usually inaccessible in my everyday life.

Anyone who's thinking seriously about this is concerned, and it can overwhelm anyone in a weak moment. Everyone needs their batteries recharged periodically.

am i being a pessimist or a realist?

i'm looking at how Ray Dalio just made huge numbers shorting the European stock market. i'm wondering about the way the banks over here are interdependent and have a floundering foundation in germany. and yes, i'm wondering is this ship sinking? what is possibility of the banks folding here? if this happens, things might get nasty...

We had a meeting with our financial advisor 2 days ago. One thing he stressed is that lessons were learned in 2008, and the financial interventions that have been made so far have been better-timed and more carefully applied... reducing the likelihood of systemic collapse. Still... it's early days, and in 2008 we didn't have so many forced to stay home.

I'm also annoyed when I see the big shorts paying off handsomely, the big guys just happening to sell big blocks of stock just before the roof fell in, daytraders and algorithmic trading making 5+% a day from playing the wide swings of last week. My question is - if average people have been forced out of earning income, shouldn't the financial industry itself and the market be forced to take a "break" as well? eg pause or restrict trading. It's kind of repugnant to think about how much money is being made from others' suffering, and that we're throwing so much money at the "market" and the financial industry so that they can continue to profit and pay bonuses. I think that the bulk of the next round of stimulus should go to help PEOPLE and small business, once the lockdowns start to ease, so that PEOPLE are back on their feet ASAP, and they will buy goods and services, creating demand.

... where were we? Oh yes. What will recovery look like?

First, we need to continue to do the best possible job at reducing spread and getting prepared for the peak which is still coming in most places. Not yet time to discuss slacking off. Latest data show that the current measures are working as designed. NYC is currently hurting for personal protective equipment. I'm listening to a CBC interview with an NYC health reporter and she's relating how some staff have to wear garbage bags, and that healthcare workers are starting to get sick, with at least one staff death now. So lots of urgent needs still to be met.

My best guess, from current reporting that the lockdown could last into, or maybe through May.

So hard to say what we'll see as we emerge from this forced hibernation. It will be a recession, but not the End Of Our Way Of Life. Much will depend on how much and where financial support is provided. And on how much the "economy" is willing, or forced, to accomodate the reality of COVID-19.

I won't earn any love for this, but... on CF, we ARE the boat-owning class. I'm guessing that the majority of us will see our investments sag, our businesses will hurt... maybe even fail... we might not get to go cruising when we want to, or buy that next yacht in the near future... but we are not likely to be evicted, or to miss a meal, either.

[Grimgrak]

American can make just about anything it needs whether or not the FDA will approve it to be used/sold is the bottle neck.

Originally Posted by arsenelupiga

no need to be that negative.

this is what i think will happen.

Yes, we (not me of course) will go back to work shortly. There will be infections, etc.

As there was already infections, possibly say 20% of population, this will decrease pool of carriers a bit. Further masks, behaviour will decrease transmission to close to 1 and eventually in couple months below 1 and off you go, virus will be gone.

there is no alternative really. with lack of equipment, that is the only option. Maybe in the future you guys make your own masks in US .
Now the problem is that outsourcing. Source countries will be eternal supply of corona.

So some hard measures will need to be taken.

see how it goes.

[Singularity]

Originally Posted by wolfgal

...
if i'm a pessimist, i can get the boat and get her ready and get gone.

if i'm a realist, then it could be best to redirect my resources and energy into planting a veggie garden, building a greenhouse, stocking up on firewood and candles and raising chickens? if this is the best thing to do, i'd need to swallow my dream, hard...

Realists are, by practical definition, slightly pessimistic, or slightly depressed, or slightly on the negative side. To not understand this is to perennially wonder "what's wrong with me when everyone else seems so happy." The lackadaisical animal tends to not survive as well...

Melvin Udall, in As Good as it Gets:
"What makes it so hard is not that you had it bad, but that you're that pissed that so many others had it good." [the envy thing]

To be genuinely joyful in the face of overwhelming real-world negative stuff requires ignorance (lack of fuller awareness of reality) or magical thinking ("it...it always somehow gets better" or "_______ will step in to save us"). Is such a life enviable?

Question is...would one rather see the world as it is, or be in la-la land? I'd suggest that when realists congregate...the depression actually eases...

[Hardhead]

Originally Posted by wolfgal

thank you for the words of encouragement. i'm usually the optimist, really. i'm also usually the one who has her head about her when folks begin to panic. i shift gears when things get rough. time slows, and i have focus and clarity that is usually inaccessible in my everyday life.

am i being a pessimist or a realist?

Wolfgal - don't think so much. Sometimes you have to go back into the bubble of ignorance, get re-charged, and circle back later. All that's most important is immaterial in many ways. Try that perspective.

Too much thinking gives you too much tunnel vision.

[skipperpete]

Wolfgal, I agree with Hardhead, try to avoid the constant news cycle, it only makes us anxious. The vege garden and minimalist lifestyle isn’t a terrible option and i’m sure you’ll find a boat that suits you at a great price as the economy slows and people unload assets. My apartment building at les halles is totally evacuated and locked, I guess there was someone with the virus in the building and there is a good chance that I may never return. My boat is at a marina in the south and thats totally closed down too. I’m unable to get back as I was overseas when the airlines stopped but am comfortably isolated in Malaysia.
Stay well.

[hpeer]

Originally Posted by Paul L

Not sure why you are implying that Malaysia is doing nothing. I'm sitting here in week 2 of a nationwide and enforced shutdown. About 5 minutes ago I had a knock on my boat to get my daily temperature taken. Malaysia acted far quicker than the majority of the US states and there are no government officials saying lets open up the economy by Easter so I can get reelected. Of course Easter just isn't that big a deal here.
Malaysia made a big screwup in having a large religious multiple day gathering of 12 to 16 thousand people at the end of Feb. That resulted in the Tabligh cluster of 963 confirmed cases. Malaysia data can be seen here
https://www.bloomberg.com/news/artic...as-virus-bites

They also have experience and infrastructure still setup for the SARS epidemic a few years ago.

Paul,

You are correct, I had picked up in the religious gathering and extended it as a trend. My mistake.