Financial topics

[jdcpapa]

On the subject of this mob issue, it is a difficult subject. But first of all, I am not a "bleeding heart liberal", second as I stated in an earlier post, I believe there is something else working here, third, this so called racial flash mob nonsense has been going on for decades.

As for my personal experiences,I do not take them lightly and hold them close to my vest. It is a rule of the jungle to show no fear and to know who your enemy is.

[John]

Look, you guys can call me all the names you want. I've been going
through this for almost ten years years now, and I've been called a
"pea brain," a "sociopath," and a lot of other names.

And I'd really be bothered by being called all those names except,
gee, it always turns out that I'm right, pea brain and all.

So on the subject of inflation, I'm going to tell you again: Given the
current constellation of generations, there is absolutely no chance
whatsoever that the kind of inflation that you're talking about will
occur. It's literally impossible. And I've written about this
subject many, many times, and given many, many reasons.

So believe what you want guys. But what I'm telling you is that if you
think that your debts are going to be bailed out by inflation, you're
dead wrong, and you will pay for it.

John

[Higgenbotham]

So on the subject of inflation, I'm going to tell you again: Given the
current constellation of generations, there is absolutely no chance
whatsoever that the kind of inflation that you're talking about will
occur. It's literally impossible. And I've written about this
subject many, many times, and given many, many reasons.
John

Yes, you have. HIgh prices on objects of speculation have a wonderful way of animating a discussion. Anybody want to talk about real estate or oil tonight? Tulip bulbs?

[Higgenbotham]

Third, this so called racial flash mob nonsense has been going on for decades.

Sort of, but I do think there are some subtle differences. The generational dynamics xenophobia observations seem accurate and xenophobia looks to have arrived in America.

[MnMark]

So believe what you want guys. But what I'm telling you is that if you
think that your debts are going to be bailed out by inflation, you're
dead wrong, and you will pay for it.

John

In a book I read on the Weimar hyperinflation I found it interesting that at a certain point the government passed laws that linked the amount of money you owed on debts to the inflation rate. So what you owed rose. Fortunately I have no debt and have never counted on being bailed out by inflation.

Another interesting tidbit I picked up from the book was that while the nominal number of German marks that were outstanding during the hyperinflation rose into the quadrillions, their buying power in terms of other currencies dropped to about 1/6th of what it was before the hyperinflation. In other words, the hyperinflation had the effect of eliminating about 85% of the buying power of the population.

So in that sense the result of a great deflation or a hyperinflation are the same. In the first case, the amount of credit and money outstanding collapses. A lot of people lose their money, it vanishes in defaulted-upon credit, and the buying power of the population plunges. In the second case, no one loses their money, but the buying power of what they have plunges. In both cases the effect is the same, though the mechanism is different. So maybe arguing about deflation versus hyperinflation is pointless. In either case, a lot of people lose what they've saved - either by lending it to banks or others who go bankrupt and default, or by having the value stolen away by the government printing presses.

The advantage of the printing presses option for the elite is that they and their cronies are the ones closest to the money-printing spigot. They get the freshly-printed money first, and get to spend it while it still has purchasing power. By the time it defuses out into the population, the purchasing power is gone, but these people who are closest to the spigot are busy buying up real assets with the soon-to-be-worthless fiat. This is another reason that the powerful prefer high inflation to deflation.

[jdcpapa]

Third, this so called racial flash mob nonsense has been going on for decades.

Sort of, but I do think there are some subtle differences. The generational dynamics xenophobia observations seem accurate and xenophobia looks to have arrived in America.

No, that is the least of our problems here in America.

[jdcpapa]

So on the subject of inflation, I'm going to tell you again: Given the
current constellation of generations, there is absolutely no chance
whatsoever that the kind of inflation that you're talking about will
occur. It's literally impossible. And I've written about this
subject many, many times, and given many, many reasons.
John

Yes, you have. HIgh prices on objects of speculation have a wonderful way of animating a discussion. Anybody want to talk about real estate or oil tonight? Tulip bulbs?

Would you care to opine as to the reason why housing values are increasing in South Florida?

[MnMark]

Third, this so called racial flash mob nonsense has been going on for decades.

Sort of, but I do think there are some subtle differences. The generational dynamics xenophobia observations seem accurate and xenophobia looks to have arrived in America.

A phobia is an unreasonable fear of something. "Xenophobia" is an unreasonable fear of outsiders.

If there is a legitimate reason to fear something, it is not a phobia. Calling a reasonable concern a "phobia" is a way of belittling the concern instead of addressing it.

Let me give you a hypothetical. When Cortez, Pizarro, and the other Conquistadors landed in Mexico and Central/South America, and the first natives of those lands saw these strangers with their gigantic "canoes" and their fire-sticks and their amazing large rideable beasts (horses) and their metal armor, would you have scolded them for "xenophobia" if the sight of these uninvited outsiders made those natives a bit uncomfortable?

When the Pilgrims were establishing themselves in colonies, uninvited, on the land of the Eastern indian tribes, and growing in numbers, and spreading out into more territory; when they were at first friendly with the indians and then later, as their numbers grew, quite open about their ambition to take over the continent; would you have scolded the indians for "xenophobia"? Of course not. Their concerns were reasonable.

The same goes for the feelings of those like myself who do not care to have 20 or 30 million Mexicans establishing colonies in the Southwest USA, who do not care to see Dearborn and other areas of Michigan become colonies of the Middle East, who do not care to have colonies of Somalis and South Asians establishing themselves in cities that were previously peaceful, safe, prosperous areas of white Americans, who do not care to see our tech industries and our science graduate schools taken over by Asian Indians and Chinese. Our concerns are reasonable. They are not "phobias". We are looking at the situation with no rose-colored glasses, with our eyes wide open, and recognizing the truth that when more than one significant racial/ethnic/cultural population shares the same territory, they begin to fight for control. It is natural, it is built into us, and it cannot be changed or waved away with progressive idealism.

So I object to your casual use of the term "xenophobia" in this context of generational cycles. I can believe that there are generational cycles of tolerance for a certain amount of outsiders settling in a people's territory, but it is unfair and insulting to call these very real and very reasonable concerns "xenophobia".

[John]

> The advantage of the printing presses option for the elite is that
> they and their cronies are the ones closest to the money-printing
> spigot. They get the freshly-printed money first, and get to spend
> it while it still has purchasing power. By the time it defuses out
> into the population, the purchasing power is gone, but these
> people who are closest to the spigot are busy buying up real
> assets with the soon-to-be-worthless fiat.

I think that this is getting very close to the concept. Even
in a major drought, where people are dying of thirst, rich
people can still a have swimming pools. Politicians describe
this by saying that the gap between rich and poor is growing.
Even in a deflationary environment, the bankers are still paying
themselves million dollar bonuses. Even when liquidity is
disappearing, there are still pools of liquidity concentrated
in various places, whether it's in gold or tulip bulbs.

I think of deflation as more than just a measure of prices. It's
something that permeates the very fabric of society -- every behavior
and attitude. Its most obvious manifestation is the drive among
ordinary people to save money -- not spend money, not create jobs,
just put the money somewhere safe. It's that set of attitudes and
behaviors that make inflation impossible at these times.

John

[Higgenbotham]

Yes, you have. HIgh prices on objects of speculation have a wonderful way of animating a discussion. Anybody want to talk about real estate or oil tonight? Tulip bulbs?

Would you care to opine as to the reason why housing values are increasing in South Florida?

Sure. If you take Miami (I assume that's the example you're citing) sale prices per square foot are down 3.7% year over year but prices per unit are up 2.5%:

http://www.zillow.com/local-info/FL-Mia ... 8%26el%3D0

This typically happens in a bust because as inventory increases and sales decrease buyers can get a lot better quality house for their money. So they tend to buy houses that are a bit larger and in better beighborhoods because they can pay a lot less per square foot.