Really like this thread..... John, I love your writing style, easy to read, polished and to the point. You are very effective in getting your point across. I wish you were "on my side" :yes:

I am self-employed, almost always have been and it has been difficult to "make money" due to everything going UP in price. Tires, parts, insurance, groceries, utility bills...you name it and it has for the most part gone UP.

Article in my local paper yesterday: "Water and sewer bills to rise 7%" Great, I own a four unit and am paying a fortune as it is....AND rents in the area are NOT going up to offset. Oh and the government has been buying homes, spending 300K+ to remodel them and turn around and put them on the market for $159K...........that makes it real easy to compete!

I have lived with debt and without debt and will take without any day of the week. Study the people around you...an alarming number of people have sort of done the same thing: When loans were easy to come by, they maxed out, bought all the toys, went on vacation and partied like rock stars. Now upside down on home loans, toys go first, credit cards get maxed, 401K gets sucked dry, stop payments on the house and then don't ever answer the phone because it's the collections company looking for cash. I am seeing this happen over and over, herd mentality. For the last 5 or 6 years I have been buying up all the stuff they can't afford anymore and have been making good money flipping it, BUT in the last 6-8 months things have changed, it's almost impossible to sell stuff, it has to be a steal of a deal. It's almost like money has been snuffed out and people are just hanging on by a thread.

Strange times....

You show us your "facts", and tell us that if we don't believe them , that we must be unreasonable..

When food has in some case doubled in the store over the last few years, a reasonable person would understand the facts of reality.

Inflation is the hidden tax, and it is here..Costs are up. The printing and spending cause the dollar to be devalued, so that it takes more dollars to buy a product..

So when you have the printing of money from thin air, the dollar devalues, and along with the costs rising on products(some have doubled), you have higher costs and the devalued dollar.

So a reasonable person would look to what is happening rather than relying on charts. Everyone has a different view, and John, that does not make them unreasonable. That is my point.

Again, I appreciate your posts to give readers the other side of things, but just because we won't buy the data and charts, does not make us unreasonable..Remember that you may be wrong.

And again, I might be wrong, but as I said in previous posts, I Invest according to what you believe, and I don't invest according to what I think is the right way to handle the situation..They will print again.

I've heard zero reports of the government buying homes and remodeling them, even for banks this is a very rare thing to do. I was in the market for months this year and saw nothing like that at all. I wouldn't say it could never happen but that is not typical at all.

If anything, the government is losing a lot of money by practically giving houses away. I can't tell you how many freddy/fannie homes I saw that were listed way below market value. Not only were they cheaper than other REOs, you have to put less down!

My point is this, and it goes back to a lot of things people have said in here. Every persons experience is different, and you have to be cautious drawing any broad conclusions from it. In real estate and in commodities, every market is different, and generally we're all exposed and affected by a relatively small area of either, so as they go, so goes our experience.

Could there be other reasons why food costs have gone up? Certainly gas prices contributed to some of the recent (5-10 year) increases, but while they vary now, it's still in a somewhat consistent range and I think 4$ gas has been priced in.

Could it be the weather? Droughts in China and now the United states along with other similar disruptions around the world probably have the largest impact. When supply drops and demand doesn't (if anything it goes up), the obvious effect is rising prices.

Could it be Ethanol? The CBO estimated that 10-15% of the increase in food prices in 2007-2008 was related to Ethanol. The number is likely higher now, and here's an article talking about it from the wall street journal:

http://online.wsj.com/article/SB1000...googlenews_wsj

The mandate was awesome for corn farmers, but affects the price of so many things that everyone else pays the price. The government is to blame on this part.

Combine all of these factors and you'd be hard pressed to find out where all of our printed money actually contributed much towards the price increase. For example, steel costs have gone down what looks like 10%+ in the last year:

http://www.worldsteelprices.com/

If our money was being devalued at such a rapid pace that you point towards food as an example, why would steel be any different? The answer is they are two completely different things and while inflation would affect both, they have many other far more powerful things at play. In the case of food, the above contributed virtually all of the price increase while in the case of steel, decreased demand because of the economic situations around the world probably account for most of the drop in prices.

We all buy food so it seems like things cost more, and while on lat-g we tend to buy more steel than most people, we probably don't see the decrease in cost in our prices because AMD and Goodmark and so forth are likely afraid that prices could go back up, and really they are businesses so as long as the market will bear it, they will keep prices where they are.

All Good points, but getting back to the origin of the thread.

Some believe that printing money, Stimulus,is the answer. That for certain devalues the dollar, and you will need more dollars to buy products. The more units that you print, the less it is worth. And the paying back the debt will go on forever, and God forbid when rates rise.then you have real trouble trying to pay just the Interest, let alone the principal.

Some believe that the government is the most wasteful entity on earth. Why are they wasteful ? Because it is not their money. They don't care. GSA, ect.. just waste millions , and multiply that by the thousands of programs that the government has, and you have massive wasteful spending. Billions turn into trillions

Is the answer to print more money ? Is the answer to streamline Government and cut the fat ? The fat has been going on since I was born, so it isn't something new.

I believe it is to cut the wasteful spending, and not print more money.. Will that happen ? I doubt it, so I set my Investments on the case that they will print and spend, and never cut the waste...The waste is the grease for the 537 Politicians.

So, none of us are unreasonable, we just have different views on what should be done..Nothing wrong with that..I mean personally, that is.:cheers:

Again, I appreciate both sides so that the thread gives people choices..Let the readers decide..Individually, we have decided, and nothing someone posts will change our minds, but it would be boring if we all just agreed:thumbsup:

I'll sleep better knowing you keep up with what's happening in the Rochester NH Real Estate market....long story short...Rochester got a hold of some fed money, bought up some homes in a distressed area and renovated them. New from top to bottom. Some of that money was used by the Realtor to advertise them...OVER AND OVER AGAIN....with VERY LARGE ADS in the local paper. Oh BTW, if you made a liitle too much money, you couldn't buy it.

One particular duplex they did worked out real well for an older couple trying to unload theirs.....LOL competing against the government!!

One town north of us (Berlin) used their Fed money to raze some homes. Was up to the town as I understand it.

Like I said, I didn't discount it being possible, I mean I've heard of certain areas considering grabbing foreclosed houses using eminent domain in order to force them to be sold and not just sit empty, and I've seen reports that in some areas foreclosed and abandoned homes being razed, but they are the types of homes that you hear selling for < 10k because they are in terrible areas and barely livable.

My point is, that is extremely rare and while it may have affected you or people you know, it doesn't mean that's reality for everyone.

And bucketlist, I doubt anyone would disagree that the government could certainly cut a lot of waste and use it's money wiser. The question is about the nature, scale and timing of such things.

I've said this already, but you seem to ignore it. We had prosperity after WW1 for 3 reasons, and it was not fiat stimulus. More money in the economy resulted from the govt taking less out of it. Not to mention that consumers are spend happy after wars are over and troops return home.

My theory is when we end these wars and spending overseas, bring our troops home, we will immediately see more consumer confidence and service men and women buying houses, cars and spending their govt money here at home. Just like after WW2.

But people like Dick Cheney saying deficits don't matter is bunk. And it's why our Sec of Treasury was fired after a year, because he said they do matter. In came Hank Paulson, ex Goldman Sachs CEO and the govt got even more in debt and bailed out his old employer.

You need to look at who benefits from govt spending. And there have been plenty in govt to warn against it. The problem is, they seem to get rooted out.

Now back to your theory about stimulus. If that was true, we would have 4-5% official unemployment and a great economy due to QE1 and 2. But like they've tried, they didn't work as we can see now. This is why you and Krugman have such a hard time selling this idea. But like I said, your people are in power, so why aren't things better?

And the myth that more debt = higher value is almost too crazy to talk about. Debt is the antithesis of value, it's negative equity. % of GDP is what matters, and ours is on track for well over 200% which will lead to an even more worthless dollar, that is now worth 95% since 1913, the birth of the Fed. What do you think of that data?

But instead of arguing data, I like to discuss principle. It's a simple idea that we are arguing, who controls the market and the value of its currency. You say it should be done by a monopoly: the Fed and the govt. I say it should be by a free market: the people.

One REALLY big issue nobody is talking about is society. I don't think that it will "just work itself out" and be better. I could be totally wrong, and I'm not the chicken little type either! :willy: LOL. It worked itself out in the past because of people. The morality (which IMO is based on spirituallity, or lack thereof in the current population), work ethic, self pride, self dependence of people has TOTALLY changed over time. And it has changed for the worse. People just plain don't care anymore and want everything to be "someone else's" problem and fault. Anyone that has been in business or has managed people for more than a few years knows exactly what I'm talking about. Call it an entitlement society or whatever, but that IMO is why I think the "good times" are behind us. There will be some peaks, but I don't believe that there will be any long term "good times". Just like I said earlier, there are too many hands "out" for the hands putting in. I know that JP and some others may not agree, but I really feel that it is a "spiritual numbness" of the nation that has caused the downward spiral.

Here's the problem with disputing the figures from the Bureau of Labor Statistics (BLS). The same people tell us about the deficit. Here we are discussing the overall national debt ($14T or so today), and how do we know that number? Because the Federal government publishes it. We all believe that number. So why don't we believe the inflation numbers published by the Federal government? Why don't we believe the unemployment numbers published by the Federal government? I find this strange, and it's really inhibiting a good discussion.

because it's easy to see things that make us believe the government numbers are heavily massaged. With the deficit, we can't really see that, have to take their word for it. With unemployment, we know they don't count so many people for so many reasons that the stated number is BS. U6 unemployment is somewhat accurate at least, but they don't talk about that one because it looks really bad. The government likes to quote the much more optimistic figure that doesn't count people who lose their benefits or have given up trying (even though they are all unemployed), that doesn't count underemployed, etc. As far as inflation, I think they should include food, etc. in those figures, because they are a required part of life, and there is no doubt that section is going up WAY more than the governments quoted figures.

That number is available, and from the same source, and is called "headline inflation" or Consumer Price Index (CPI). Last month that number was 1.66% -- even lower than core inflation. Why? Probably mostly due to falling oil prices. Next month that number is probably going to go up. Why? Probably due to drought conditions over much of the US.

Core inflation is used by economists and policy-makers because it's not subject to these quickly changing conditions, but still reflects longer-term trends. It's the same reason that retail sales figures are trended with seasonal adjustments, or moving averages, etc., etc. It's not dishonest, or meant to obfuscate, but rather to allow good decision-making based on things that don't change quickly. Over time, CPI and core inflation are within error bars of each other.

We can talk about any of these numbers, but it's not a serious discussion when we take the government's word for one number (deficit), but not another (inflation or unemployment).

ok, I'll go a step further. I'm self-employed for the last 25 years. My supplies, from electrical to construction, to cleaning have all jumped way more than 2-3% from now to last year, and from then to the year before. I just looked online at some of my bulb pricing. These are USA made products.

MH70med up 23% from 7/2010 to 7/2012.
MH400 up 20% same time period
MH100med up 22% same time period

And on and on. These are the exact same pieces from the exact same manufacturer. Same with other supplies............. garbage bags from Costco, up almost 20% in the last 18 months. Window cleaner, up just over 20%............

The bottom line for me is my checkbook tells me their inflation numbers are not real, and you couple that with the advantage for them to under-report them, or manipulate them to make things look better, and I'm just not going to buy it. Don't care to argue the deficit number, other than it's growing too fast at this point. :yes:

Actually I think the Debt is even higher than they say it is...So no , I don't believe the debt number, it is worse than they are saying. Kinda blows your argument up, eh ?

Never are the "facts" you so much believe, ever lower than reported. They are always higher.

Inflation, Budgets, Debt numbers, Unemployment figures. Always end up higher, and never lower than they report..These are manipulated figures.

I find it strange that you so hold onto what you call "facts", when we in the real world see the increases for ourselves..Those are the facts. What is happening in the Real world.

So you can keep believing and posting your "facts", but the real world tells us differently. So therefore I believe you are just mistaken.

Very impossible to believe your argument, unless I am on your side of the agenda...Where I sit, the costs are up and the debt is way too high.

So I just humbly feel your confusion is just based on an agenda and not reality. Numbers lie...And always to the worse side of the equation.NEVER to the benefit of the people..

Jody, please understand that I'm not trying to claim that your costs aren't going up. I am claiming that the BLS numbers are real, and that US policy should be based on the BLS numbers.

If your argument is that the US government is deliberately fudging the numbers and lying to the population, then my question is simply this: why wouldn't the US government do the same thing with the deficit numbers?

John, I think you might be confused. The deficit is the amount of money lost for the fiscal year. The debt is the total amount owed by the govt. The deficit is added to the debt every year.

The last 5 fiscal years, our govt has run over 1 Trillion dollar deficits. Right now our total debt is over 17 Trillion, not 14 Trillion. So we add over a trillion dollars to our debt each year... What could go wrong? ;)

As for the deficit and debt numbers being accurate, it's really a red herring in this discussion. We know the unemployment and inflation numbers are skewed to their benefit, there's good reason to question the deficit and debt numbers too.

Generally speaking, I'm not sure why some people have such a hard time trusting corporations, yet they automatically believe any govt numbers are true and honest.

You bet. Nicely done.

Plain and Simple.

Further printing of money is not going to help company's earnings rise, it is not going to help profit margins expand further, it is not going to help GDP expand, it is not going to help global exports volumes increase, it is not going to help the unemployment fall, it is not going to help Greece from eventually defaulting and it is not going to help Spain with it's borrowing costs.

Printing money will only make prices of food, energy, and metals rise dramatically.

Those are the facts, and personally I don't mind if people don't believe it..They do so blindly, and with an agenda that is not fact based. I won't argue the points, because you cannot argue someone right.. They have chosen their "facts" or agenda, and they are sticking with it..

I choose to base my decisions on the facts of the reality of the situation. And although i find it strange that some people will never see it, much of life is strange, so I do my research, and choose my path...Others can decide for them selves..

Not confused. Just a little sloppy with the words. My apologies, and I've fixed my post.

The policy is based on the numbers they fudge.

And most likely the govt does do the same thing with debt and deficit numbers.. I don't think anyone is disputing that.

The Pentagon can not account for 25% of what it spends. In 2001 our own Sec of Def admitted that they could not account for 2 trillion dollars. That's pretty good evidence they aren't too good with their books in any area.

Again, it is always good to hear both sides.

This is something for the readers to decide on their own. We have made our decisions, and are just posting our views on the subject.

Always good to discuss it, even if we will never agree.. No harm, no foul..:cheers:

Just food for thought for all to read. they may agree with John, they may agree with me...No sweat. I am not here to change anyone's mind, but to just point out my views. :lateral: :thumbsup:

I am. Perhaps it's just my overly optimistic view of other people, but I think the government employees who work with and publish these numbers do the best they can to make them as accurate as possible. I'm sure that errors and oversights occur from time to time, but I don't believe there's any conspiracy here.

I can tell you that I have worked for a couple of federal government agencies and that there is plenty of ineptitude. I honestly can say that at one agency, there was easily 70-80% of it's employees that went out of their way to not be as accurate as they could be or at the very least, did not do things to a minimal standard.

Is that indicative of the whole system. Maybe not, but it would be hard to believe that a certain part of the government has found all the best (moral) citizens.

I, like you John, don't understand why the same people trust everything out of their government, and then don't trust anything out of their government. All the same people that opposed a Bush war agenda now support Obama and his war agenda.

It's a bit whimsical in tone, but somebody tried to answer that exact question:

http://business.time.com/2012/07/24/...are/?hpt=hp_c2

An excerpt:

Blandly labeled the Inclusive Wealth Report 2012, this impressive research project, which is super fun to explore, is the first serious attempt to measure the total wealth of the planet’s richest countries. Not income, mind you, which is what Gross Domestic Product (GDP) refers to, but rather total wealth, i.e., the comprehensive value of the physical assets (buildings + roads+ equipment + railroad tracks + etc.), human capital (population + education + skills + earning potential + life expectancy) and natural resources (land+ trees + minerals + fossil fuels). As you , the winner, by a long shot, is the United States, with an inclusive wealth figure of roughly $118 trillion (in 2000 dollars). That’s more than double the total of the next wealthiest country, Japan ($55 trillion), and almost six times the cumulative value of all the tea plus everything else in China ($20 trillion).

And another:

More to the point, and despite what you might hear during this year’s election cycle, more traditional measures of indebtedness are actually telling a positive story. Last quarter, public and private debt as a share of the national economy dropped for the first time in about three years, from 3.73 times GDP to 3.36 times GDP. We have a long way to go, but as a country we have actually been “de-leveraging”—paying down debt—which is one of the reasons the economy has been sputtering. It’s an ugly and painful process, but it’s necessary and working.

It’s also a lot better than selling Rhode Island to the highest bidder.

Whether it's about a conspiracy or not is a red herring. It's a symptom of a bureaucracy. And that exists in business and in govt, whether we want to believe that or not. But yes, I do think that is part of the problem. Some people wear rose colored glasses looking at the world. I don't think that is realistic at all.

Take for example the Penn St scandal. Yes most of involved in that college are diligent workers are innocent, but look at the level of abuse that was taking place. And look at Sandusky's wife. And this was going on for a long time. There was some serious denial taking place. I'm sure there's people who still might think Sandusky is innocent.

Unfortunately, criminals, fraud, corruption, obedience, ignorance and apathy do exist. Especially in a bureaucracy.

Edit:
This is an example what I'm talking about. Often the worst rises to top and gravitates to govt. Does he sound honest to you?

Disgraced Former Penn State University President Now Working for U.S. Government
http://www.washingtonpost.com/blogs/...x5BX_blog.html

Bringing this back on topic.... For those who have not seen this great exchange, here are heavyweights, going head to head!

And you really think "the government" can do ANYTHING efficiently? Wait until the Obamacare debacle gets rolling... I can only imagine the size of the fraud and waste.

This is the IRS for crying out loud! If any agency should be on top of it's game it should be this one!



http://www.washingtonpost.com/politi...3RX_story.html

It depends. I agree with you that this is unfortunate and dismaying. But: to what are we comparing? Un-normalized numbers without comparison metrics usually make it hard to make good decisions. Has the problem grown worse? Or has the problem gotten better? We don't know from this story. Nor do we know how this sort of thing compares to other large entities, like corporations or the military, or other governments. Making any conclusion from just this information is a leap to judgment.

In related news, we have this:

http://www.bloomberg.com/news/2011-1...dget-cuts.html

An excerpt:

The Internal Revenue Service is reducing spending in anticipation of budget cuts for the current fiscal year that haven’t taken effect, Commissioner Douglas Shulman said in a letter to lawmakers today.

He warned of a “noticeable degradation” of taxpayer services and enforcement if Congress follows through on a plan to cut about $500 million from the agency’s budget for fiscal 2012.

By taxpayer services does he mean "collection"? Because last time I checked that's the only service the IRS offers. :lol: If that is the case, I for one, welcome a 'degradation' in 'services'.

The less money taken by the govt, results in more money left in the economy. And that's a good thing.