Inflation 101
I love the idea of making America great
I don’t see how deportations, inflation, religion, or reduced education funding contribute to making America great though
Are you trying to blame inflation on trump or repubs? It seems like you are, but I think it is fairly common knowledge that inflation is too much money chasing too few goods and trump and repubs fought against most of the free money that still sloshes around the economy that dems worked hard to throw around after Covid and trump and repubs fought dems on trying to shut the economy down as little as possible.
Freedom of religion is bad? Or what are you saying?
The 3 expenses that have consistently gone up in price and outpaced inflation are also the 3 things that the govt is most involved with and have done the most to keep prices down - education, health care and home prices. Many Repubs are fighting for school choice which gives parents essentially a voucher to choose which school to send their kids to. So public schools will have to work like private schools have for so long to compete with other schools to attract students and their parents. This will force public schools to either catch up to private schools or shut down and be replaced by more private schools.
Thanks for typing this out and saving me the time. I have probably written the same thing 20 times on 2+2.
Agreed which is what I wrote here:
To help people understand this concept: If your neighbor finds 1 trillion dollars in his back yard, but he never actually digs it up or does anything with it how would that effect prices of any product or service?
Government never force banks and other institutions to creates, invest and over leveraging in CDOs…..
Key components of the 2008 gfc ….
All the bs been debunked many time about the CRA where they have only a tiny % about failed mortgages compared to all the others that really created the bubble …
The first point is a matter of timing. The current crisis is rooted in the poor performance of mortgage loans made between 2005 and 2007. If the CRA did indeed spur the recent expansion of the subprime mortgage market and subsequent turmoil, it would be reasonable to assume that some change in the enforcement regime in 2004 or 2005 triggered a relaxation of underwriting standards by CRA-covered lenders for loans originated in the past few years. However, the CRA rules and enforcement process have not changed substantively since 1995.2/ This fact weakens the potential link between the CRA and the current mortgage crisis.
Using loan origination data obtained pursuant to the Home Mortgage Disclosure Act (HMDA), we find that in 2005 and 2006, independent nonbank institutions—institutions not covered by the CRA—accounted for about half of all subprime originations. (See Table 1.) Also, about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods, populations not targeted by the CRA. (See Table 2.) In addition, independent nonbank institutions originated nearly half of the higher-priced loans extended to lower-income borrowers or borrowers in lower-income areas (share derived from Table 2).
In total, of all the higher-priced loans, only 6 percent were extended by CRA-regulated lenders (and their affiliates) to either lower-income borrowers or neighborhoods in the lenders' CRA assessment areas, which are the local geographies that are the primary focus for CRA evaluation purposes. The small share of subprime lending in 2005 and 2006 that can be linked to the CRA suggests it is very unlikely the CRA could have played a substantial role in the subprime crisis.
I will tell u amazing secret baham …
6% is far less a problem then 50% or 60% default rate loans !
But keep saying what did hurt it’s the 6% default not the 50-60% in the high end loan market zzzzz
In baham world 6 > 60 in math shrug
Not because u see someone as ill informed as u , makes it true . .
The day you will prove me baham that 6% is a stronger number then 50% I will believe you.
Ps: I know it sounds crazy but yes , greed can be responsible sometimes to create bubble , greed can even be a reason to do fraud , who knew …
But hey keep blaming something that existed 10-15 years prior that created absolutely 0 trouble all along and give a pass to something like CDO that got start been used in 2002 for mortgages securities ….
https://en.m.wikipedia.org/wiki/Collater...
Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS)
The Justice Department has filed a civil lawsuit against the real estate company RealPage, alleging the company’s software uses landlord data to artificially inflate the price of rent across the United States by quelling competition in the market.
According to the complaint, the Texas-based company uses nonpublic data from landlords to train RealPage’s algorithm for pricing recommendations, creating a “vast scheme to subvert the competitive process,” one Justice Department official said.
“Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law,” Attorney General Merrick Garland said in a statement Friday. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents.”
There is a famous scene in Austin Powers where Dr Evil demands a 100 billion dollar ransom and is laughed at because it's 1969 and that amount of money doesn't exist yet.
The US national debt is now 25 trillion dollars.
People think they are smart holding cash and that Wall Street is crooked looking to leave them with the losses but it's actually the opposite.
In the long run if you hold dollars you are guaranteed to lose, because they are going to continue printing more of them.
Remember when we were in school and they showed us pictures of inflation run wild with the wheelbarrows full of cash n stuff to buy a loaf of bread? I don't get the impression regular people are drowning in worthless cash. Seems more like they're being bled dry of the little they have from every direction.
It is unfortunate that we have the repub prez candidate roasting dems for pushing to maximize govt handouts during COVID and trying to shut down the economy as much as (and for as long as) possible. That has forced Kamala to lie and say inflation is caused by companies being greedy.
Since this has become a political issue it likely means that the lessons we should have learned from the pain caused by far overreaching govt involvement in the economy during COVID have major long-term negative effects.
It’s always been a political issue. The rich don’t want to pay their fair share. The rich want to be able to borrow for cheap and buy assets at a discount every ten years due to recessions
It is unfortunate that we have the repub prez candidate roasting dems for pushing to maximize govt handouts during COVID and trying to shut down the economy as much as (and for as long as) possible. That has forced Kamala to lie and say inflation is caused by companies being greedy.
Since this has become a political issue it likely means that the lessons we should have learned from the pain caused by far overreaching govt involvement in the economy during COVID have major long-term negative effe
American inflation is lower than global inflation
The globe is generally more socialist than the US, and socialism (especially Communism) causes inflation for various reasons.
Sure, but it stands to reason that as long we don't inflate the currency at a much higher rate than the rest of the world, the American dollar is fine.
If there's a concern, it's that America (2.9%) is inflating faster than the UK (2.2%), China (0.5%), and the eurozone (2.6%), but it's a myth that Democrats are the evil path to bread lines and $500 gallons of milk.
In 2019, American inflation was 1.81%, while the euro area was 1.44%.
In 2018, American inflation as 2.4% to the euro area's 1.9%.
But this is all fine.
Russia's is 9.1% this year
India, 5.4%
Japan, 2.8%
South Korea, 2.6%
Singapore, 2.4%
American inflation is fairly steady. A goal of near-zero inflation isn't practical.
Which brings us to the debt. The national debt doesn't matter if inflation is steady. Should it be closer to 2%, sure, but with global inflation at 5.9% and projected to fall to 4.5% in 2025, American inflation should decline, no matter which party is in power. So, the path to 2% is very much in reach.
The globe is generally more socialist than the US, and socialism (especially Communism) causes inflation for various reasons.
among the maaaaaany problems of socialism/communism I don't see inflation as being inherently one of them.
in fact the USA structurally had higher inflation than the EU even if the latter is objectively more socialist
Which brings us to the debt. The national debt doesn't matter if inflation is steady. Should it be closer to 2%, sure, but with global inflation at 5.9% and projected to fall to 4.5% in 2025, American inflation should decline, no matter which party is in power. So, the path to 2% is very much in reach.
this is false lol. even with a perfectly steady inflation of 2% every single year, the debt can matter a lot anyway
this is false lol. even with a perfectly steady inflation of 2% every single year, the debt can matter a lot anyway
Not in a robust, diverse economy like the U.S. It matters for banana republics and even a lot of the developed world, but not in the U.S. If anyone in the developed world has a debt crisis, it's Japan, and Japan doesn't have debt crisis.
Not in a robust, diverse economy like the U.S. It matters for banana republics and even a lot of the developed world, but not in the U.S. If anyone in the developed world has a debt crisis, it's Japan, and Japan doesn't have debt crisis.
Japan actual debt is much smaller than it looks.
If we used the equivalent normally used for the USA ("hold by the public"), and disregard as we should debt owned by the centrale bank, it would look approx one third of what it is currently.
Moreover and most importantly, the privately held debt is basically entirely owned by japanese people. So it's an internal game of winners and losers among the Japanese population.
If real interest rates are negative, investors are being fleeced in favour of taxpayers, viceversa taxpayers are paying a rent to investors. But in any case it's japanese vs Japanese.
A lot of american public debt is owned by foreigners though. Interest paid to them is real american resources (production) being sent overseas every year.
If the size of that flow grows big enough that decreases the quality of life of americans va a counterfactual without that debt, or with the debt fully owned by Americans.
And that can happen even with inflation at 2%.
Currently, the net-net American debt stands at approx 22 trillions (hold by the public - fed holdings). Of that approx 7 trillions are in foreign hands.
Foreign hands usually have longer duration debt than domestic owners.
Very approximately 250-300 blns/year are currently sent overseas in interests.
This is still manageable ofc, but it can grow to a point it becomes a huge burden on American taxpayers (who will then pay taxes to fund foreign governments and investors), even with 2% inflation
This is still manageable ofc, but it can grow to a point it becomes a huge burden on American taxpayers (who will then pay taxes to fund foreign governments and investors), even with 2% inflation
The sky's been falling for a long time. It's still up there. I understand the concern, but wasting energy on the concern is a waste.
The sky's been falling for a long time. It's still up there. I understand the concern, but wasting energy on the concern is a waste.
The sky hasn't been falling for a long time, lower interest rates for a long while made federal debt less problematic.
Recent developments are actually concerning though, especially given the trend in deficits which shows no sign to abate because of the politics behind the deficit (most of the outlays can't be reduced without a reform of entitlements which is politically impossible).
The current spike is concerning, objectively
The sky hasn't been falling for a long time, lower interest rates for a long while made federal debt less problematic.
Recent developments are actually concerning though, especially given the trend in deficits which shows no sign to abate because of the politics behind the deficit (most of the outlays can't be reduced without a reform of entitlements which is politically impossible).
The current spike is concerning, objectively
I think the UK and Japan have higher interest percentages of GDP. I could be wrong.
BTW, you're making a great case for middle-class tax cuts and increasing taxes on wealth.
I think the UK and Japan have higher interest percentages of GDP. I could be wrong.
BTW, you're making a great case for middle-class tax cuts and increasing taxes on wealth.
UK has a bigger debt problem yes, not sure why that should be a relief for the USA though. France and Italy also have a bad debt problem.
Japan doesn't, interest on most of it is extremely low and I explained above how it's all japan-owned (and 70% of it isn't actual net debt)
Saying "The national debt doesn't matter if inflation is steady." is hilarious, but defending saying that statement is just sad.
Has the old saying goes ,
Debt do not matter until it does and when it matter, it’s the only thing that matters .
If the govt lowering interest rates leads to more inflation (according to many)
Does that mean that the govt raising interest rates causes prices to drop?
If the govt lowering interest rates leads to more inflation (according to many)
Does that mean that the govt raising interest rates causes prices to drop?
Not the *govt* but the central bank, but yes it's widely agreed upon that higher interest rates decrease the price level ceteris paribus
Central bank is controlled by the govt in the US is it not?
Chairman of the fed is appointed by the prez so to me that’s the govt
Central bank is controlled by the govt in the US is it not?
Chairman of the fed is appointed by the prez so to me that’s the govt
Well fed chair are nominated for 4 years .
So they are independent during those 4 years but if they want to return I guess yes they have to be more in line with the president wishes .
It’s the same pattern with SC justices I suppose tho for shorter terms .
