United States Heading towards a Depression?

Remember, Jim Williams @ Shadow Stats believes the CPI is understated by 5~7%. Now put that in your pipe and smoke it.

 

I'm not sure I agree entirely. I mean if you look at the CPI historically over a 50+ year time period, it has a pretty consistent percentage rise over time.

http://research.stlouisfed.org/fred2/data/CPIAUCSL.txt

Even if it were off by say 5 percentage points, in the overall scheme of things, I hardly doubt it would make a difference in the historical pattern rise.

If it were say 10 or higher, I could agree....

 

Yeah. A pretty consistent rise is likely less statistically probable...

I'd like to see CPI indexed against M2. Hmmm....

 

Ok, but to be fair, should we not do that over a larger period than just BUSH...? I mean to be completely consistent, should we not look back as far as we can and compare and contrast with each administration? Much of what makes up the US economy is reliant on so much more than just 7+ years of Bush. The policies of FDR still haunt our society and have left us with the burden of social security and other entitlements that have played into the difficulties in our spend and tax economy.

 

For sure brother. I'm not a BDS guy even though I complain about him. You know I am not too fond of Clinton either.

Actually, it's Clinton who did the most damage recently to the macro economic measurements.

 

There's a multitude of bad domestic policy over at least the last 20 recent years that have aided in the waste and haste with regard to our debt and income as a country.

What I'd like to see is a temporary return to the suffering and sacrifice of WWII America. The sale of war bonds to pay for our war on terror (then only those that feel they want to support the war will pay, and those that do not, have little to complain about), that and rationing, conservation, and lights out days, no gas days, things like this could greatly begin to raise more awareness and reduce our dependancy on foreign energy, as well as our own energy.

The only way we will ever reduce debt is to actually pay it down. I'm not saying stop spending, just cut spending and use that money to pay down debt. The problem with this "surplus" everyone talked about in the Clinton years was that everyone I've talked to really thought that "surplus" was money just laying around, ie., that our debt was paid off, we owed nothing and had money in the bank.

The reality is, that surplus was nothing more than feel good numbers on paper that said, well, we did not spend as much as we budgeted for, so we have some money left over. The problem was, there was no money left over.

To illustrate. Lets say you budget $500 for your household expenses. But, you only spend, $200. You have a surplus of $300, right?

Seems cool..money in the bank. The only problem? When you budgeted that $500, you only brought in $50 in real income. So in other words, you are really budgeting yourself, $450 in the hole, that $300 surplus is money you never had, and in reality you are $150 in the hole...

That there is CLINTONOMICS 101!

Why people don't get this is beyond me. Surplus.. Next time I hear someone say that I'm gonna puke.

 

The Labor Department reported Friday that the CPI rose by 0.6 percent last month.

RealtyTrac also reported Friday that US foreclosure filings surged 48 percent in May

http://biz.yahoo.com/ap/080613/foreclosure_rates.html

 

People need to stop living beyond their means, PERIOD. I know so many people that have 3 credit cards, all maxed out on TVs and clothes.

I wish more people would listen to Dave Ramsey on the radio. Very smart guy, and his techniques are total common sense.

I once had a coworker tell me I was a "bad American" because I wasn't drowning in debt!

 

It is not about dollars, it is about interest and percentage. I was never found of monopoly economy of last decade with 100% /month profit. Give me 15% /year and I am happy. I can borrow money relatively cheap against my assets, so in a long run, I will get the property for free. It will not matter for me if the price of the property in 10-15 years is higher, lower or the same, it hasn't cost me anything. Historically speaking real estate goes through it's up and down but in historical perspective will keep up with inflation.

 

This building is a block from the hudson river. I don't think that you could make 15% even with 7 units @ $489,000

http://www.weichert.com/search/real...P=19504645&zip=07087&q=07087&mls=44,9,13&pg=5

 

No problem then you just don't buy it. The good thing about buying as investment is that you don't care what or where it is, it all about number. Awhile back when economy was depressed in Northern BC, due to American softwood lumber duty, I bought a 100 unit apartment complex, really cheap and it has almost paid for itself in 8 years.
There are some parts of USA that market is really bad and you can pick up properties for next to nothing when you can pay cash.

 

I could not agree more... These are the morons that are in foreclosure, crying and whining how the economy is so bad... Booo HOOO!!!

 

I agree too. And, I'll just add one more thing. American kids need to suck up their pride and go and live with their parents if they have to while they get themselves out of debt. Anywhere else in the world, living with parents to save money is not looked down upon.

 

The market hasn't hit bottom yet in the New York metro. The ROI on units like that is 2%-5% but you good come in at a loss due to repairs and vacant units. Once the FED raises rates the real bargins will appear for people with cash.

 

That is what I mean with monopoly economy. In Vancouver ROI is about 4-5% also. Why the hell you should buy something that you will lose money on every month? Casino economy. Let's throw the dice and hope the price increases and covers the operational loss.
In previous real economy, no one would even think about buying Real estate with less than 10% ROI.

 

What little hot air the Fed and Paulson injected into the dollar has deflated. Oil is back up to $140. Worse yet the flooding in the US corn belt is going to put food prices through the roof. The US grain reserves grain elevators are near empty and there are no reserves to cushion against price shocks.

It's starting to look like the 1970s all over again.

That's why housing/real estate is crashing. The prices are out of sync with fundamentals.

 

50 cent fuel.

http://www.smh.com.au/news/world/happy-motoring-means-a-50c-fuel-bill/2008/06/16/1213468329453.html

 

The good thing about high fuel costs are it is finally going to force not only the consumer, but ultimately the automakers to innovate. Something they have not bothered to do since the 70's.

 

The US has no grain reserves. So anything will cause a major world spike in food prices. The United States exports 54 percent of the world's corn, 36 percent of its soybeans and 23 percent of its wheat.

The farmland flooding in the US Midwest is already causing food prices to increase. Corn prices at the Chicago Board of Trade soared above $8 a bushel for the first time on Monday and stayed near there on Tuesday amid fears midwestern farmers will not be able to grow anything on as many as 5 million acres.

http://news.yahoo.com/s/nm/20080618/us_nm/usa_flooding_dc;_ylt=AlZP6bOSgekbZkMM9HRiw5dH2ocA

“According to the May 1, 2008 USDA’s Commodity Credit Corporation inventory report there are o­nly 24.1 million bushels of wheat in inventory, so after this sale there will be o­nly 5.73 million bushels of wheat left the entire CCC inventory,” warned Matlack. “Our concern is not that we are using the remainder of our strategic grain reserves for humanitarian relief. AAM fully supports the action and all humanitarian food relief. Our concern is that the U.S. has nothing else in our emergency food pantry. There is no cheese, no butter, no dry milk powder, no grains or anything else left in reserve. The o­nly thing left in the entire USDA’s Commodity Credit Corporation inventory will be 5.73 million bushels of wheat which is about enough wheat to make about 1/2 of a loaf of bread for each of the 300 million people in America.”

http://www.tristateobserver.com/modules.php?op=modload&name=News&file=article&sid=10121