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Fairfax Underground
Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
Deflation Is Here
Posted by:
Vince(1)
()
Date: January 16, 2009 07:02PM
For the 4th month in a row the inflation indieces have gone down. You have to go back 15 months to get to a month with a higher inflation index.
Deflation is a killer for anyone who owes debt...you are payng back with dollars worth more then those you borrowed.
Edited 1 time(s). Last edit at 01/16/2009 07:03PM by Vince(1).
Deflation is a killer for anyone who owes debt...you are payng back with dollars worth more then those you borrowed.
Edited 1 time(s). Last edit at 01/16/2009 07:03PM by Vince(1).
Re: Deflation Is Here
Posted by:
WashingToneLocian
()
Date: January 16, 2009 11:02PM
Deflation is not here, but it is pretty close.
The good news about lower prices is that it gives the Feds some room to work. The Treasury can actually print more money now and artificially increase the money supply. It is not ideal, but given our circumstances, it is one of the few monetary policy tools the Federal Government has left.
Edited 1 time(s). Last edit at 01/16/2009 11:03PM by WashingToneLocian.
The good news about lower prices is that it gives the Feds some room to work. The Treasury can actually print more money now and artificially increase the money supply. It is not ideal, but given our circumstances, it is one of the few monetary policy tools the Federal Government has left.
Edited 1 time(s). Last edit at 01/16/2009 11:03PM by WashingToneLocian.
Re: Deflation Is Here
Posted by:
OMG
()
Date: January 17, 2009 12:11AM
How does that work? How can the Treasury just print more money? Don't they take old money out of service before they print new money?
Re: Deflation Is Here
Posted by:
Bob
()
Date: January 17, 2009 12:46AM
OMG Wrote:
-------------------------------------------------------
> How does that work? How can the Treasury just
> print more money? Don't they take old money out of
> service before they print new money?
They would have to take old money out of circulation before printing new money if we were on a gold standard.
Now, the government can borrow more money from the federal reserve, print dollars, and spend it before the increased supply of money affects the value of each dollar. We absorb the devaluation, the government gets the benefit of printing more money.
If our entire economy was worth $100, and there were 100 dollars circulating, and the fed prints 100 more and spends it, eventually the dollar in your pocket would be worth 50 cents compared to before they printed the extra 100 dollars.
-------------------------------------------------------
> How does that work? How can the Treasury just
> print more money? Don't they take old money out of
> service before they print new money?
They would have to take old money out of circulation before printing new money if we were on a gold standard.
Now, the government can borrow more money from the federal reserve, print dollars, and spend it before the increased supply of money affects the value of each dollar. We absorb the devaluation, the government gets the benefit of printing more money.
If our entire economy was worth $100, and there were 100 dollars circulating, and the fed prints 100 more and spends it, eventually the dollar in your pocket would be worth 50 cents compared to before they printed the extra 100 dollars.
Re: Deflation Is Here
Posted by:
Bob
()
Date: January 17, 2009 01:03AM
Vince(1) Wrote:
-------------------------------------------------------
> For the 4th month in a row the inflation indieces
> have gone down. You have to go back 15 months to
> get to a month with a higher inflation index.
>
> Deflation is a killer for anyone who owes
> debt...you are payng back with dollars worth more
> then those you borrowed.
That's why it is always better to only use credit sparingly, when you can leverage it to your advantage and have the capacity to pay off that debt quickly in times like these. Or, even better, only take on debt in emergencies, not for luxuries or things you don't have to have right now but just really want.
I have made it a point to be debt free ever since I got myself in over my head a few years after college. I don't buy anything I can't afford to pay for outright. If I can't pay cash for a car, I don't buy it. The only debt I've had in the last 16 years was my mortgage, and I struggled and scrimped and saved every way possible to pay off my mortgage in 5 1/2 years. I even rented out rooms and applied all my rental income on top of my regular mortgage payments, and put almost all my bonuses and anything I didn't spend at the end of each month into additional mortgage payments. Maybe I would have been better off carrying some mortgage debt and using some of that money to invest or putting more into my 401(k), etc, but for some reason I just feel more comfortable not owing anything. I guess because of how painful it was when I almost drowned in debt soon after college.
It's possible to have a reasonable amount of nice toys and other "luxuries" without living beyond your means. You just have to be a conscientious consumer, not a mindless consumer, chasing after every new gadget and fad.
-------------------------------------------------------
> For the 4th month in a row the inflation indieces
> have gone down. You have to go back 15 months to
> get to a month with a higher inflation index.
>
> Deflation is a killer for anyone who owes
> debt...you are payng back with dollars worth more
> then those you borrowed.
That's why it is always better to only use credit sparingly, when you can leverage it to your advantage and have the capacity to pay off that debt quickly in times like these. Or, even better, only take on debt in emergencies, not for luxuries or things you don't have to have right now but just really want.
I have made it a point to be debt free ever since I got myself in over my head a few years after college. I don't buy anything I can't afford to pay for outright. If I can't pay cash for a car, I don't buy it. The only debt I've had in the last 16 years was my mortgage, and I struggled and scrimped and saved every way possible to pay off my mortgage in 5 1/2 years. I even rented out rooms and applied all my rental income on top of my regular mortgage payments, and put almost all my bonuses and anything I didn't spend at the end of each month into additional mortgage payments. Maybe I would have been better off carrying some mortgage debt and using some of that money to invest or putting more into my 401(k), etc, but for some reason I just feel more comfortable not owing anything. I guess because of how painful it was when I almost drowned in debt soon after college.
It's possible to have a reasonable amount of nice toys and other "luxuries" without living beyond your means. You just have to be a conscientious consumer, not a mindless consumer, chasing after every new gadget and fad.
Re: Deflation Is Here
Posted by:
Vince(1)
()
Date: January 17, 2009 06:20AM
Bob Wrote:
-------------------------------------------------------
> OMG Wrote:
> --------------------------------------------------
> -----
> > How does that work? How can the Treasury just
> > print more money? Don't they take old money out
> of
> > service before they print new money?
>
>
> They would have to take old money out of
> circulation before printing new money if we were
> on a gold standard.
>
> Now, the government can borrow more money from the
> federal reserve, print dollars, and spend it
> before the increased supply of money affects the
> value of each dollar. We absorb the devaluation,
> the government gets the benefit of printing more
> money.
>
> If our entire economy was worth $100, and there
> were 100 dollars circulating, and the fed prints
> 100 more and spends it, eventually the dollar in
> your pocket would be worth 50 cents compared to
> before they printed the extra 100 dollars.
To qoute a great American..."Do not nail me on this cross of gold!" Being on the gold standard would put us back into 18th century economic theory...not good for debtors at all...debtors want a slow...controlled inflation rate.
-------------------------------------------------------
> OMG Wrote:
> --------------------------------------------------
> -----
> > How does that work? How can the Treasury just
> > print more money? Don't they take old money out
> of
> > service before they print new money?
>
>
> They would have to take old money out of
> circulation before printing new money if we were
> on a gold standard.
>
> Now, the government can borrow more money from the
> federal reserve, print dollars, and spend it
> before the increased supply of money affects the
> value of each dollar. We absorb the devaluation,
> the government gets the benefit of printing more
> money.
>
> If our entire economy was worth $100, and there
> were 100 dollars circulating, and the fed prints
> 100 more and spends it, eventually the dollar in
> your pocket would be worth 50 cents compared to
> before they printed the extra 100 dollars.
To qoute a great American..."Do not nail me on this cross of gold!" Being on the gold standard would put us back into 18th century economic theory...not good for debtors at all...debtors want a slow...controlled inflation rate.
Re: Deflation Is Here
Posted by:
WashingToneLocian
()
Date: January 17, 2009 08:08AM
Vince(1) Wrote:
-------------------------------------------------------
>
>
> To qoute a great American..."Do not nail me on
> this cross of gold!" Being on the gold standard
> would put us back into 18th century economic
> theory...not good for debtors at all...debtors
> want a slow...controlled inflation rate.
This same "great American" led the case against Evolution in the Scopes Monkey Trial.
-------------------------------------------------------
>
>
> To qoute a great American..."Do not nail me on
> this cross of gold!" Being on the gold standard
> would put us back into 18th century economic
> theory...not good for debtors at all...debtors
> want a slow...controlled inflation rate.
This same "great American" led the case against Evolution in the Scopes Monkey Trial.
Re: Deflation Is Here
Posted by:
WashingToneLocian
()
Date: January 17, 2009 12:43PM
MrMephisto Wrote:
-------------------------------------------------------
> EVERYBODY PANIC.
Or get in line...
My biggest concern is that nobody seems to be doing a damn thing to change the banking structure that is in place. I hope Obama smacks these idiots in Congress around.
-------------------------------------------------------
> EVERYBODY PANIC.
Or get in line...
My biggest concern is that nobody seems to be doing a damn thing to change the banking structure that is in place. I hope Obama smacks these idiots in Congress around.
Re: Deflation Is Here
Posted by:
Vince(1)
()
Date: January 17, 2009 03:07PM
WashingToneLocian Wrote:
-------------------------------------------------------
> Vince(1) Wrote:
> --------------------------------------------------
> -----
>
> >
> >
> > To qoute a great American..."Do not nail me on
> > this cross of gold!" Being on the gold
> standard
> > would put us back into 18th century economic
> > theory...not good for debtors at all...debtors
> > want a slow...controlled inflation rate.
>
>
>
> This same "great American" led the case against
> Evolution in the Scopes Monkey Trial.
Are you proposing a retrn to the gold standard?
Edited 1 time(s). Last edit at 01/17/2009 03:07PM by Vince(1).
-------------------------------------------------------
> Vince(1) Wrote:
> --------------------------------------------------
> -----
>
> >
> >
> > To qoute a great American..."Do not nail me on
> > this cross of gold!" Being on the gold
> standard
> > would put us back into 18th century economic
> > theory...not good for debtors at all...debtors
> > want a slow...controlled inflation rate.
>
>
>
> This same "great American" led the case against
> Evolution in the Scopes Monkey Trial.
Are you proposing a retrn to the gold standard?
Edited 1 time(s). Last edit at 01/17/2009 03:07PM by Vince(1).
Re: Deflation Is Here
Posted by:
WashingToneLocian
()
Date: January 17, 2009 04:35PM
WashingToneLocian Wrote:
-------------------------------------------------------
> Vince(1) Wrote:
> --------------------------------------------------
> -----
>
> >
> >
> > To qoute a great American..."Do not nail me on
> > this cross of gold!" Being on the gold
> standard
> > would put us back into 18th century economic
> > theory...not good for debtors at all...debtors
> > want a slow...controlled inflation rate.
>
>
>
> This same "great American" led the case against
> Evolution in the Scopes Monkey Trial.
No. I just think it is ironic that you call Williams Jennings Bryan a "great American" when he advocated many other things you rail against.
-------------------------------------------------------
> Vince(1) Wrote:
> --------------------------------------------------
> -----
>
> >
> >
> > To qoute a great American..."Do not nail me on
> > this cross of gold!" Being on the gold
> standard
> > would put us back into 18th century economic
> > theory...not good for debtors at all...debtors
> > want a slow...controlled inflation rate.
>
>
>
> This same "great American" led the case against
> Evolution in the Scopes Monkey Trial.
No. I just think it is ironic that you call Williams Jennings Bryan a "great American" when he advocated many other things you rail against.
Re: Deflation Is Here
Posted by:
conVince
()
Date: January 17, 2009 09:08PM
WashingToneLocian Wrote:
-------------------------------------------------------
> My biggest concern is that nobody seems to be
> doing a damn thing to change the banking structure
> that is in place. I hope Obama smacks these idiots
> in Congress around.
Other than nationalizing many banks? For those who keep up with the financial aspect of our country, we see much change. Are you proposing things that aren't being done now? I'm not saying enough is being done or that the things done are correct, I'm genuinely interested in hearing new ideas.
-------------------------------------------------------
> My biggest concern is that nobody seems to be
> doing a damn thing to change the banking structure
> that is in place. I hope Obama smacks these idiots
> in Congress around.
Other than nationalizing many banks? For those who keep up with the financial aspect of our country, we see much change. Are you proposing things that aren't being done now? I'm not saying enough is being done or that the things done are correct, I'm genuinely interested in hearing new ideas.
Re: Deflation Is Here
Posted by:
Vince(1)
()
Date: January 18, 2009 12:08AM
Undoubtedly WJB was a man of his time...and a better lawyer and economist then anthropologist.