Comments on: Mainstream contrarianism crushed http://sovereignspeculator.com/2008/08/18/mainstream-contrarianism-crushed/ Thoughts on the markets and the decline of the west Sun, 28 Nov 2010 15:01:51 +0000 http://wordpress.org/?v=2.6 By: Mike http://sovereignspeculator.com/2008/08/18/mainstream-contrarianism-crushed/#comment-91 Mike Tue, 19 Aug 2008 22:48:10 +0000 http://sovereignspeculator.com/?p=477#comment-91 FDR's wage controls didn't reflate anything--they just gave us 25% unemployment. Even with Social Security checks today, job losses are deflationary. People saved the last stimulus checks or paid down debt--something like 16% of the $150B was spent, and the US savings rate jumped to a whopping 2.6% in the second quarter. Even $1000 or $5000 more would not keep prices up with unemployment soaring. Any more would risk a bond market collapse, and the government needs its low rates to finance the deficit. FDR’s wage controls didn’t reflate anything–they just gave us 25% unemployment. Even with Social Security checks today, job losses are deflationary.

People saved the last stimulus checks or paid down debt–something like 16% of the $150B was spent, and the US savings rate jumped to a whopping 2.6% in the second quarter. Even $1000 or $5000 more would not keep prices up with unemployment soaring. Any more would risk a bond market collapse, and the government needs its low rates to finance the deficit.

]]> By: hcrosby http://sovereignspeculator.com/2008/08/18/mainstream-contrarianism-crushed/#comment-90 hcrosby Tue, 19 Aug 2008 21:06:17 +0000 http://sovereignspeculator.com/?p=477#comment-90 No, Barack is going to make sure that our wages stay high, and furthermore, he's going to send each of us $1000 to help with our gasoline bills! How about that? No, Barack is going to make sure that our wages stay high, and furthermore, he’s going to send each of us $1000 to help with our gasoline bills! How about that?

]]> By: Mike http://sovereignspeculator.com/2008/08/18/mainstream-contrarianism-crushed/#comment-89 Mike Tue, 19 Aug 2008 20:09:51 +0000 http://sovereignspeculator.com/?p=477#comment-89 We just paid $2.99 for a very good 2-person pizza with fresh tomatoes and pesto at a nice little place with table service. Their slightly fancier competitor 2 doors down charges $4.00 for an equally good pie with 2 toppings. How is it that food is so much cheaper in Panama when the materials costs are the same? Wages are lower. They must fall a lot in the US if the country will ever be competitive again. We just paid $2.99 for a very good 2-person pizza with fresh tomatoes and pesto at a nice little place with table service. Their slightly fancier competitor 2 doors down charges $4.00 for an equally good pie with 2 toppings.

How is it that food is so much cheaper in Panama when the materials costs are the same? Wages are lower. They must fall a lot in the US if the country will ever be competitive again.

]]> By: Mike http://sovereignspeculator.com/2008/08/18/mainstream-contrarianism-crushed/#comment-88 Mike Tue, 19 Aug 2008 18:27:29 +0000 http://sovereignspeculator.com/?p=477#comment-88 Howard, I didn't know you were into the whole organic, artisanal food thing! But seriously, I don't think these food prices can hold out much longer, considering that there is about 13 cents worth of wheat in a 1 lb loaf, even with $8-a-bushel wheat. The rest is all labor and health care and all kinds of fat that will be trimmed when consumers start to balk at these prices, rather than pay them and complain. Howard, I didn’t know you were into the whole organic, artisanal food thing!

But seriously, I don’t think these food prices can hold out much longer, considering that there is about 13 cents worth of wheat in a 1 lb loaf, even with $8-a-bushel wheat. The rest is all labor and health care and all kinds of fat that will be trimmed when consumers start to balk at these prices, rather than pay them and complain.

]]> By: hcrosby http://sovereignspeculator.com/2008/08/18/mainstream-contrarianism-crushed/#comment-87 hcrosby Tue, 19 Aug 2008 15:57:09 +0000 http://sovereignspeculator.com/?p=477#comment-87 Today's just released numbers for the PPI showed an annual inflation rate 0f 14.4% "Core" inflation running at 8.9%. More shockingly, I just paid $4.08 for a loaf of bread. I really need for this deflation to hurry up and get here! Today’s just released numbers for the PPI showed an annual inflation rate 0f 14.4% “Core” inflation running at 8.9%.

More shockingly, I just paid $4.08 for a loaf of bread. I really need for this deflation to hurry up and get here!

]]> By: Mike http://sovereignspeculator.com/2008/08/18/mainstream-contrarianism-crushed/#comment-84 Mike Mon, 18 Aug 2008 23:02:54 +0000 http://sovereignspeculator.com/?p=477#comment-84 This should scare a few contrarians: Business Week is talking about double digit inflation. You know what that means. http://www.businessweek.com/bwdaily/dnflash/content/aug2008/db20080815_021990.htm?chan=top+news_top+news+index_news+%2B+analysis This should scare a few contrarians: Business Week is talking about double digit inflation. You know what that means.

http://www.businessweek.com/bwdaily/dnflash/content/aug2008/db20080815_021990.htm?chan=top+news_top+news+index_news+%2B+analysis

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