Debt Rattle July 25 2015

 

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  • #22688

    Harris&Ewing Calvin Coolidge Inaugural Ball. March 4, Washington DC 1925 • Emerging Market Currencies Fall to Record Low in ‘Violent’ Selloff (Bloombe
    [See the full post at: Debt Rattle July 25 2015]

    #22689
    Variable81
    Participant

    Not sure if this has already been posted somewhere, but it’s a worth a read:

    Nine Reasons Why Low Oil Prices May “Morph” Into Something Much Worse

    Cheers,
    Variable

    #22690
    John Day
    Participant

    Pepe Escobar works a lot for Russia Today, and also for the Asia Times. If he called imminent-collapse on the Chinese economy, he would lose a lot of access, maybe a job or two, right? He might be a criminal in China, too.

    #22691
    Raleigh
    Participant

    John – I’ve read several of Pepe Escobar’s articles re China, and to me they always seem very biased towards China. Like all journalists nowadays, I think they have to watch what they say or they might lose access or, worse, their jobs. The articles I’ve read by him are not investigative as far as China’s problems; they’re all rah-rah.

    #22692
    Raleigh
    Participant

    Variable – I think that a lot of the rise in metal commodity prices was purely due to speculation/hoarding. Prices have to come down. As far as wages go, Karl Denninger had a piece re Seattle raising their minimum wage to $15.00/hour and how people are now asking for fewer hours because of it.

    “Seattle’s $15 minimum wage law is supposed to lift workers out of poverty and move them off public assistance. But there may be a hitch in the plan.

    Evidence is surfacing that some workers are asking their bosses for fewer hours as their wages rise – in a bid to keep overall income down so they don’t lose public subsidies for things like food, child care and rent.”

    https://market-ticker.org/akcs-www?post=230411

    Workers no doubt have been getting squeezed, but instead of raising wages, how about corporations, CEO’s, stock holders taking a little less (or a lot). What’s the point of raising wages when the cost just gets passed along to the end consumer, who eventually stops buying because he can no longer afford it, and up and down we go on an endless roller coaster.

    What I can’t wrap my mind around is Gail Tverberg’s site is called Our Finite World and yet she says, “If the economy is to grow again, demand for all commodities needs to rise to the point where it makes sense to extract more of them.” As Nicole said in her video, maybe we didn’t really ever need electric can openers or toothbrushes. People who want more and more growth are the problem, at least to me.

    And under her heading “Declining interest rates stimulate the economy for many reasons,” nowhere does she mention that lower and lower interest rates have pulled forward demand, which caused prices to rise on everything in the first place: houses, cars, tuition, vacations, furniture, commodities, etc. I don’t have time to dissect the article, but even I could go on and on.

    It’s a good article and it might be factual, but it is not deep. Workers wages don’t need to rise; everything else needs to go down because it’s all been built on air.

    #22726
    Chris M
    Participant

    Raleigh,

    If you consider not raising wages to be good for the economy, then we need to take that to the logical extreme and give workers $0.00 for wages, because then companies could really reduce the price of their products and make them affordable.

    The truth is, we have an income problem. The economy as a whole could be represented by an old fashioned T-account. On one side of the T-account you have all the income of the economy–income of sole proprietors, farms, corporations, and people renting out property. On the other side you have the costs of the economy–wages and interest. There are only 2 costs, because every other business cost is someone else’s income. The economy is in balance when the income is in balance with the costs. Today we have an imbalance. What is that? Many businesses as a whole, especially raw material (commodity) producers, have an income shortage and are making it up with debt, and consumers (wage earners) also have an income problem and are going without (poverty) or making it up with debt slavery (private borrowing, or government borrowing for them and giving them welfare). So, in that T-account I mentioned, who is benefiting, or where is the bubble?? It is the interest sector, or in other words, those who are lending out money and collecting interest on it. As we know, in countries all over the world, a fair portion of that is fiat currency created out of thin air. It’s good work if you can get it–creating money and collecting interest on it.

    So, my point is that wages (and interest) need to be in balance with business income and rentals to have a prosperous economy. Consumers need to be paid a parity wage to consume their own production. As Henry Ford is reported to have said–“I pay my workers a good wage so they can buy my cars.”

    Furthermore, I honestly don’t know all of what Nicole has said. I haven’t read everything she wrote, which would be a big task because I know she writes a ton. Nevertheless, if we really don’t need electric can openers and electric toothbrushes, why stop there? Do we really need the internet? Cell phones? Televisions? Radios? Cars? Planes? Trains? Carpeting in your living room? When we apply labor to the natural and recycled resources of the world, we create a better standard of living for ourselves, no? If people want to go back to primitive times, I have no problem with them doing so. However, if I want to make my life better for myself in different ways, should I not do so? Just a thought.

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