Just to assuage any fears of conspiracies, the CPI is run by the University of Michigan if I remember correctly; not the federal government.

As for average rent, one could argue that it takes years for average gas prices to change. That argument would be fallacious.


Yeah; it costs 3 times as much today. But this is over 30 years. That gives us 3.7% inflation.


If the dollar is going to continue to devalue, it seems that taking fixed rate loans out would be a wise move.


Except for oil, coal, railroads, mining, and non-fossil-fuel-heavy utilities.

There's a lot of opportunity out there for the individual investor, particularly if you know about Peak Oil. Things are going to change. Change could be to our favor if we move to the right place. Solar panels, wind, hydro all will be in better and better shape as the rest of the economy goes down. It's clear to me. Anything non fossil fueled good, fossil fuel bad. You can ride the oil companies or play the futures game, but in the medium to long term, even they are dead. Get with the new energy now, it'll be a better ride. The answer comes up every morning.

Just one little problem there. It seems that over 40% of S&P profits come from the financial sector. This means that nearly half of the US economy operates by shuffling financial papers around and deriving profits from finance fees and interest rate differentials.

This fragile balloon is kept aloft by a high-pressure hose of low-interest funny money. If short-term interest rates are raised near to or above the actual 5-7% inflation rate, the balloon will violently deflate and take the US "service economy" with it. Say goodbye to the hyper-inflated real estate residential sector- which is the only dynamic sector in the US outside of the military weaponry business.

And there won't be many foreign lenders around to re-inflate US hyper-consumer economy at that point. It will be a long, long haul to rebuild ourselves into a real manufacturing economy again...maybe impossible with the impending Peak Oil emergency.

The Current Account Deficit (CAD) is unsustainbale and must be corrected.

How?

There are only three ways:

1. Increase savings (highly unlikely)
2. Increase exports by 51% (never happen)
3. Raise interest rates to curb spending and hope nothing breaks. (current policy)

Right, and keep in mind that by following option #3 interest costs keep accelerating. The $1 trillion that the US takes in during 2005 costs about $40 billion a year in interest - more or less forever - from now. That means the US must finance a greater and greater CAD every year if nothing else is done, or happens.

I don't see how anything the fed does will help to weather this storm. I think complete economic collapse is inevitable.

prices are way up, savings are down, interest rate hikes are regular, Yet this past weekend consumers spent 22% more then they did last year. I don't think the fed has the ability to stop people from running themselves into the ground.

I don’t think as many consider the several problems as much as you think.

I also don’t think most people need an argument since they don’t consider the possibility of a substantial crash in the first place. The part of the population doing the most spending today has had little experience – even second hand, at any major upheavals in their lives. I have a family member in his late ‘30s considering pulling money from his home again – and compared to his friends he’s conservative.

Real Estate always goes up, right?

My god, and they haven't even gotten their real look at heating bills this year. I think alot of people are going to go down this winter.

No kidding...

Nation's spending out of line



So, where will the money come from to cover this and build an entire renewable energy infrastructure while 88 million baby boomers retire on unfunded entitlements?

Hmm?

Link

The actual size of the gubbermint deficit is only part of the horror story. The other part is that most of it is currently financed in short-term lower-interest obligations....as short-term interest rates rise, the new debt + the re-issued older debt will have much higher "monthly payments".

If US debt is ever viewed like Argentine debt, sharply higher interest rates will be demanded by domestic and foreign lenders. Then the cost of refinancing all those old deficits will break the bank.

1) Getting rid of corrupt legislators.
2) Redistributing the wealth from the top 1% to the bottom 80%.
3) Taxing the crap out of mega-corporations to pay for the deficit.
4) Getting out of Iraq and cutting military spending.
5) Regulating CEO pay and insurance company profits.
6) Establishing single-payer universal health care.
7) Nixing the Federal Reserve.
8) Reinstating Usury Laws
9) Rescinding the Bankruptcy Law.

The big ones are numbers 1 & 2. The rest flow from that.

If you try to do number 1 then those that are corrupt and in power will use that power to crush you and try and stop the movement.

If you try to do number 2 then all of the wealth will simply flee the country and leave behind a used up hulk thirdworld wasteland.

Even if you go through with it and manage to force things through then the pattern will be repeated elsewhere over and over until there is nowhere left. I don't know if a civiliation can be turned to crap and then recover enough to be worth turning to crap again. I doubt it

That is anything but simple, and the attempt is likely to cause chaos.



That would bring the mega-corporations down (which I guess is what you're after), which would put their thousands of employees on the street, and put the economy belly-up besides.

The rest I think are technically possible. But I doubt they would solve US economy.

Your talking civil war. At that point you might as well default, call your currency worthless and start over. But that would have some ramifications with our creditors I would imagine.