Posted on 12/08/2007 4:41:18 PM PST by shrinkermd
First, I hope you were just goshing about inflating anybody’s lip.
But, in any case, I checked some numbers for Boise. During the past few years, the typical household’s “living wage” (which takes changes in the cost of living into account) has grown from about $25,000 per year, to about $29,000 per (a total of 16% percent, or about 4% percent per year). Actual household income has grown just a tad faster than this. So far, things look o.k.
But, during this period, the median home price has grown from about $150,000 to about $225,000 (a total of about 50%, or about 12% per year). Therefore, for many people, who have had to buy a home in this pricey market, things aren’t so peachy keen at all. Not only are they stuck with a high mortgage payment relative to their income, but if they were to try to sell their house, they’d face the possibility of a substantial loss.
This illustrates what I said in a prior post (that the housing price bubble has distorted the inflation picture during the past few years).
Indeed, you are correct Toddster:
“I’ve studied M3 for years and found it to be the best road map of major economic trends. M3 is the broadest definition of the money supply: It includes coins, currency, checking accounts, money market funds, time deposits and institutional money market accounts.
The M3 does a better job of showing long-term trends by central bankers than either M1 or M2.”
So now they can print away...;)
Good explanation : ( I never heard of MO before though.
Which reminds me that hookers are getting pricey too!
Inflate or die
You stay healthy now! The sperm of the moment makes one forget about that!
That is the trap my friend.
LOL...you are being “toddsterpatrioted”.
In 1974, when I was a grad student at MIT, Digital Equipment Corporation gave MIT a very generous gift of RAM. The gift was 2 megabytes, then valued at $1M, and considered a major upgrade to a timesharing system that was supporting 70 simultaneous users.
My friend's upgrade was 2 gigabytes, or a thousand times as big, so in 1974 it would have been worth at least a billion dollars. Given that the new memory is probably at least 100 times as fast, draws about a millionth the power, and is about 1 million times as reliable, I'd say I can up the value to at least several billion dollars.
Not to mention, these are 1974 dollars we're talking about. In 2007 dollars (and 1974 technology) I gave my friend a $10B upgrade, for DIMMs that cost her less than $100.
Put that in your inflation pipe and smoke it.
We NEED the above...everything else is luxury except clothing.
Most of that clothing is being produced by the equivalent of slave labor in Bangldesh and China.
the government has been lying to people, and they know it.
This may sound silly to some, but buy real estate and commodities. Land. Gold. Oil. Wheat. Paper and logs. Barley. Grapes.
If you're a serious investor, buy beer.
For $2 and some time on the Internet (what's the opportunity cost of not visiting FreeRepublic?), I save $75 and a trip for me and my cat to the vet (which he hates). The massive decline in technology prices is also reducing the real cost of many other products and services (and the overall GDP, but that's another story).
Chinese accounting methods.
Try to buy the same house today with the dollars you had financed then. Your loss of buying power with those dollars of yesteryear will quickly be realized.
Trying THAT should REALLY account for a heap of “fun”....
Well...I imagine we are going to be pounded by stories like this up until the election. A few months from now the media will be saying that this is the worst economy since HW Bush.
I doubt that rents have increased that much. In many parts of the country, rents were flat even though housing prices increased substantially. Low interest and easy credit fueled the housing boom. Even though housing prices increased, low interest kept payments lower than expected. Now it housing prices have cooled and substantially decreased in many parts of the country. However, rents will increase as more people move from home ownership to renting.
A big problem with any inflation measure is that consumption and living patterns vary in many ways. Any single measure will be subject to critism that it is not realistic.
Exactly. If rents had increased in proportion to price (assuming interest rates were stable), then nobody would have said that house prices were disjoint from fundamental value. The fact that rents weren’t keeping up is what was making analysts increasingly nervous about the run-up in prices.
I’d have to guess that was per year over ten years.
“(which takes changes in the cost of living into account) has grown from about $25,000 per year, to about $29,000 per (a total of 16% percent, or about 4% percent per year).”
The feds say that the poverty line for a family of 7 is $31,000. Such jobs are rare in Boise.
That's for sure!
True story -
One day it was pouring rain outside - a real frog strangler.
At the same exact time the local TV weatherman announced clear skies and zero possibility of precipitation in the viewing area.
He had his formulas and computer models but he didn't have time, or perhaps, the insight or inclination to step outside and experience the true conditions firsthand.
There are a lot of people like that and they don't all go into the business of forecasting the weather.
Government officials, financial gurus, and other number twirlers can give us the big picture as they see it and believe it.
But what the guy outside the number factory sees is that eggs have jumped 100% in less than a year, milk is up 40% to 50%, bread prices are up big time, gasoline is 300% of what it was just a few years ago, local property taxes are up, beer is up and so is every other consumable.
People who spent $3-$4 thousand a year to heat their homes must now spend $6-$10 thousand and that is primarily due to the ongoing oil price explosion.
For the most part, the coming price increases from the devalued dollar haven't even been felt yet.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.