I agree mostly too, I WISH there was enough selection and value at any other local stores to keep me and my family OUT of Wal-Mart. Put in the most basic terms, "Wal-Mart is Dangerous".

Edwin mentions Credit: HUGE FREAKIN' PROBLEM, espically for the folks fresh out of school trying to make a go, having credit cards jammed down their throat left and right.
Shovel writes of the fact that we are now (since the early 80's) a "throw away society", also a HUGE PROBLEM.
Were doomed, how long will it take to evolve into another depression like the 30's, who knows. ?
Seriously though, there a studies out there that show how a certian number of Americans walk into Wal-Mart on Friday night, spend 60 some percent of their weekly household income, and go about their life. It takes real competition to make for a fair market, With one Mosnter Retailer who offers Health insurance to less than HALF of it's Employees, and don't get me started on their crap pay schedule. Tell me that that's how the are able to offer their low prices, come one............

 

i had an interview with a guy a couple of days ago, he used to work for ford in the manufacturing of f250s. at peak production, he said they were at 80 trucks/hour.

i studied engineering, but i feel efficiency could also be our downfall. 1 robot to replace 5 workers, etc etc. do we NEED 80 trucks/hour from that one plant? no, but since we CAN we do (provided the market is there to purchase them).

what i dont understand about inflation, is the time it takes for our incomes to reflect it. gas goes up and down each day (i understand it isnt strictly inflation) but how often has your paycheck gone up/done each day, week, month? i like a steady paycheck, but if the price of consumer products goes up as a result of higher fuel prices why shouldnt our paycheck as well to compensate? ***remember this comment is strictly based off an inflation conversation, i know there is more to it***

what can we do about it? maybe keep our trucks til they fall apart, if your lawnmower doesnt work than fix it before buying a new one, or for the ladies out there dont buy a dress only to wear it once then keep it in the closet for 20 years. but if we did this, what would happen to our economy? hmmm...

too much thinking, need food

Pat

 

Chrysler was pumping out 420 Durangos X's 2 shifts a day X's 5 day's a week.
This was in late 98-99. Who in the world was buying them???
They would push and push and push, ........... Then Lay Off??
Glad I'm self employed now. Except for the little issue of not getting a paycheck for weeks at a time.

 

The CEO of the company I work for makes $47,000 an hour. He was crying that due to the high cost of union labor, the company didn't make it's projected earnings this quarter. Poor pitiful CEO. I suffered terribly this year too. I had a projected earnings of $100,000. But due to the high cost of management, my earnings fell short by about $70,000. I wonder if I could claim a $70k loss on my taxes and not pay any or get a subsidy?
Yep. Gas is still relatively cheap. That's why I didn't hesitate to take advantage of the rediculously low price I was offered for the '05 Hemi powered Ram. It's the latest fad to run out and buy a $35k gas sipper to save money.
I was browsing through a JC Penny sale flyer yesterday while having lunch with the wife. Not at Hop's with the management crowd. At Arby's with the lowlifes. The prices in JC Penny's flyer also list where the product is made. It's amazing they sell anything at all with the high prices they advertise as sale prices but, the similar products made here or in Malaysia are comparably priced. These are kitchen appliances and gimmicks. Not clothes. Then I picked up a flyer from Office Depot. $549.99 for a cheap metal rack for construction paper rolls for the classroom! And it was imported from Malaysia. Let's get real! It's not about the high cost of labor in this country. It's about the cheapest labor a company can possibly employ to boost profits to the point of $47,000 an hour for one person. Add in all the salaries for upper and middle management and union labor sounds pretty cheap.

 

Good topic HOHN. I think you must be Canadian, well close enough. On this topic there is no border.

 

The root of all our economic problems in America started in the 1920's. Rash spending and out of control government budgets led to a stock market crash. Then FDR took us off the gold standard and not only violated the constitution, the washed away any traces of an honest money system. Now the government could simply "create" money by printing fiat paper dollars. The end effect was that the country could simply inflate out debt away. In other words we could drive the value of our dollars down so low that we could pay back our debts using worthless paper money. What a bargain! God I wish I was in the government! The gold standard was put into place to force honesty in money and to keep government spending under control by not allowing our leaders to play shell games with paper money. No honest money, no real economy. Read "How an Economy Grows and Why It Doesn't" by I Schiff. It's a lesson on real economics in comic book form. My 10 year old daughter knows more about economics than some four year grads all because she reads and understands this book.

 

What most people don't understand, because they've been systematically deceived for years, is that inflation is NOT rising prices. Inflation is an increase in the supply of fiat currency and credit without a matching increase in the supply of goods and services. More money chasing a limited supply of things to spend it on = higher prices.

Governments love fiat currencies because they can spend money that they don't need to first collect in taxes. In fact, they NEVER collect the money they just keep on borrowing from the Fed which happily prints the money (or creates credit) out of thin air. Because future dollars are less valuable they can pay back the loans with money that's printed for the purpose.

Unfortunately, wages never seem to keep up with the rising prices which are caused by the inflating supply of money. What's worse, is that those who DO get higher wages end up paying more in taxes because of the progressive tax rates. It's an even worse situation for seniors who live on fixed incomes whos COLAs never quite match the increase in price of the cat food they can no longer afford to eat.

In todays economy we have gone from manufacturing being the main source of corporate profits to being the least source. Most corporate profits in the US these days goes to the financial sector. "44% of all corporate profits in the U.S. come from the financial sector compared with only 10% from the manufacturing sector." (from "The Money Shuffler's Vig" (see Bridgewater Daily Observation of September 22, 2004))

It's what results from the fantastically large shift from a producing and creditor nation to a consuming debtor nation. Most of what borrow is owed to foreigners. Asset and housing price rises are due to the flood of easy credit and insanely low interest rates. Soon those bubbles will burst and the dollar will plummet. The result will be a huge increase in comoddity prices. We're already seeing energy prices go up and it's just the beginning.

People are buying houses like crazy and paying astronomical prices for them. Many are financed with interest only loans with adjustable rates. What will happen when interest rates rise? Those people will find that they can no longer make the payments and they will lose their homes. People who thought they were secure with a paid off mortgage and are now retired on fixed incomes are now seeing their houses re-assesed with huge increases in their property tax bills. Some are simply forced to sell and move into rental housing but what happens to them when interest rates rise and the prospective buyers cannot qualify for loans at the higher rates so they cannot sell? They lose their house!

I don't see any happy times to come. The next 10 years will be very bad for us.

Edwin

 

Edwin is smart, has some good data available, or both.
Well writen, easy to understand and sounds about right to me.
The question is how do we (if we can) prepare for this pending doom?
Not extend ourselves on anymore credit?
Save every possible penny we can?

 

I love it when "the sky falls" first thing in the morning!

 

sipping coffee, feet up...........hey what did you guys quit for?

 

Looks to me like HOHN got us started, then checked out for a bit, only to let us think about what he has stirred the pot with. Sounds like a pretty good idea to me.

Personally, at 19 years old, I don't understand the economy like I should, but through discussions like this and every day on the job, I am learning more and more. What I do know, is that even though I have a credit card, I use it only for its convenience. if I don't have the cash to write a check and pay for it, I don't buy it.

I do however intend to use credit at some point in my life...I'll be running a business where there aren't a lot of other options.
For this business it's all about cashflow, and that's what I'm learing how to do. I think what some (bigger) companies need to do is operate like us for a few years...they need to learn what losing money is all about, or at least be reminded of this.
You can't pass on a loss to your customers in this business, or you'll never recover. We can't try to make all our money on one deal, but we can spread it out to make a little on a lot of them, and be here next month to try again.

Like I said, at 19 there's not a whole lot I'm sure of, but the one thing I know is that when operating a service business like ours, youhave to take care of your customers, and more importantly your employees.
The US economy is a whole lot more complicated than anything I have every been involved in, and it can't be fixed overnight by a few guys dicussing it on an internet forum...but it does have to start somewhere.

Just my uninformed, and somewhat unrelated views on an improtant subject,
Chris

 

Back to basics. Get out of debt or don't get into debt. If your home is mortgaged make sure you won't be upside down if prices fall. Save as much money as you can but don't hold currency, buy gold and silver and hold the physical metal. Get out of stocks unless you really know what you're doing and you find real value. Most stocks are now way overpriced because they are looking for the "bigger fool" to buy them at an even HIGHER price. A stock with a P/E ratio of 20:1 will take 20 years to pay back your investment with dividends. Some stocks have P/E's as high as 150:1. A reasonably priced stock has a P/E of 8:1 or less.

Stocks are set to decline and real estate is also. Commodities are the new Bull market but most people don't know how to play them. Gold/Silver are the only truly safe methods to store wealth. In a few years, maybe real estate will be more reasonably valued so that's the time to buy.

For myself, I have some Gold/Silver stashed away but not nearly enough. I live in a small town in flyover country which is already so depressed I don't see it getting that much worse. The big cities will be worst hit so get out while the getting's good. If you have some land consider growing a garden or maybe livestock.

Oh, and one more thing. If you have Gold/Silver, DON'T keep it in a safe deposit box. When it hits the fan the government may confiscate metals again and if your bank fails you may not be able to get to your stash in an emergency.

I may be sounding alarmist and many think I've gone off the deep end but I'd much rather be wrong and sitting pretty than be dumb and pushing my possessions down the street in a shopping cart. Now where is that tinfoil?

Edwin

 

hilarious


the way i am starting to see life is survival of the fittest. when everything crashes, dyno juice is gone, and money has no more value, i will know how to start a fire without matches, kill and clean an animal for food with a rock, and be in good physical shape to perform these duties. many people would have absolutely no idea how to survive if everything was taken away from them, glad i am not one of them.

i want to go live in the woods and be a mountain man.

Pat

 

Only one question .... where were those Frito's, dip and Diet Pepsi bought?

Seriously though, the bubble will burst the question is when.

But Hohn's real observation was buy what you want where you want to, but don't complain about the consequences if you're putting the nails in your own coffin!

Ken

 

HOLY Edit .... i agree with Hoss on something

I buy what I want when I want. Whether it comes from Wal-Mart, Target, Sears, Home Depot, Lowe’s, Auto Zone, or wherever. If it happens to be from China, Taiwan, Indochina, or India so be it. We all do it. It is nearly impossible to buy only “American made”. In a perfect world that is what I would do. Hell my truck was made in Mexico. That sure didn’t stop me from buying it. I buy the best quality I can afford. And yes, as most of you know, I am a PROUD union member. I completely recommend buying American made. But the fact remains it is sometimes impossible to do just that.

While I understand some of you dislike unions, in certain circumstances they are a necessity. The IAFF (the union I belong to) protects us from unfair working conditions, makes sure that our family is taken care of in the event of our death, and secures our salary. The IAFF also lobbies for safe working conditions (as safe as we can get in our line of work). What I mean by this is making the fire ground as safe as possible. The IAFF has lobbied for a nation wide 2 in 2 out rule (which Dumb Edit Bush has Vetoed), which would make the fire ground safer. The 2 in 2 out rule basically says that for every firefighter inside a structure there will be as many firefighters outside the structure. They will be there to come and pull you out in case something goes wrong. I won’t lie, there have been a few times where I didn’t think I was coming home. It is nice knowing that there is someone out there looking out for me. A fellow brother has pulled me out of a situation that was very bad and I have done the same. But your president has said that it is not necessary. You would think that after 9/11 things would change just a little but I can assure you they have not. Bush showed up at the World Trade Center right after 9/11 and pledged his support for homeland security and fire and police and then Vetoed one of the most important pieces of legislation for the fire service. As far as I’m concerned he is a disgrace. (smiling waiting on Ramlovingvet)

Oh yeah… HOHN we can complain as much as we want about gas prices. I drive an 8500lb truck. SO WHAT!!!! You drive one that is about the same as mine. I bet you don’t like the fuel prices any more than I do. Mine gets 16 MPG in the city and that’s pretty good. But I can still complain about the price of diesel if I want to. Especially if I was paying $.40 per gallon less than regular unleaded just a little over a year ago. I mean Hell…. we invaded Iraq didn’t we? That should account for something.

Britt