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Oh dear my fellow bears, I truly am thinking we're screwed Brothers :); The baskets are even getting their plan in place to do "QE for The People" 'next time 'round'
Topic Started: 18 Sep 2015, 08:47 AM (7,772 Views)
Andrew Judd
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peter fraser
18 Sep 2015, 06:01 PM
Andrew I'm not trying to represent savers as the enemy, I'm saying that the RBA wants people to spend and not save, and they do that be targeting modest inflation.
Yeah but that sounds like ordinary times rather than the times we live in today where this thread is about a move to the left and QE for the people?
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The Whole Truth
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peter fraser
18 Sep 2015, 05:32 PM


Your savings will probably become spending at some point, but if they sit in an account for years then that money isn't helping the economy.
Well according to the play book all savings is lent out as soon as it is at the bank, our savings as well as the offshore savings that we borrow for a lot of our funding needs. Are you saying this isn't the case? That what the conspiracy theorists say about money being created out of thin air is true?
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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Terry
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peter fraser
18 Sep 2015, 05:32 PM
Savings are not lost when they are spent - they just change hands.

That's not the point. If private debt is greater than GDP, does that not suggest we spend more than we earn? I know that this metric is relatively meaningless within the current economic paradigm.
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peter fraser
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Terry
18 Sep 2015, 06:25 PM
That's not the point. If private debt is greater than GDP, does that not suggest we spend more than we earn? I know that this metric is relatively meaningless within the current economic paradigm.
I don't see the significance of that. Are you saying that your total debt can't exceed more than one years earnings, and then you wish to impose that limitation on the nation.

Wouldn't a comparison of debt servicing cost and income be a more relevant measure.?
Edited by peter fraser, 18 Sep 2015, 06:32 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Andrew Judd
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peter fraser
18 Sep 2015, 06:32 PM
I don't see the significance of that. Are you saying that your total debt can't exceed more than one years earnings, and then you wish to impose that limitation on the nation.

Wouldn't a comparison of debt servicing cost and income be a more relevant measure.?
Thats the spirit Peter! Please borrow more money! You know you can afford it.

Come on be fair about it. Do your bit to save me.
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peter fraser
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The Whole Truth
18 Sep 2015, 06:19 PM
Well according to the play book all savings is lent out as soon as it is at the bank, our savings as well as the offshore savings that we borrow for a lot of our funding needs. Are you saying this isn't the case? That what the conspiracy theorists say about money being created out of thin air is true?
The savings are in your bank account are there because a bank has lent them out, that money didn't magically appear, it's a function of double entry bookkeeping.

It may be created during a loan funding transaction, but it's not "free" money for the bank. The bank will pay interest on it, and they lose it as an asset as the loan is repaid.
Andrew Judd
18 Sep 2015, 06:35 PM
Thats the spirit Peter! Please borrow more money! You know you can afford it.

Come on be fair about it. Do your bit to save me.
Save you from what Andrew. I didn't realise that you were in danger.
Edited by peter fraser, 18 Sep 2015, 06:39 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Andrew Judd
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peter fraser
18 Sep 2015, 06:38 PM
The savings are in your bank account are there because a bank has lent them out, that money didn't magically appear, it's a function of double entry bookkeeping.

It may be created during a loan funding transaction, but it's not "free" money for the bank. The bank will pay interest on it, and they lose it as an asset as the loan is repaid.

Save you from what Andrew. I didn't realise that you were in danger.
I need the interest from my savings to live through my retirement, plus I need a rising house price to justify having so much of my capital in a house that is too big for me and needs a small fortune in annual repairs.

If you can get inflation to rise by borrowing more I think it will help me.
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Terry
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peter fraser
18 Sep 2015, 06:32 PM
I don't see the significance of that. Are you saying that your total debt can't exceed more than one years earnings, and then you wish to impose that limitation on the nation.

Wouldn't a comparison of debt servicing cost and income be a more relevant measure.?
The significance is that individuals, households, and businesses are constrained by perpetual debt. Yes, we know that nation states are not (kind of). The idea that just being able to service debt is a more appropriate metric is indeed where we're at, but society's values are still driven to some extent by the virtue of saving, particularly of that "saving" represents feeding the finance and property industries.
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Loki
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peter fraser
18 Sep 2015, 03:13 PM
It's simply not true that we don't produce anything, that's just you losing control, of reality.
Hmmm ... you might want to work on your reading comprehension. I didn't say we don't produce anything. I said something must be produced before it can be consumed. Are you struggling with that concept?
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Ones persons spending is another persons income. Not all income is savings, as you really should know. Everyone must spend some of their income at least to exist.
When money is spent, it becomes someone else's savings. The amount of savings doesn't change by people spending money. Savers are simply the producers. And when they spend their savings, they do so with other producers. If you have more spending than production, then you have a debt problem or a trade problem.
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Not really, I can produce goods and services with just my labour. Can't you?
Really? You can do this in the bush without clothes, shoes, phone, pens, paper or premises?
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If the cost of goods and services goes down to you then it improves your standard of living, but not the standard of living for the people who manufacture (or work for the manufacturers) or produce the goods and services that you consume.
Wrong. The cost to me goes down because the cost to produce the goods and services also goes down. Margins and profitability are unaffected by this change. It's called "productivity improvement". When the cost rises and you pay more for less, productivity has declined.
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You have a very one sided view of almost everything that happens to suit your bias.
:bl: The pot has been suitably chastised by the kettle.

Terry
18 Sep 2015, 03:02 PM
Well when you have a paradigm that gears houses are speculative or investment instruments, that's inevitable. And if you remove that paradigm, it's not hard to imagine the whole economy falling into complete disarray. That's why there is such a strong emphasis on rising house prices being essential for consumption. Nobody has a clue the economy could exist without this relationship.
You need to inflate houses to offset the deflationary effect of productivity improvements. The rich rely on inflation to become richer. As soon as the rich discover a reliable way to become richer from deflation, that will be the end of this type of inflation.
Edited by Loki, 18 Sep 2015, 07:19 PM.


“Talk sense to a fool and he calls you foolish.” - Euripides
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Ex BP Golly
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peter fraser
18 Sep 2015, 02:37 PM
Why?
Lol
China to achieve minimum wage growth target
(Xinhua)
Updated: 2015-05-28 21:42:40

"BEIJING -- China is expected to achieve its average annual minimum wage growth target of 13 percent for the five-year period ending in 2015, experts said on Thursday.
Nineteen regions in Chinese mainland increased their minimum wage at an average rate of 14.1 percent in 2014, the Ministry of Human Resources and Social Security said on Thursday.
The growth pace is faster than the planned annual average growth rate, but slower than the previous three years, said the ministry in a statement posted on its official website.
In China, where city and provincial governments set minimum wage standards, 27 regions raised the minimum wage by an average rate of 17 percent in 2013, while minimum wage hikes in 25 regions surpassed 20 percent on average in 2011 and 2012...."

http://m.chinadaily.com.cn/en/2015-05/28/content_20848647.htm
Edited by Ex BP Golly, 18 Sep 2015, 07:41 PM.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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