Visual Inflation

[WILLIAMS5232]

What kind of person pays for a car or holiday using a loan?

A car I can understand, but I don't think anyone pays for a holiday with a loan. That would be ridiculous.

Ever heard of a credit card?

Ever heard of America?

See, here in the United States, everyone deserves to have multiple automobiles, a large house, exotic vacations, and multiple big screen televisions. If they cannot pay for it with cash, they can pay for it with credit cards or mortgages. If they cannot pay the credit cards or mortgages, then they get bailed out. Because everyone should be equal. /rant.

*raises hand*
Isn't the bolded idea perpetuated by capitalism and the need to consume, though?

-rd

it's not the greedy capitalists fault that the idiot liberals enable the irresponsible people.

i know a guy who has defaulted 2 truck loans, a motorcycle loan and a PL.

this same guy lives in a 200,000 dollar house ( i'm aware that this is not a very expensive house, but i've seen houses on the market for 50k so yes, it is an expensive house ) his wife drives a new mercedes, he just bought about 20,000 dollars worth of furniture for said house ( on credit i'm sure ) he put an 8,000 dollar lift kit with rims and tires on a truck that he still owes 10,000 on, and him and his whole family wear all name brand clothing, and go out to eat several nights a week.

i'm sure his kids will apply for a student loan that they'll never pay off too.

this guy needs to be in jail.
drinking water, and eating rice and cheap fish 7 days a week
with nothing but a box fan and a sink and toilet.

i wonder how many more are like this.

[rdsrds2120]

What kind of person pays for a car or holiday using a loan?

A car I can understand, but I don't think anyone pays for a holiday with a loan. That would be ridiculous.

Ever heard of a credit card?

Ever heard of America?

See, here in the United States, everyone deserves to have multiple automobiles, a large house, exotic vacations, and multiple big screen televisions. If they cannot pay for it with cash, they can pay for it with credit cards or mortgages. If they cannot pay the credit cards or mortgages, then they get bailed out. Because everyone should be equal. /rant.

*raises hand*
Isn't the bolded idea perpetuated by capitalism and the need to consume, though?

-rd

it's not the greedy capitalists fault that the idiot liberals enable the irresponsible people.

i know a guy who has defaulted 2 truck loans, a motorcycle loan and a PL.

this same guy lives in a 200,000 dollar house ( i'm aware that this is not a very expensive house, but i've seen houses on the market for 50k so yes, it is an expensive house ) his wife drives a new mercedes, he just bought about 20,000 dollars worth of furniture for said house ( on credit i'm sure ) he put an 8,000 dollar lift kit with rims and tires on a truck that he still owes 10,000 on, and him and his whole family wear all name brand clothing, and go out to eat several nights a week.

i'm sure his kids will apply for a student loan that they'll never pay off too.

this guy needs to be in jail.
drinking water, and eating rice and cheap fish 7 days a week
with nothing but a box fan and a sink and toilet.

i wonder how many more are like this.

Didn't really need the rhetoric, but ok.

-rd

[WILLIAMS5232]

Didn't really need the rhetoric, but ok.

-rd

sorry, just trying to point out the whole system is out of whack.

and really other than just feeling good about themselves, the responsible people who take care of themselves, pay their debts, take responsibility for their own actions..etc.... get nothing.

not that i think they want anything, just they are tired of contributing to those that lean on others to get them out of a bind that they irresponsibly put themselves in.

and the govt supports these people because they vote, really, that shouldn't matter. if the govt would quit giving in to these people then they may not care to vote.

[Lootifer]

Didn't really need the rhetoric, but ok.

-rd

sorry, just trying to point out the whole system is out of whack.

and really other than just feeling good about themselves, the responsible people who take care of themselves, pay their debts, take responsibility for their own actions..etc.... get nothing.

not that i think they want anything, just they are tired of contributing to those that lean on others to get them out of a bind that they irresponsibly put themselves in.

and the govt supports these people because they vote, really, that shouldn't matter. if the govt would quit giving in to these people then they may not care to vote.

Yeh but dont think for a minute that the whole system is out of whack exclusively because theres some dumb people living beyond their means.

Sure theyre to blame; but so is the institution who blasted via every available outlet the message to these idiots that they NEED to consume to be a better human being, so are the institutions who gave the idiots credit in the first place at stupidly high interest rates (essentially exploiting the consumers ignorance and greed), and so is every ticket clipping middle man whos doing everything they can to ensure that the stupid man remains stupid and continues to mindlessly consume.

If you're gunna f*ck the idiot in the ass, I just ask that you f*ck the rest of the wankers who helped him get to where he is.

[huamulan]

'Wait, who exactly is lending out the money? Who authorizes these bailouts?

By EU, do you mean by unanimous decision from each EU member? If so, whose money is being lent out? Each government must take some of its reserves and lend them to Spain at some proportional amount?

I'm not talking about the politics of providing the bailout. Just saying that the bailout isn't money 'creation' - it's money pooled by EU member states (and maybe other nations in the case of the IMF, but I don't know).

they are tired of contributing to those that lean on others to get them out of a bind that they irresponsibly put themselves in.

Such as the banks and mortgage lenders who profited so greatly from the loosening of rules to such an extent that the 2008 crash was possible? Who took on toxic assets (such as Greek bonds or all the ridiculous mortgage in the USA) knowing that their government would jump in to save them.

Banks which still haven't cleaned up their act in the 4 years since the crash, seeing as the Spanish banking industry has just had to be bailed out.

[Frigidus]

'Wait, who exactly is lending out the money? Who authorizes these bailouts?

By EU, do you mean by unanimous decision from each EU member? If so, whose money is being lent out? Each government must take some of its reserves and lend them to Spain at some proportional amount?

I'm not talking about the politics of providing the bailout. Just saying that the bailout isn't money 'creation' - it's money pooled by EU member states (and maybe other nations in the case of the IMF, but I don't know).

they are tired of contributing to those that lean on others to get them out of a bind that they irresponsibly put themselves in.

Such as the banks and mortgage lenders who profited so greatly from the loosening of rules to such an extent that the 2008 crash was possible? Who took on toxic assets (such as Greek bonds or all the ridiculous mortgage in the USA) knowing that their government would jump in to save them.

Banks which still haven't cleaned up their act in the 4 years since the crash, seeing as the Spanish banking industry has just had to be bailed out.

Blame the guys that are ACTUALLY getting all of the money we're currently printing? What are you, stupid? This is clearly the fault of some poor fucker with a maxed out credit card.

[huamulan]

The US Government has been buying toxic assets back from irresponsible banks because of someone with a maxed out credit card?

[Frigidus]

The US Government has been buying toxic assets back from irresponsible banks because of someone with a maxed out credit card?

I was being sarcastic.

[BigBallinStalin]

What kind of person pays for a car or holiday using a loan?

A car I can understand, but I don't think anyone pays for a holiday with a loan. That would be ridiculous.

Ever heard of a credit card?

Ever heard of America?

See, here in the United States, everyone deserves to have multiple automobiles, a large house, exotic vacations, and multiple big screen televisions. If they cannot pay for it with cash, they can pay for it with credit cards or mortgages. If they cannot pay the credit cards or mortgages, then they get bailed out. Because everyone should be equal. /rant.

*raises hand*
Isn't the bolded idea perpetuated by capitalism and the need to consume, though?

-rd

The need to consume has always been around, even before "capitalism," however that's defined.

Here's a short answer:

Why aren't people saving more? Because it simply isn't worth it.
So, why are people spending more? Because the government incentivizes them to do so.


People consume too much and save too little because of how the Federal Reserve has been managing the economy. In order to "save capitalism from itself," the Federal Reserve tends to drop interest rates, so that spending is marginally increased. Of course, with decreased interest rates, it follows that there's a weaker incentive to save one's money.

For example, investing in a 10-year US bond only offers a measly 2% in nominal interest! Hopefully, inflation is less than 2%, so you aren't incurring a loss by "saving" your money. (If inflation was 3%, that would 2% - 3% = -1% real interest rate).

If you just let your money sit in the bank (available to be taken out whenever), then you'll earn about 0.0001% (or so) interest. If inflation is over that interest rate (which it is), then your actually losing money as it sits in the bank. Most people figure that they may as well spend it.


(there's also the issue of setting interest rates low, so that expenditures in long-term projects increases (e.g. buying an automobile factory). This is what the big guys with the big big money do. This money goes to wages and income which is mostly spend on goods produced in the short-term. In turn, you get too much money chasing too few goods (i.e. inflation, prices in general rise).


Capitalism is just an easy scapegoat. We have to also understand how the government manipulates capitalism in order to understand today's outcomes.


*

Spoiler

For Symmetry's sake, "government" in this post relates to the US federal government. This should be understood because the post discusses the activities of the Federal Reserve, which is intertwined with essentially the US federal government, and not the State, county, and municipal governments. Again, apologies for this additional clutter.

[WILLIAMS5232]

there are people that will take advantage of a system because they know they can, and that's why they do it. plus they get a bunch of free stuff with it.

and a company will not take the loss, they'll just raise the cost of their product to those that do pay. this i guess drives inflation?

and basically if everyone paid their debts ( including our govt ) then there would be no problem right? or how about you don't get in debt to start with. just earn what you get along the way. what a crazy idea.

when you try to say that its the banks fault because they made it accessible for folks to get in debt, that may be true, but it bugs me. especially when you keep enabling these people to do it over and over again. when will people stop caring for their irresponsible neighbor? if jim bob can live down on the swamp in a fema trailer why cant billy's dad the t-ball coach do it too?
i guess he's just too good and deserves his 500,000 dollar house on his 50,000 dollar a year salary. hell it ain't his fault the bank loaned it to him. they should have realized he was just a piece of garbage.

do i think that our govt is mismanaged? yes. what are you gonna do? vote Obama??? or Romney???? thats' our only choices??

i'd prefer to just sit here and bitch about it with you bunch of clowns here on cc

[BigBallinStalin]

Where's the part about us throwing the printed money into the black hole that is the banking industry? Oh wait, that doesn't fit into your narrative of the economy being a pile of shit because of poor people being greedy, never mind.

If anything, we should be thanking many of the large banks for holding all those excess reserves. IIRC, they're sitting on about $3 to $5 trillion in excess reserves. If they lent out this money to whoever, i.e. if it no longer remained a "black hole," then we'd get hyperinflation--depending on how quickly the money is lent out.

In that scenario, we'd suffer tremendously. You can give a sarcastic Thank You to the Federal Reserve for buying back the treasury securities from these banks and leaving them with the "hot potato."

EDIT: sarcasm duly noted.

[Phatscotty]

Uncle Sam has a maxed out credit card. That's what this is all about...

[Lootifer]

ITS NOT 2% - 3% DURRR

ITS 102%/103% WHICH IS AN EFFECTIVE INTEREST RATE of -0.97% NOT -1.0%!!!

HAHAHAHAHAHAHAHA

/gloat

[huamulan]

Frigidus: well okay then

there are people that will take advantage of a system because they know they can, and that's why they do it. plus they get a bunch of free stuff with it.

I don't understand why you apply this to the foolish borrower but not the reckless lender. Are you taking the 'if we didn't sell them the guns then someone else would, so it's not our fault they're shooting each other' approach?

[BigBallinStalin]

ITS NOT 2% - 3% DURRR

ITS 102%/103% WHICH IS AN EFFECTIVE INTEREST RATE of -0.97% NOT -1.0%!!!

HAHAHAHAHAHAHAHA

/gloat

AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[thegreekdog]

What kind of person pays for a car or holiday using a loan?

A car I can understand, but I don't think anyone pays for a holiday with a loan. That would be ridiculous.

Ever heard of a credit card?

Ever heard of America?

See, here in the United States, everyone deserves to have multiple automobiles, a large house, exotic vacations, and multiple big screen televisions. If they cannot pay for it with cash, they can pay for it with credit cards or mortgages. If they cannot pay the credit cards or mortgages, then they get bailed out. Because everyone should be equal. /rant.

*raises hand*
Isn't the bolded idea perpetuated by capitalism and the need to consume, though?

-rd

Perpetuated by capitalism? I don't think one of capitalism's tenets is that people deserve whatever they want.

[rdsrds2120]

Maybe not, but it does introduce the ideas of make money, spend, and buy things because that's good for a Capital system to keep going, or maybe it doesn't.

I need to lrn2 economics more. Interesting stuff, but I don't know much about it.

[thegreekdog]

'Wait, who exactly is lending out the money? Who authorizes these bailouts?

By EU, do you mean by unanimous decision from each EU member? If so, whose money is being lent out? Each government must take some of its reserves and lend them to Spain at some proportional amount?

I'm not talking about the politics of providing the bailout. Just saying that the bailout isn't money 'creation' - it's money pooled by EU member states (and maybe other nations in the case of the IMF, but I don't know).

they are tired of contributing to those that lean on others to get them out of a bind that they irresponsibly put themselves in.

Such as the banks and mortgage lenders who profited so greatly from the loosening of rules to such an extent that the 2008 crash was possible? Who took on toxic assets (such as Greek bonds or all the ridiculous mortgage in the USA) knowing that their government would jump in to save them.

Banks which still haven't cleaned up their act in the 4 years since the crash, seeing as the Spanish banking industry has just had to be bailed out.

Blame the guys that are ACTUALLY getting all of the money we're currently printing? What are you, stupid? This is clearly the fault of some poor fucker with a maxed out credit card.

Poor fucker: I want that credit card even though I can't afford it.
The Bank of Frigidus: No credit card for you poor fucker.
The Bank of TGD: We'll give it to you because we'll get bailed out by the government after we give all the politicians lots of money.
Government: Here you go Bank of TGD
The Bank of TGD:
The Bank of Frigidus:

BLAME THE BANKS EVEN THOUGH THERE ARE TWO OTHER PARTIES INVOLVED IN THIS TRANSACTION!

[thegreekdog]

Maybe not, but it does introduce the ideas of make money, spend, and buy things because that's good for a Capital system to keep going, or maybe it doesn't.

I need to lrn2 economics more. Interesting stuff, but I don't know much about it.

Practically speaking, I don't think people max out their credit cards or buy a house above their limit because it's "good for a capital system to keep going." I suspect they do that because they want shit.

[Army of GOD]

Maybe not, but it does introduce the ideas of make money, spend, and buy things because that's good for a Capital system to keep going, or maybe it doesn't.

I need to lrn2 economics more. Interesting stuff, but I don't know much about it.

Practically speaking, I don't think people max out their credit cards or buy a house above their limit because it's "good for a capital system to keep going." I suspect they do that because they want shit.

regardless of their intention, I think he's trying to say that it's supposedly healthy for capitalism that they are buying?

dude I don't know I'm so high right now

[WILLIAMS5232]

Frigidus: well okay then

there are people that will take advantage of a system because they know they can, and that's why they do it. plus they get a bunch of free stuff with it.

I don't understand why you apply this to the foolish borrower but not the reckless lender. Are you taking the 'if we didn't sell them the guns then someone else would, so it's not our fault they're shooting each other' approach?

nope, that's not what i'm saying. when you have a high population like so, you'll never be able to sort out the duds from the studs no matter what regulations or limitations you put on something,

so in a way i do realize that the lenders are part of the problem, but i just put more blame on the borrower because they are borrowing. kind of reminds me of begging or asking for help. the problem is they don't need to do it. they want this lavish lifestyle that makes them feel like they are successful or something. hell, i don't know what they think. but they think they need it so they flaunt all this stuff that they don't own like they earned it. and then they get it and they don't want it anymore ( because they didn't earn it probably ). so they get more things that they think they want. it's just a cycle, i see it daily, and it's this type of thinking and lifestyle that has put the country in a bad spot. and i don't see it slowing down because they're still just handing out free money for people to buy i-pads and flat screens when they are already in over their heads. and it's causing people that are responsible to cover the costs.

so do i feel sorry for a person that gets in over their head? nope, sure don't. hell i got family that i would agree needs to be put in jail because of this.

it's hard for me not to believe that the borrower has to be held accountable for a defaulted loan. it's the same as stealing, and if you disagree then we'll get no farther on the issue.

[thegreekdog]

Maybe not, but it does introduce the ideas of make money, spend, and buy things because that's good for a Capital system to keep going, or maybe it doesn't.

I need to lrn2 economics more. Interesting stuff, but I don't know much about it.

Practically speaking, I don't think people max out their credit cards or buy a house above their limit because it's "good for a capital system to keep going." I suspect they do that because they want shit.

regardless of their intention, I think he's trying to say that it's supposedly healthy for capitalism that they are buying?

dude I don't know I'm so high right now

It is healthy for capitalism that they are buying (in the short run). In the long run we get what happened in 2008. I'm not saying that lenders aren't blameless. What I'm saying is that people should have the basic knowledge and understanding not to spend above their means. For us to blame lenders for people spending above their means is, frankly, ridiculous.

[BigBallinStalin]

Maybe not, but it does introduce the ideas of make money, spend, and buy things because that's good for a Capital system to keep going, or maybe it doesn't.

I need to lrn2 economics more. Interesting stuff, but I don't know much about it.

Practically speaking, I don't think people max out their credit cards or buy a house above their limit because it's "good for a capital system to keep going." I suspect they do that because they want shit.

regardless of their intention, I think he's trying to say that it's supposedly healthy for capitalism that they are buying?

dude I don't know I'm so high right now

It's not healthy "for capitalism" in the long-run, dude that doesn't know is so high right now.

It's enabled within our current version of capitalism, which is perpetuated by the political system. TGD provided a concise example with his banks.


partially ninja'd by TGD, but I narrowly escaped 3/5 of his shurikens.

[Juan_Bottom]

[Frigidus]

Maybe not, but it does introduce the ideas of make money, spend, and buy things because that's good for a Capital system to keep going, or maybe it doesn't.

I need to lrn2 economics more. Interesting stuff, but I don't know much about it.

Practically speaking, I don't think people max out their credit cards or buy a house above their limit because it's "good for a capital system to keep going." I suspect they do that because they want shit.

regardless of their intention, I think he's trying to say that it's supposedly healthy for capitalism that they are buying?

dude I don't know I'm so high right now

It is healthy for capitalism that they are buying (in the short run). In the long run we get what happened in 2008. I'm not saying that lenders aren't blameless. What I'm saying is that people should have the basic knowledge and understanding not to spend above their means. For us to blame lenders for people spending above their means is, frankly, ridiculous.

If they had done their jobs and turned down people who clearly had no means of paying back the loans they were giving out, then the problem would not have occurred. You know what, that's unfair. They did do their jobs. They knew what they were doing. The lenders went out of their way to lend to virtually every sucker that came asking for money, and they then turned around and sold the risk to other suckers (pension funds being one of the biggest suckers). Both sides were assured that they were making wise investment decisions.

What we have here is the choice between blaming the con artist or the people that got conned. I know which choice I'd consider ridiculous.