Great Depression of 2016

[rufus]

More news: http://www.businessinsider.com/caterpillar-restructuring-and-job-cuts-2015-9

It looks like we will all be on food stamps soon. People on stamps are not really concerned with inflation. My wife worked at Wally World for about five years. She said she found it disturbing that people would complain about the price of their diabetes medicine, but would still buy a hundred dollars worth of candy.

This will not end well.

 

[hemet dennis]

More news: http://www.businessinsider.com/caterpillar-restructuring-and-job-cuts-2015-9

It looks like we will all be on food stamps soon. People on stamps are not really concerned with inflation. My wife worked at Wally World for about five years. She said she found it disturbing that people would complain about the price of their diabetes medicine, but would still buy a hundred dollars worth of candy.

This will not end well.

Well holding up infrastructure projects and the much lower oil prices are not free. Cat's sales are down in other countries, they are up in the U.S. so is the glass half full or half empty. You usually have the thinking that the glass is all the way empty and broken on the floor.

Now as the story said
"Caterpillar is seen as a bellwether for the global economy because its equipment is big, expensive, and often the kind of investment a company makes only when it feels confident about its prospects and the global economy."

So there isn't high confidence in the world economy, but business does have confidence in the U.S. economy.
Have you ever heard the saying "when the U.S. sneezes the world catches a cold" ? Well when the world catches a cold the U.S. only sneezes. The world has a bit of a cold right now

Don't know why you would bring up inflation with this story, but inflation is very low at this time. Still waiting on that hyperinflation.

 

[Oliver Douglas]

"Don't know why you would bring up inflation with this story, but inflation is very low at this time. Still waiting on that hyperinflation"

Guess you haven't bought groceries in a while. They have gone through the roof...don't eat rib eyes much any more. Sure, electronics have gone down in price....made in China for slave wages...but you don't buy a new television every week, like food...but houses, cars? With very low interest rates for mortgages, house prices have gone up significantly...you can get a mortgage at 3.85%...but at least in the Bay Area of Silicon Valley, it's just led to much higher home prices...."Gee, I can afford an $800K house now!"....which sold eight years earlier for $400k.....when rates were much higher. Add on to that the increase in property taxes...twice as much for the same house of eight years ago. Someone is making money, and it sure ain't me.

 

[hemet dennis]

"Don't know why you would bring up inflation with this story, but inflation is very low at this time. Still waiting on that hyperinflation"

Guess you haven't bought groceries in a while. They have gone through the roof...don't eat rib eyes much any more. Sure, electronics have gone down in price....made in China for slave wages...but you don't buy a new television every week, like food...but houses, cars? With very low interest rates for mortgages, house prices have gone up significantly...you can get a mortgage at 3.85%...but at least in the Bay Area of Silicon Valley, it's just led to much higher home prices...."Gee, I can afford an $800K house now!"....which sold eight years earlier for $400k.....when rates were much higher. Add on to that the increase in property taxes...twice as much for the same house of eight years ago. Someone is making money, and it sure ain't me.

The current inflation rate is very low.

http://www.multpl.com/inflation/table

 

[rufus]

Well, here is more on that negative interest rate. http://www.telegraph.co.uk/finance/...eriment-has-turned-economics-on-its-head.html

Sweden didn't get hooked in on the euro. They kept the Krona. I bet there are a lot of well stuffed mattresses in Sweden now days.

The idea of getting rid of cash boggles the mind. Drug dealers would have to resort to some sort of barter system. I think I would put my savings into something real, like food stuffs. Want crack? Got any peanut butter? How about some Oreos?

Sweden at one time based their currency on copper. The problem was that the price of copper fell, and one would get a hernia toting all of that metal around.

The fellow that came up with the copper scheme had his head removed.

Paper currency is no better than the government that issued it. In Viet Nam, I knew people that had trunks full of that Military Payment Certificates. So, one day in 1975, it all became worthless.

 

[Oliver Douglas]

So did the German Mark after The Great War of 1914...WW I. After the treaty was signed. their paper currency was essentially worthless. The German people who had gold and silver coins in their possession were able to purchase goods without the tacked on inflation of their now worthless Marks. The resulting economic upheaval led eventually to the election of a leader who promised the German people a strong economy and military...we all know how well that one turned out. Zimbabwe, formerly Rhodesia, has issued TRILLION DOLLAR banknotes....Fiat currency is only as valuable as the government issuing it says it is....in 1929, a U.S. $20 gold double eagle would buy a custom tailored suit...in 2015, it still will. 90% Silver was taken out of most U.S. coins beginning in 1965...replaced with clad coins...pennies are now essentially zinc with a copper plating...melt value is zero! I remember as a kid in 1964/1965 time period when Sherry Lewis, who had a children's program on television, and Lamb Chop, her little puppet, told kids to turn in their silver dimes, quarters and half dollars, due to a "coin shortage"...we were lied to...us kids!

Gas prices have dropped, but any realized savings are being used to pay down personal debt...too many folks using credit cards to purchase what they want, not what they need. Cards that can add 20% interest rates to the bottom line. My step-father passed away two years ago with over $67K in credit card debt....debt like that is recouped by the credit card companies using their ridiculous rates! Usury by individuals is illegal...not so banks and credit unions.

 

[rufus]

Worse, those Military Payment Certificates were issued by the US government.

 

[rufus]

Quote:
Gas prices are low because the Saudis are dumping the product. They want to price shale out of the market. It seems as if they are succeeding. Also, they have created a welfare society that is dependent upon their oil revenue. Their people all have jobs that are just sinecures. It is a do nothing society. To change a tire, they need a couple of Pinoys to do the work. If they cannot afford to keep their people in the style that they want, well then there is ISIS. The more they sell, the lower the price goes, and the more they need to sell just to keep the house of Saud in power.

 

[Oliver Douglas]

Agree with your analysis regarding oil price manipulation. If the reduced price of crude remains now, and makes U.S. production of oil non-cost effective, and some of those resources are shut down, re-start time would enable those still producing (the mid-east comes to mind) to gouge the public at large. I remember the 1973 oil embargo quite well. Another wrinkle to the formula is fracking, which has also hurt crude prices, as natural gas has become inexpensive and many energy producing facilities are exploiting that resource.

 

[rufus]

The low price of petroleum products is a temporary thing. As soon as the first Iranian bomb goes off, the price will sky rocket. This deal with Iran guarantees that there will be a war. I sure hope it doesn't involve us, but I am afraid it will.

The Iranians will not test a bomb. That technology has already been perfected by the Soviets, the North Koreans and the Pakistanis. It will be a surprise attack. Just hope and pray.