Retail sales struggle despite our red hot economy

[OverVolt]

You're soooo lame. The velocity of money would be even less w/o QE.

!!!

 

[Spungo]

You need a history lesson, Spungo. Deflation kills investment & spending. Why risk when cash gains in value from the simple act of holding it? Why spend when your money will buy more the longer you keep it?

Why buy a cell phone now when the cell phones next year will be superior in every way but cost the same? This deflation must be killing the cell phone market.
Why buy a computer now?
Why buy a 2014 car when the 2015 will cost the same and have more features?
Do you really think people consider deflation before buying things? How many people lined up to buy a PS3 even though they knew the price would drop dramatically within a year? Movies in theatres are half price if you wait a month, yet people still line up to see a movie on opening night.

It also has a very negative effect wrt debt. As Irving Fisher noted in 1933, the more you pay, the more you owe in a strongly deflationary environment, like the early 1930's. That's true wrt value.

You are assuming people get wage increases during inflation. This is simply not true. Millions of Americans have not seen a pay increase in years even though food and energy prices are rising. You can go ahead and demand a raise, but there are a thousand people who will gladly do your job for less than you are being paid right now. Inflation doesn't make debt easier to pay. It makes debt harder to pay because your wage stays the same but all of your expenses go up. This site has a nice table of median incomes by year:
http://www.davemanuel.com/median-household-income.php
2008 = 53,644
2009 = 53,285
2010 = 51,892
2011 = 51,100
2012 = 51,017

Notice how the median income is steadily going down even though employment has been steadily improving? People are not getting pay increases. Inflation is not helping them pay down the debt. If anything, it's making their debt situation much worse.

Repub policy allowed the creation of too much debt, much of it unserviceable.

It's not really a democrat/republican issue. Republicans argued for de-regulation to allow banks to lend money to people who literally do not have a job, and then rate those bonds as safe as sovereign debt, and then sell them to unsuspecting Americans. Democrats did their part by encouraging subprime loans. The democrats thought they were "helping" the poor by getting them approved for loans they couldn't possibly pay back. The job of inflating asset bubbles then intentionally crashing the economy is the job of the fed. Bush and Obama nominated the same asshole - Ben Bernanke. People with very different political opinions have equally strong hatred of the fed. Paul Krugman (liberal) jokingly wrote that Greenspan should create a massive housing bubble to replace the dot com bubble he created. Investors, who are generally conservative, coined the term "Greenspan put" as a way of mocking Greenspan's desire to fuck with the market. (put options are like a kind of insurance you can buy to hedge against stock market declines)

 

[Lithium381]

Why buy a cell phone now when the cell phones next year will be superior in every way but cost the same? This deflation must be killing the cell phone market.
Why buy a computer now?
Why buy a 2014 car when the 2015 will cost the same and have more features?
Do you really think people consider deflation before buying things? How many people lined up to buy a PS3 even though they knew the price would drop dramatically within a year? Movies in theatres are half price if you wait a month, yet people still line up to see a movie on opening night.



You are assuming people get wage increases during inflation. This is simply not true. Millions of Americans have not seen a pay increase in years even though food and energy prices are rising. You can go ahead and demand a raise, but there are a thousand people who will gladly do your job for less than you are being paid right now. Inflation doesn't make debt easier to pay. It makes debt harder to pay because your wage stays the same but all of your expenses go up. This site has a nice table of median incomes by year:
http://www.davemanuel.com/median-household-income.php
2008 = 53,644
2009 = 53,285
2010 = 51,892
2011 = 51,100
2012 = 51,017

Notice how the median income is steadily going down even though employment has been steadily improving? People are not getting pay increases. Inflation is not helping them pay down the debt. If anything, it's making their debt situation much worse.




It's not really a democrat/republican issue. Republicans argued for de-regulation to allow banks to lend money to people who literally do not have a job, and then rate those bonds as safe as sovereign debt, and then sell them to unsuspecting Americans. Democrats did their part by encouraging subprime loans. The democrats thought they were "helping" the poor by getting them approved for loans they couldn't possibly pay back. The job of inflating asset bubbles then intentionally crashing the economy is the job of the fed. Bush and Obama nominated the same asshole - Ben Bernanke. People with very different political opinions have equally strong hatred of the fed. Paul Krugman (liberal) jokingly wrote that Greenspan should create a massive housing bubble to replace the dot com bubble he created. Investors, who are generally conservative, coined the term "Greenspan put" as a way of mocking Greenspan's desire to fuck with the market. (put options are like a kind of insurance you can buy to hedge against stock market declines)

Haha, to quote Denzel Washington " Welcome to EARF, JHNNNN !"