|
|
03-03-2009, 06:20 AM
|
#1
|
Recycles dryer sheets
Join Date: Jan 2007
Posts: 280
|
Is this deflation?
Remind me why I don't like deflation.
My portfolio- read nest egg- is down well into double digits. But it isn't about the number of dollars, it's the buying power of those dollars.
Housing prices are down.
Fuel prices are down.
Cash is king- and as an ER, I live on a near cash.
Most businesses need the cash- and are willing to offer bargains.
The sleazeballs on Wall Street are on the run.
Rampant consumerism is being choked and shaken.
I must be missing something.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
03-03-2009, 06:40 AM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
|
Deflation is wonderful if you are living on a secure income source such as a pension and SS. Otherwise, it stinks.
__________________
Numbers is hard
|
|
|
03-03-2009, 06:58 AM
|
#3
|
Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
|
Quote:
Originally Posted by winger
Remind me why I don't like deflation.
|
OK.
Quote:
Originally Posted by winger
Housing prices are down.
|
That's no help unless you are planning to sell and buy a bigger, more expensive house. When you sell, you'll get less for your house.
Quote:
Originally Posted by winger
Fuel prices are down.
|
Compared to what? They aren't as low now as they were last fall.
Quote:
Originally Posted by winger
Cash is king- and as an ER, I live on a near cash.
Most businesses need the cash- and are willing to offer bargains.
|
We've had threads on this and it seems like a lot of the "sales" are just the same prices businesses have been offering all along. At least, in my case I haven't found much of anything to be cheaper.
Quote:
Originally Posted by winger
The sleazeballs on Wall Street are on the run.
Rampant consumerism is being choked and shaken.
|
OK, I'll give you these.
Quote:
Originally Posted by winger
I must be missing something.
|
Have your utility expenditures gone down, or up? How about the cost of food or a used car?
Besides, I don't think we are in a decidedly deflationary period. (caveat: I know NOTHING about economics, trust me.) Anyhow, my uninformed opinion is that this is just a bobble before we start on a huge, inevitable inflationary spiral worse than what we saw in the 1980's.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
|
|
|
03-03-2009, 07:03 AM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 9,071
|
Fuel prices are down and that has helped a lot in filling up my car. But I haven't noticed any decline in my utility cost, cable, phone, insurance, property taxes, sales taxes, country club dues, and food cost. Everything I see at the grocery store is roughly the same if not higher. Let me know when deflation kicks in on these items.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
|
|
|
03-03-2009, 07:05 AM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Quote:
Originally Posted by REWahoo
Deflation is wonderful if you are living on a secure income source such as a pension and SS. Otherwise, it stinks.
|
Not so wonderful if you're like my mom and spending all your time worrying about the economic future of your children and grandchildren.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
03-03-2009, 08:06 AM
|
#6
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,258
|
An animated look at consumerism in these tough economic times.
12/17/2008
NPR's esteemed science correspondent Robert Krulwich explains everything about everything
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
|
|
|
03-03-2009, 08:56 AM
|
#7
|
Recycles dryer sheets
Join Date: Jan 2007
Posts: 280
|
[quote=Want2retire;790796]OK.
That's no help unless you are planning to sell and buy a bigger, more expensive house. When you sell, you'll get less for your house.
Since housing values (mostly) go up, isn't it a speculative purchase? There's a chance it may go down. I'm trying to think what else I could buy that always up in value........Wait. I live in Texas. Never mind.
Compared to what? They aren't as low now as they were last fall.
I guess the belief is that the price drop is temporary. No one wants to lower prices, do they?
We've had threads on this and it seems like a lot of the "sales" are just the same prices businesses have been offering all along. At least, in my case I haven't found much of anything to be cheaper.
I have bought a few of the cheaper things recently. LCD TV. An awesome deal on a cruise. We ate out a lot in February, and prices at my type of places continued to be reasonable.
Have your utility expenditures gone down, or up? How about the cost of food or a used car?
I don't think EVERYTHING goes down in a deflationary period, anymore than I think EVERYTHING goes up with inflation. BTW, my electric bill was $30 and some change for February.
I'm not an advocate of deflation, anymore than I love inflation. I'm certain extreme deflation would be.....as bad as extreme inflation.
I'm looking for the bright spots.
|
|
|
03-03-2009, 09:01 AM
|
#8
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
|
Square footage aside, there are definite advantages to the full-time RV lifestyle...
__________________
Numbers is hard
|
|
|
03-03-2009, 09:27 AM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
|
Quote:
Originally Posted by RonBoyd
An animated look at consumerism in these tough economic times.
12/17/2008
NPR's esteemed science correspondent Robert Krulwich explains everything about everything
|
Unfortunately, that overly simplistic explanation is wrong.
(You could have substituted Globalization for deflation in the story and got and came to the same conclusion - Two stores - one sells US made product and one from China - US made more expensive, people buy Chinese made - US worker loses their job.)
Another way of looking at why it is wrong is inflation. If, people knew prices were going up they would buy now, prices go up and jobs are created - wrong again.
If it were true, all those African countries with high inflation rates would be great places to live.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
|
|
|
03-03-2009, 06:10 PM
|
#10
|
Recycles dryer sheets
Join Date: Jan 2007
Posts: 280
|
Quote:
Originally Posted by REWahoo
Square footage aside, there are definite advantages to the full-time RV lifestyle...
|
You caught me.
|
|
|
03-03-2009, 07:00 PM
|
#11
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
|
The problem with deflation is that we don't have the tools to control it. We think we've figured out enough about monetary policy to keep inflation in check, so a modest amount of inflation is preferred. If it gets too high, the Fed has a bunch of tools to stomp it back down (political will permitting).
A modest amount of deflation, in it self, wouldn't be bad, but if it were to get out of control, we don't know how to fix it. So it's just better not to go there.
|
|
|
03-04-2009, 06:05 AM
|
#12
|
Dryer sheet aficionado
Join Date: Mar 2009
Location: Chippewa Falls, Wisconsin
Posts: 31
|
Quote:
Originally Posted by REWahoo
Square footage aside, there are definite advantages to the full-time RV lifestyle...
|
We live on our boat seasonally in Florida. $650/month for slip rental, cable, water, and electricity. It's like a very tiny furnished (with a nautical motif) waterfront apartment with a great view! Of course, we have water in the basement!
|
|
|
03-04-2009, 08:12 AM
|
#13
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
|
Quote:
Originally Posted by . . . Yrs to Go
A modest amount of deflation, in it self, wouldn't be bad, but if it were to get out of control, we don't know how to fix it. So it's just better not to go there.
|
To fight deflation we first need to know what initiated it.
The tools to fight deflation are the opposite of what are used to fight inflation.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
|
|
|
03-04-2009, 09:55 AM
|
#14
|
gone traveling
Join Date: May 2008
Posts: 3,864
|
If we do officially go into deflation, can we expect reimbursement from everyone who got a COLA bump in their retirement earnings for 2009?
|
|
|
03-04-2009, 03:55 PM
|
#15
|
Recycles dryer sheets
Join Date: Jan 2007
Posts: 280
|
Quote:
Originally Posted by Westernskies
If we do officially go into deflation, can we expect reimbursement from everyone who got a COLA bump in their retirement earnings for 2009?
|
Would the CPI be the measure? It doesn't seem to be an especially relevant number, at least to me. Maybe when I grow up and get SS........
|
|
|
03-05-2009, 11:10 AM
|
#16
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
|
rents in NYC are falling and commodities are down. add this to the credit crunch and it's called deflation.
i even bought some Lucky Brand jeans a few weeks ago for $50 each or so. In a few weeks i'm going to visit True Religion.
i've been visiting fatwallet for more than a decade and i remember in the last recession they had some insane deals on a lot of electronics. so far it's not as good as the last recession, but i'm seeing nice deals.
and my wife would visit the outlet stores and they had cheap prices on nice stuff like Diesel Jeans
one thing i remember is I was in Macy's one time around 1999 and saw a piece of clothing priced at $40 or so, on sale. 2 years later it's $20. and they had a lot of sales and coupons in the 2001 - 2003 period. bought a lot of stuff at great prices.
|
|
|
03-05-2009, 04:43 PM
|
#17
|
Recycles dryer sheets
Join Date: Jan 2008
Posts: 75
|
Quote:
Originally Posted by al_bundy
rents in NYC are falling and commodities are down. add this to the credit crunch and it's called deflation.
i even bought some Lucky Brand jeans a few weeks ago for $50 each or so. In a few weeks i'm going to visit True Religion.
i've been visiting fatwallet for more than a decade and i remember in the last recession they had some insane deals on a lot of electronics. so far it's not as good as the last recession, but i'm seeing nice deals.
and my wife would visit the outlet stores and they had cheap prices on nice stuff like Diesel Jeans
one thing i remember is I was in Macy's one time around 1999 and saw a piece of clothing priced at $40 or so, on sale. 2 years later it's $20. and they had a lot of sales and coupons in the 2001 - 2003 period. bought a lot of stuff at great prices.
|
$50 for a pair of Lucky Brand jeans?.....wow!! I'm glad I buy my Lucky Brands at Goodwill. I just bought me two pairs and one Gap at $5 each.
Whatever we are having/or will have is affecting me little as I have prepared for such a time like this(you have to when you were born in a country like Argentina and lived through 5000% inflation). I'm still not "feeling" it. I will need to see alot of looting, express kidnappings, being held up at gun point while unloading your groceries from your car etc. We are not yet there gang....let's hope we don't venture into such scenario.
|
|
|
03-05-2009, 06:59 PM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
|
Quote:
Originally Posted by dex
The tools to fight deflation are the opposite of what are used to fight inflation.
|
That may be true but the tools have practical limits when fighting deflation.
To fight inflation the Fed can increase the cost of money (interest rates) an unlimited amount. To fight deflation the Fed can only lower the cost of money to 0%.
To fight inflation the Fed can increase reserve and margin requirements to curtail lending all the way to 100%. To fight deflation, the Fed can increase reserves and lower reserve and margin requirements but they are powerless to make people borrow or lend.
|
|
|
03-05-2009, 07:40 PM
|
#19
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
|
Quote:
Originally Posted by Nanita8140
$50 for a pair of Lucky Brand jeans?.....wow!! I'm glad I buy my Lucky Brands at Goodwill. I just bought me two pairs and one Gap at $5 each.
Whatever we are having/or will have is affecting me little as I have prepared for such a time like this(you have to when you were born in a country like Argentina and lived through 5000% inflation). I'm still not "feeling" it. I will need to see alot of looting, express kidnappings, being held up at gun point while unloading your groceries from your car etc. We are not yet there gang....let's hope we don't venture into such scenario.
|
this is the USA, why would i buy used clothes unless i was a hipster? my wife does resell the baby clothes.
|
|
|
03-05-2009, 07:41 PM
|
#20
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
|
Quote:
Originally Posted by . . . Yrs to Go
That may be true but the tools have practical limits when fighting deflation.
To fight inflation the Fed can increase the cost of money (interest rates) an unlimited amount. To fight deflation the Fed can only lower the cost of money to 0%.
To fight inflation the Fed can increase reserve and margin requirements to curtail lending all the way to 100%. To fight deflation, the Fed can increase reserves and lower reserve and margin requirements but they are powerless to make people borrow or lend.
|
you can also buy up debt creating more demand for it to increase lending, like the TALF
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|