This bailout will cause rapid inflation, which is effectively a nationwide wage cut.
This will lead to labor market price discovery. Meaning people with high-value skills will demand cost of living raises in order to restore their standard of living.
People with low-value skills will have to make due with no wage increase, regardless of the rate of inflation.
The plan does not call for cuts elsewhere in the budget in order to come up with the money, nor does it call for new taxes to raise the money. Where does the money come from, it has to be printed, which dilutes the value of existing dollars.
The money supply has expanded, so when the liquidation phase of the meltdown is over, there will be more dollars/unit productivity and hence inflation.
"The money supply has expanded, so when the liquidation phase of the meltdown is over, there will be more dollars/unit productivity and hence inflation."
Credit spends just like money and it's comming crashing down. We're heading for deflation.
When the market is flooded with dollars. When you print dollars and put those dollars into the system. Billions of dollars it means there are of course more dollars. Supply and demand. If there are more dollars they are worth less. If they're are less dollar they are worth more. You have to find a level ground. But flooding market with money, too much money devaluates the dollar. So prices go up. It will take more dollars to buy a loaf of bread.
Yes, he expressed concern about deflation on YTT a while back. But I think inflation will be the dominant force for the next decade.
It will alter the dollar exchange rate and bring worldwide parity to the rate of pay for unskilled and semi-skilled labor.
Currently it is unfair for a US factory worker to make $11/hr and a Sumatran to make only $0.25/hr for the same job. Inflation and the resulting shift in exchange rates will bring that US worker down to the Sumatran level.
What do you have, an enormous state dept, an enormous amount of man/women in war costing fortunes, an enormous bailout, and the joke of the world as VP candidate.
What goes over the world is "If BS were currency, Palin could bail out Wall Street herself...
I do not need have to explain that we understand that BS is Bull Shit.
If the bailout is not supported, the USA will "live" for another 48 hours!!!!!
Biden voted no to SDI in the 80's, no to pershing missles in europe, no to expelling Iraq from Kuwait, for the 2nd gulf war, then no to fund the troop surge. And Obama, well he just votes "Present". But one thing he did not deny in the debate w/ McCain is that he'd increase spending by $800 BILLION. Change you can believe in? Only if you're a moron.
This bailout will cause rapid inflation, which is effectively a nationwide wage cut.
This will lead to labor market price discovery. Meaning people with high-value skills will demand cost of living raises in order to restore their standard of living.
People with low-value skills will have to make due with no wage increase, regardless of the rate of inflation.
augieaugie2 3 years ago
How the hell would it cause rapid inflation? because somebody said it?
Rael5000 3 years ago
The plan does not call for cuts elsewhere in the budget in order to come up with the money, nor does it call for new taxes to raise the money. Where does the money come from, it has to be printed, which dilutes the value of existing dollars.
augieaugie2 3 years ago
The money supply has expanded, so when the liquidation phase of the meltdown is over, there will be more dollars/unit productivity and hence inflation.
Zeldovich 3 years ago
"The money supply has expanded, so when the liquidation phase of the meltdown is over, there will be more dollars/unit productivity and hence inflation."
Credit spends just like money and it's comming crashing down. We're heading for deflation.
soylentgreenb 2 years ago
When the market is flooded with dollars. When you print dollars and put those dollars into the system. Billions of dollars it means there are of course more dollars. Supply and demand. If there are more dollars they are worth less. If they're are less dollar they are worth more. You have to find a level ground. But flooding market with money, too much money devaluates the dollar. So prices go up. It will take more dollars to buy a loaf of bread.
HaggaiVS8 2 years ago
If you listen to Roubini carefully in October 2008, he predicts deflation, not inflation.
investur 3 years ago
Yes, he expressed concern about deflation on YTT a while back. But I think inflation will be the dominant force for the next decade.
It will alter the dollar exchange rate and bring worldwide parity to the rate of pay for unskilled and semi-skilled labor.
Currently it is unfair for a US factory worker to make $11/hr and a Sumatran to make only $0.25/hr for the same job. Inflation and the resulting shift in exchange rates will bring that US worker down to the Sumatran level.
augieaugie2 3 years ago
pity no one listened to him 2 years earlier when he forecasted the scourge of spiraling property prices
Marc Faber for US president and Roubini for treasurer. Spend the $700 billion on rounding up the wall st pirates and throw away the key
echopper1 3 years ago
No McCain, no more republicans.
What do you have, an enormous state dept, an enormous amount of man/women in war costing fortunes, an enormous bailout, and the joke of the world as VP candidate.
What goes over the world is "If BS were currency, Palin could bail out Wall Street herself...
I do not need have to explain that we understand that BS is Bull Shit.
If the bailout is not supported, the USA will "live" for another 48 hours!!!!!
Vote but please vote for CHANGE
Scoot2612 3 years ago
Biden voted no to SDI in the 80's, no to pershing missles in europe, no to expelling Iraq from Kuwait, for the 2nd gulf war, then no to fund the troop surge. And Obama, well he just votes "Present". But one thing he did not deny in the debate w/ McCain is that he'd increase spending by $800 BILLION. Change you can believe in? Only if you're a moron.
RockDog101 3 years ago