my buck isn't buying what it used to... McDonald's (and other fast foods) dollar menu(s) not-withstanding... and who'd want to eat THERE everyday anyway? :barf:
But sometimes it's all one can afford.
Your buck
isn't buying what it used to, MA-C. Look at the percentage of people in our parents' (or for you... less chonologically challenged ones :lol:....
grandparents' ) generation who not only owned their own homes, but were able to actually pay off their mortgages with plenty of lifetime left over... and now?? [cue in Flying Crane's post here]. Houses that were built at a cost to the homeowner of $25K in Vancouver in the 1950s are now selling there for prices hovering around $2,500,000. An increase of 10,000%. And it's not just ultra-desirable west coast cities like San Fran and Vancouver that are seeing this kind of jump. The fact is, our salaries look vastly bigger, but our immediate ancestors probably enjoyed a higher standard of living than we do... their food was probably more wholesome, they actually owned their own own homes, and they didn't wake up in the night in cold sweats nearly so much, probably, worrying about repo men and foreclosures the way so many of our even well-off types do.
I hadn't realised that the situation in the US was this bad. I can, however, see what Upnorth is refering to. My mother raised my brother and me on an income of about 23 thousand (Aus), but about fifteen years ago, with the death of my stepfather she became a millionaire. While she doesn't work anymore, she doesn't live like you would think a millionaire would. If you were to visit her you would think a normal middle class woman.
We have seen this before and, Exile pointed out, we never seem to learn from it. Is it going to take something catastrophic like 1929 to wake people up?
In a word, ST, yes... probably. We are really rotten at planning, as a species. Instead, we keep waiting for the necessary miracle to kick in.
return to the inflation level you guys had in the seventies and we had in the late eighties and early nineties will see a lot of soup kitchens opening up.
Exactly what I'm thinking. This whole `boom' we've had going for the past couple of decades is predicated, in the end, on continual consumer spending. A savage inflation spike and that's the end of
that... and then what happens to an economy which crashes and burns if it's not in full-tilt-boogie mode? When you can't afford stuff and stop most or all of your `discretionary' buying, what happens to an economy where most of the profit seems to come from income on people's credit buying? And that's when the repo men start leaving calls on your voicemail and the nice people at the bank who own your house suddenly seem to develop a very unpleasant, flinty side...
It is also indicative of something we have created ourselves, our societies that is. In the pursuit of reduced costs and greater profits a vast amount of bottom level manufacturing has been outsourced to other countries, especially in Asia. Where are the boom economies now? Asia. We have sown the wind, the whirlwind just hasn't arrived yet.
Yes, I'm afraid that the bill for all the `affordable' consumer goods we've been filling storage lockers full of is just about to be presented to us. You say, there's no such thing as a free lunch, and everyone nods sagely... but it's like we still really think there
is such a thing.
A big warning sign that should be flashing for everyone is that the value of our dollar has eroded to a level where the Canadian dollar has reached parity.
That hasn't happened since the 70s when inflation was out of control and the economy took a nose dive.
The difference between today and then, IMHO, is the availability of personal credit. This is what keeps our markets afloat. Are people going to be able to continue borrowing no matter what? What happens when that sea of credit dries up?
Either way, this can't last.
That's what I was getting at about private sector debt. Plus, at this point, the US economy is heavily built on loans controlled by other national governments, unlike the situation in the 1970s. Everyone hates taxes, everyone applauds when you generate capital by borrowing (because it shoves the repayment problem down a few generations), but it also makes you hostage to what's happening in a dozen other parts of the world... no, it's not good at all...
