bostonbubble.com

[Guest]

[SamChady]

One thing propping up MA employment is our 3 big industries: education, health care, and biotech. These 3 industries are beating out many of the others, which leads MA to have an unemployment rate about 1% better than the national average (last time I checked). This will keep prices higher in our area I feel.

[john p]

So say we get 10 percent unemployment, how long do you think we will have these levels before we see foreclosures spike? Better put, a typical person gets a pink slip, how long before that turns into a foreclosure?

[john p]

Also, what do you think the ratio is between pink slips and foreclosures. Do you think one out of 20 layoffs will eventually end up being tied to a foreclosure?

[Guest]

Overlay it with an average saving/loans per household and credit capability.
Something's gotta give.
What may never see the crash, but a plateau for the next 10 years. This economy has a long way to recover.

[john p]

What if they dillute the value of the US dollar by turning on the printing machine?

I see it as dilluting a poison, if you have too strong a concentration of a poison, perhaps you add water to dillute it?

Think about all the civilizations that dilluted their currency in tough economies, the bigger and stronger the society, the more bold they were. In most instances it didn't end well.

My mind is sort of thinking of the Carter years. Carter like Obama was a liberal. Carter allowed inflation to happen and many of our parents "grew into their mortgages" because they bought a home for $40k and because of inflation, it was worth three times that in a decade. In the past decade, my house has gone up in price 50%. We have had mostly Republicans who typically favor lenders (lenders don't want inflation because what is owed to them is worth less). Obama will most likely dillute the US Dollar because if people are up to their ears in debt, if we get runaway inflation, that house debt will become a smaller and smaller percentage of one's take home pay. What I think he is going to have trouble doing is reeling in the irresponsible behavior of people. Basically, to get elected he blamed the rich, so that doesn't provide the leadership to get people to behave more responsibly, instead it just creates a scapegoat and people will just behave in the status quo.

[Guest]

Salary increase should go hand in hand with issuing more money into the market, otherwise affortability will be the problem again? Can you see that happening, ei. getting 20-50% salary increase if the inflation will be that , because EVERYTHING will go up: gas, grocery, school tuition, everything.

[balor123]

Salary increases don't need to happen across the board. Yes the printing press is on but where is that money going?

[john p]

http://www.ssa.gov/OACT/COLA/AWI.html

1951-1961

2,799 to 4,086 = 1.46 times

1961 to 1971

4,086 to 6,497 = 1.59 times

1971 to 1981

6,497 to 13,773 = 2.12 times (Carter, socialist)

1981 to 1991

13,773 to 21,811 = 1.58 times

1991 to 2001

21,811 to 32,922 = 1.51 times

2001 to 2007 (6 years)

32,922 to 40,405 - 1.23 times - on pace to be at 1.38 in 2011 (worst decade since WWII.

I think Obama is pumping in money to jack up that wage number. The problem is that we are in a global economy and people with 3rd world skills before used to be buoyed by the regional wealth, whereas today they have to compete with people in emerging nations.

Obama is playing a game with the whole "fairness" because he's comparing a US textile mill worker's salary with a US CEO when he needs to compare a US textile mill worker with a Chinese textile mill worker. Is it fair that the American textile worker makes 50 times as much as the Chinese worker? Is that fair?

[Guest]

So where is affordability in this index with RE 3-4X yearly income? Numbers just don't add up.

Economies cannot grow exponentially either, our planet does not have the capacity to sustain it. Constant economic growth is at the core of all assumptions.
I'll add, that it's just a matter of time, short time probably when the oil prices start going up again, printing $$$$ or not.

[balor123]

I, too, am in the camp of a meteoric rise in the prices of commodities in the near future. I think we'll see most of it by 2020 but signs perhaps as soon as the next few years. By 2050 we'll likely have figured out how we're going to deal with the problem. I'm guessing a few wars will at least partly solve it but most of it will come from restricted growth and increasing utility from existing resources (which primarily impacts the US since we are the greatest consumers and also biggest wasters).

[Guest]

It looks like we'll miss the boat on "figuring it out" part without compromising our life style. It is too late now. Anyone saw alternatives to the jet fuel? Our life as we know it has been enabled only because of CHEAP fossil energy. This is coming to an end, we have reached the peak and are on the way down. If we started seriously developing alternative energy sources 30 years ago we would be in a slightly better position. It's too late now.
Many useful information here.
http://www.theoildrum.com/

[balor123]

I think we can find temporary replacements to supply the grid and to power cars. The problem is that many of the newer innovative solutions require at least trace amounts of rare elements, which can be depleted in a few decades. I expect my life to last more than a few more decades so it will be interesting to see how this plays out. Fossil fuels can be created though I don't know about jet fuel. If it is, then it isn't clear how cheaply it can be done nor with what effectiveness. We will learn how to live with constrained resources but it will be humbling.

[Guest]

It will come down to simple things like growing your own food. Globalization, importing cheap stuff and food from across the world will be the matter of a past. We will need to go back to local markets, industry and agriculture which were effectively destroyed. Railways were replaced by highways, farms and factories with Walmart. Reverting it will not happen overnight plus very few are really aware, everybody's eyes are on climate change. We have much larger fish to fry, like.... food supply.

Ironically, less developed countries with local markets and manufacturing are in much better shape than we are.

One thing is sure, our kids' and grandkids life style will be veeery different from ours.

[GenXer]

The sky is falling? No its not! We do not need to do anything different from what we are doing now. We have no idea what will happen in 1 year, much less in 10, so it is no use spending money on technologies which as of today are completely unproven and uneconomical. Free market of ideas (with some luck thrown in) will most likely produce solutions which we can not even discuss today because we have no idea what these solutions will be. For a long time now the 'experts' have been forecasting all kinds of shortages, but nothing like that materialized.

This recession may last a decade, or it may be over tomorrow. Housing prices can fall another 50% or they can start going up tomorrow. The variables do not move in nice small steps, and progress usually happens in huge jumps. One day its Newtonian mechanics, the next day its the Theory of Relativity. Just like that. There is no going back to Newtonian Mechanics now, just like some new invention will make everything before it obsolete without legislation and coersion. One thing is for sure -fossil fuels are here to stay, until another 'jump' which may someday happen when an invention of some sort gives us an huge improvement in ways we can not imagine now.