Comments by "" (@jmitterii2) on "Stoic Finance"
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You know, it's creepy when someone from Great Britain names the county and cities I live in and near in low obscure populated state.
And a local pluto-ratic home builder that builds hastily built shitty houses.
Just a few years back, about 2018, I had to giggle when my nephew remarked, while driving through a CBH subdivision to visit my cousin who bought (borrowed to buy) a house and lives with his in laws, wife, and kids to make ends meet,
"Hey look, these homes all look drab and falling apart, they look worse than an old Soviet style built housing project."
I smiled and answered at least the old soviet homes that look better than this shit was essentially "free". These poor renters or home buyers have to pay through the teeth for the privilege to live in these crumbling wrecks.
These CBH houses are horrible and age worse still.
These homes look like absolute trash, poorly built facade of phony stucco siding crumbling revealing wood framing and even insulation falling out, and poking out. Hot water heaters littering yards. Sheets of shingles dangling over the edge of the roof. And piles of shingles lay on the ground below. Home after home looking the same.
Concrete that looks like they hired Evergrande to pour the foundation, crumbling with moss bits from a leaking outside water spigot.
Some homes were fairly new 2 to 3 years old at the time, lots that were left empty by 2009 and just recently finally built just 2015-2017.
And the older subdivisions portions built in 2006-2009 just as the boom and bust came and went.
Unless you knew which portion was the new or the old, you wouldn't have a clue other than perhaps you ventured into a space-time warp and found yourself in the Russia circa 1995 or so.
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Inflation is and always is a monetary thing. That's all economics foundation since Ancient Greece.
There is no other inflation causes. It is always a result of too much money in the system.
Inflation is the rise in prices across all goods and services. Not just a shortage in one or two things. Or in this sector. That's not inflation.
We're getting inflation, that is rise in prices across the board of all sectors even the low demand currently service sectors; they're actively raising prices as their inputs have increased, even though service sector demand is still below that of pre-pandemic levels.
The only way you can reduce inflation like this is to raise interest rates. In a non-debt based money system, you would stop minting coins gold silver cheese cucumbers whatever the medium, you would halt minting more coinage.
And yes, this does cause a recession.
Welcome to the stupidity of capitalism and let it be fuck head markets.
You know some structural planning does fucking help. I mean we do have in the US social security so we don't have rampant bag ladies and tramps roaming the streets that was so frequent in the 1800's... we have fire service, police service, judiciary, etc.
Other nations don't have people going bust because of of affordability of healthcare because they have universal healthcare like we have universal fire services and police services so your home and place of work and business and groceries and other stuff don't go up in flames because they couldn't afford to pay the fire department or police when bands of gangsters came robbing their establishments.
But morons ate the plutocratic stupidity propaganda and we now suffer the consequences of a few. As usual throughout history until it becomes intolerable. Which is fast approaching.
The Fed is in a corner, there was not structural recourse to the problems we face. And throwing monetary policy at it is already burnt to a crisp, leveraged beyond repayment aka debt trap. No matter what we do will result in a depression.
The fact remains, if we do nothing we have a depression with stagflationary results where GDP is negative yet prices continue to go up... don't think that can happen... look at several nations in Europe and S. America. Happens there repeatedly just in the past 50 years.
If we raise interest rates, the economy as it is structured today, based on a pyramid of new money lent and borrowed and call that cluster mug house of cards growth pyramid scheme or Ponzi scheme, we will enter a recession. The bad debts clear away, prices will be forced to come back as less money to chase goods and services, and goods that haven't the supply to keep up with current demand caused by fear that is induced by inflation (got to raise rates and buy now as prices will only go higher).
This would put pressure on stupid demand to stop being stupid and quit buying today and raising rates of their outputs.
It would allow over priced assets to reset as defaults would happen and you would get a true valuation of a home or this good or that good or for rent.
Without a planned system at all, this is the idiocy you have two choices:
1) Stagflation that lingers until it all comes undone.
2) Upping interest rates which will contribute to a recession and reset of prices to which a stronger foundation can be built. This one is shorter lived misery.
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I think everyone including myself should watch this video you just made twice.
It has every key point we all need to understand:
1) We don't know how this exactly plays out, but we know the potentials for longer term disaster
a) Could be long lasting where price of homes are high, rent is "lower" than payment on a house for a while then that shoots up when big money corners most of the housing stock.
b) 75% of homes are still mortgage purchased and the 25% big money cash purchases cannot cope and they realize losing rent prices along with equity prices is just impossible (particularly with rising inflation that must and will ultimately require and be met with higher interest rates). And even Big money decides to pull a Zillow and dump their market maker stupidity in real-state that never had margin enough to play housing as a fungible asset like stocks... but they're not... they're all extremely different in terms of construction, utilities, economic circumstances, depreciation/upkeep management, etc. Thus dumping their 25% of the recent several year purchasing spree onto the market to stop loss out of the stupidity. That was never wise for them or for renters or buyers/sellers or homeowners or smaller to mid size landlords alike.
c) Be cautious. Know that if you set on buying, that you're likely going to be upside down for a long time. Meaning you probably won't be able to refinance the mortgage. Secondly, if you sell in just a few to even 5 years time or even 10 years, you could still end up owing more than that future sell price you got. Meaning, you were worse off than just renting. You may have to enter into a short sell just to get out from under the upside down equity to debt ratio.
d) Thinking this is a great time to become a landlord with high rents... this could be also a costly mistake... not only will you be upside down on the equity, but rental income will only drop as recessions could hit and higher rates to tame stagflation could last for over half a decade to a decade.
e) A big recession means you are forced to sell. People don't tend to sell their life time retirement savings or stocks or even long term or mid term holdings because they're "scared". They do so because they've lost their job... and the new job can't be found and they've tapped any and all savings. And if they do find a job, it's insufficient for the debts they have currently.
And buyers simply aren't there, nobody has any extra cash to throw at the market... particularly at a market that just seems to be a great way to light your cash on fire.... throwing money at something that just keeps burning your money up gets very depressing. Just like we get fomo to the upside... we get very few buyers wanting to DCA into stuff for a while as it just keeps going down, and DCA near high levels and then grinding lower levels literally is like lighting money on fire... so you get smaller volume sides on the bids or taking on ask prices. No buyers and forced sellers.
So be cautious.
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In speculative mania periods like this, even art becomes over done. As the rich that got richer have incomprehensible amounts of money they're seeking to preserve anyway they can, and have exhausted typical means of stocks, government bonds, corporate bonds, CD's, simple savings, shell companies, real-estate, etc. so they go exotic with art... particularly when art becomes a pass time hobby for some of the super rich not seeking to really ever make a return on their art spending, but rather a trophy for themselves. Similar fomo hits some of the other big cats... so they too pile into art.
But just as fast as they all pile in, they all stop showing up suddenly too. Or they attempt to sell their art for stop loss. Some billionaires in the past gave up even trying to sell their art and just in some rage against their own stupidity take it out on the art and ruin the piece. As if it was the painting or antique or whatever object's fault for their decision to purchase the item well beyond the limits of even insanity would permit.
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Doesn't have to last long. We must learn economics. WE must realize it is a philosophy. An invention.
We can invent a better system that isn't based on the appendages of evolution from which our current economic thought comes from: feudalism which comes from slavery.
Our systems in place were designed to ensure an aristocracy took front and center stage. It is a bozo the clown model that most 1st world and even less prosperous nations have shunned as a form of monarchy absolute monarchy dictatorship and many other now viewed as tyrannical forms of government... via introducing democracy 1 vote for all citizens of their respective nations as to all operations on how the government ought function.
Same democratization of the work force via co-op model must be adopted.
And to learn the propaganda scapegoating and gas lighting (all is fine nothing to see here) are used.
Subtle but highly effective... worship the aristocrat as if they have a deserved place and requirement in society for prosperity to happen when in reality they have a parasitical nature if such aristocracy or any really take hold.
They are at variance to the interests of the typical worker or small business operator and worker.
They have an interest in scapegoating collective bargaining of unions as the blight of all ill in the world, as well as race, the very government itself pretending it is not democratic that it is a separate entity from them and from you when in reality a democratic government is one that is ran by all of us, that we ourselves are the government, but they will instill that government is bad, ripping apart any participation of democratic government and with both hands the mass of people who have been told to refrain from critical criticism of current economic systems with jingoism and threats that they're not a true Scotsman fallacy galore with mockery of well you're a "communist" or "socialist" all while hypocritically both in terms of government control you hand that democracy over to them, they become plutocratic oligarchy where you have absolutely no influence over law and future policy, and they pour social policy to their benefit to further entrench themselves into the marrow of society, a deep rooted fungal infection, they become the feudal lord and we all become feudal serfs with few abilities to effectively push for policies that would benefit everyone, as anything like this would sufficiently take too much political and economic power from the aristocracy. They'll gas light that all is better off now, so no need to critique the obvious and repetitive failures of our economic system over time, repealing laws that were put in place for solid reasons as to not allow such parasitically induced stupidity to happen again by robber barons.
Make people think they too are just robber barons in waiting.... until they realize that's a complete and utter scam. And in fact the system indeed seeks to entrap them in giving again with both hands their political and economic power to a few.
We can create a co-op reserve bank that works toward capital formation to enterprises that are indeed co-ops in which all persons have 1 vote no matter the share holding quantity in such a co-op firm.
That workers and other stake holders alike have 1 vote each as to all aspects of the operation of the corporation.
In such a democratized workforce similar effects would take place as it did in dispelling the stupidity of divine right by pigs aka monarchs or feudal lords, and instilled liberty in which allocation of resources and plans go to benefit all workers not just a few plutocrats at the exploitation of the very workers who made it all actually happen.
You would never have or rarely have a democratized work force:
1) Vote themselves out of a job to increase already profitable company by a few cents per share to outsource in some country who has a tyrannical form of government thus suppressed wages, a from of inauthentic comparative advantage.
2) Rarely or scarcely ever share productivity gains brought to us via technological advancements: they're not going to issuing stock buy backs that provide absolutely no long term value and actually can cause indebtedness for a short term buying spree pump in price on their stock, procure useless luxury stupidity for a few executives at the expense of needed capital expenditures to improve production and administration equipment and processes.
3) Formulate a wage/salary strategy that is not based on merit nor ability to pay, but on what one can get away with, exploitation. Wages and salaries wouldn't be placed under the rug, where nobody knows the true price of their work relative to others... imagine going to a store where the prices of each item you wanted to purchase was blank... and each time you came up you had to guess to the cashier on the price, and haggle blindly not knowing if the price the countered or started was really fair or not... perfect knowledge principle utterly violated. Such wages/salaries for each position would be clearly posted and regularly negotiated with considerations in context of the businesses ability to pay aka it's profitability or losses.
4) You would never have workers vote to have an unsafe work environment.
5) You would never have workers vote to have a threatening work environment in which employees are pitted against one another, when they're supposed to be collectively a team working to compete against the competition... not each other.
6) You would never have workers vote to ruin their own surrounding environment they all live and work in.
7) You would never have workers vote to forgo known quality problems for short term profits... short term because eventually those poor quality issues will surface and sales will plummet, reputation ruined.
8) You would never have workers vote to squander capital or in debt themselves that have no or limited impact on increasing productivity, safety, profitability not just for the coffers of the enterprise, but for the workers as a whole.
9) You would not see votes to perform scams for short term reward and long term pain; workers have a longer period of return requirement and therefore look for long term growth and sustainability in the operation of a firm, while many modern day so called entrepreneurs (really sacks of manures) have only short term interest in flipping the business either to a venture capitalist who then wants to flip it on to the open market in an IPO... no long term strategy that's real, but for short term dress up to make the business look pretty to some suckers, not really care if the company has any interest in ever becoming profitable, or make debt obligations, or really do anything at all in the long haul, so long as it can dress the pig up in lipstick and shiny jewelry enough to fool entities they're flipping the business on pays top dollars, they're in and out hello good bye.
Basically, the risks of a business are taken strongly on the workers even more so than the founders.... founders often playing several businesses at once, particularly in our modern time, often under a corporation to which debt is detached from their own personal holdings, they're not risking their own money, and of their own money they have comparably much more disposable amount than we the worker. $1,200 coach ticket for a flight on a $50K year worker is 2.4% of their income. Where as a first class cabin and shower ticket to the $50K year earner $12,000 is 24% of their income... the $12,000 ticket to $1 million a year earner is only 1.2%... in respect to their annual income, a $1 million a year income person is paying less disposable income compared to the 2.4% relatively much meager $1,200 ticket of a $50K a year worker.
It is cheaper for the million a year person to pay the $12K price tag, than for median household earner (2 income earners of $50K) to buy coach ticket.
Let that sink in.
Let it all sink in.
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That's one of the reasons US hasn't adopted a cheaper and more effective higher quality universal healthcare system.
Another big reasons, is that healthcare for the top 1% actually makes them a return... albeit a small 1%ish return... as a rich dynastic family or smallish business will simply make their own insurance company... they then load it with half a million to 1 million up to 4 million to even 10 million as collateral. This collateral then is used for investments and reserve for payments while collecting premiums from workers or using returns on collateral to feed the kitty to keep it at par plus about a 1% return after capital gains and dividends and payouts.
To avoid big hits to the kitty, they often take out insurance if draw downs become this amount, that insurance will pay to make them whole again. This premium is well below the return on their investments from the kitty.
Again, their net advance is about 1%.
So current US healthcare system pays them a 1% return.
Instead of it costing them anything it pays them a return instead.
Ta-da! And that's why they really really don't wanna give that up.
Hence why these disconnected nut jobs thought an HSA would be brilliant for the peon class. Why, that's what they effectively have, and they don't really pay anything, they make money from it instead. Why can't they just float a note to cover expenses as one disconnected billionaire lamented about a government shut down in 2016.
Float a note... you hear someone refer to taking out a loan like that you know they're disconnected to the nth degree from the financial affairs of the general population. That or they're a corporate financier or accountant.
Now this doesn't work with large or huge mega scale corporations with 100,000's or more employees... as the collateral becomes too big opportunity costs are outweighed to do so... example Amazon or Walmart or a cell phone company of 100K or more workers would require a billion or 2 billion or 3 billion to be put down as collateral. Their 1% return on such a huge collateral would be too little.
So in these instances it does cost them at that corporate level... but again its cheaper as the premiums with such a big giant group discount is small comparable to revenues the mammoth company makes.
And the collateral required to act as their own insurance that would be $1 billion or $3 billion, can be put to use making a bigger return expanding the company or in many instances as of the last decade, stock buy backs to pad the pockets of the owner class who have warrants turning them into stock as you pump the price, you sell into that and Voilà! Convert corporate profits in the banks of the corporate accounts into the personal accounts of the owner class. Voilà!
The cost to insure their millions of people only amounting to $100 million to $500 million or less a year on revenues of $3 billion or $10 billion or $100 billion... no problem.
The owners of the corporation of course with their family brood dynasty, they of course will make their own dynastic insurance company as mentioned above... sometimes if they're members of the board entitled to corporate benefits, they'll join that instead or on top of their family insurance company.
It's similar to why they really don't care that much about deficit spending, borrowing lead to government floating treasuries and bonds. Who buys these bonds 95% of the country doesn't. Instead its largely the banks on the T-Bills side and the rest are very wealthy 1% looking to preserve their wealth.
They've turned their tax costs into a loan with interest.... so not only do they not have to pay taxes, they get their money back with interest.
This is how plutocratic our systems in the US truly are.
And how hardwired they are.
Lots of freeloaders with lots of power to keep their freeloading powers intact.
And that's why they'll go down until the entire system just implodes. As late stage capitalism or plutocratic or just any economic system with too much concentration of power and economics into the hands of a few always does.
The weight of it always comes crashing down on them too as it collapses into unbearable untenable misery for the masses.
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