Interesting article on economics

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Interesting article on economics

Postby ExPatriatePen on Thu Dec 26, 2013 7:59 pm

http://www.zerohedge.com/news/2013-12-2 ... tion-style

"If things stayed the same, the cost of attending Harvard for one year in 2013 would be closer to $7,000 per year (the current tuition is $54,496 per year)"
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Re: Interesting article on economics

Postby Factorial on Thu Dec 26, 2013 8:35 pm

Well, "If things stayed the same" since the day I was born I would be a 48 year-old newborn today.

On the car example, I would argue that you get much more for 15K today than you got for the same 15K in 1938. And the average price of that new car is higher today because people want more and the credit is available to allow them to get it.

As for Harvard, this doesn't take into account the increase in demand for a Harvard education today vs 1938 and I'm guessing the payoff for completing that Harvard education today is much higher that it was in 1938.

And no, I'm not just posting this to argue with you EPP.

Edit: As for the average price of housing, I'd like to see that as average price of housing per square foot. We know how much bigger houses built today are than they were even in the '50's and '60's,
Last edited by Factorial on Thu Dec 26, 2013 8:37 pm, edited 1 time in total.
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Re: Interesting article on economics

Postby Hockeynut! on Thu Dec 26, 2013 8:37 pm

That is a really interesting article. Isn't it odd how some of the "products" have gone up so much more than expected? A Harvard education is almost 8x more, a house is almost 4x but a new car is just over 2x the expected amount and a movie ticket is less than 2x.
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Re: Interesting article on economics

Postby columbia on Thu Dec 26, 2013 8:42 pm

Check out the price of memory in 1957:
http://www.jcmit.com/memoryprice.htm
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Re: Interesting article on economics

Postby pensfan1989 on Thu Dec 26, 2013 8:46 pm

I get the point that the article is showing, but it's almost impossible to make a simple comparison when technology is taken into account.
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Re: Interesting article on economics

Postby Factorial on Thu Dec 26, 2013 8:47 pm

columbia wrote:Check out the price of memory in 1957:
http://www.jcmit.com/memoryprice.htm


What would a lowly chomebook be worth if you could go back to 1938?
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Re: Interesting article on economics

Postby ExPatriatePen on Thu Dec 26, 2013 10:02 pm

Factorial wrote:Well, "If things stayed the same" since the day I was born I would be a 48 year-old newborn today.


Factorial wrote:
And no, I'm not just posting this to argue with you EPP.


Mmmmmm. Yeah. OK.
Last edited by ExPatriatePen on Thu Dec 26, 2013 10:07 pm, edited 1 time in total.
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Re: Interesting article on economics

Postby Sarcastic on Thu Dec 26, 2013 10:05 pm

ExPatriatePen wrote:http://www.zerohedge.com/news/2013-12-26/100-years-success-fed-inflation-style

"If things stayed the same, the cost of attending Harvard for one year in 2013 would be closer to $7,000 per year (the current tuition is $54,496 per year)"


Image

The house pricing jumped out at me most. Not the price, but the percentage of annual income needed.

Demand on individual items changes throughout time, but it is the overall dependence on credit and this whole crazy monetary system that pretty much puts the entire population in debt is what worries me.

Scene from the brilliant movie, Cabaret.
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Re: Interesting article on economics

Postby count2infinity on Fri Dec 27, 2013 12:22 am

ExPatriatePen wrote:
Factorial wrote:Well, "If things stayed the same" since the day I was born I would be a 48 year-old newborn today.


Factorial wrote:
And no, I'm not just posting this to argue with you EPP.


Mmmmmm. Yeah. OK.


Out of all the points he makes THAT is the one you decide to reply to??? :slug:
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Re: Interesting article on economics

Postby ExPatriatePen on Fri Dec 27, 2013 9:59 am

count2infinity wrote:
ExPatriatePen wrote:
Factorial wrote:Well, "If things stayed the same" since the day I was born I would be a 48 year-old newborn today.


Factorial wrote:
And no, I'm not just posting this to argue with you EPP.


Mmmmmm. Yeah. OK.


Out of all the points he makes THAT is the one you decide to reply to??? :slug:


Boy you stay butt-hurt for a long time.

That was the way he started off his post, not exactly a way to establish credibility.

His other points have just as many flaws. The cost RATIO of a Harvard education has risen over 750%. The "value" (recognize that the article is saying that even when factoring in inflation today's cost would be $7K not that it was $7k in 1939) sure as hell hasn't.

And that bigger house? 400% bigger? Factorial hasn't driven through Bellvue, Avalon or the other communities that were built in that period recently.

The size if the average house built in 2013 is 2100 square feet. Divide that by 4 and that would mean the size of that average 1939 house would have to be 510 square feet. Ummmm no.

Speaking of home prices. This is a great article on what the hot markets are projected to be:

http://www.forbes.com/sites/erincarlyle ... t-in-2014/

No surprise that 4 of the top 5 and 8 of the top 13 are in states with Zero state income tax.

( less than 20% of states have no income tax)
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Re: Interesting article on economics

Postby Troy Loney on Fri Dec 27, 2013 10:26 am

having a bachelors in economics and history...i find the thread title very misleading.
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Re: Interesting article on economics

Postby count2infinity on Fri Dec 27, 2013 10:38 am

Lol... "Butthurt"
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Re: Interesting article on economics

Postby Crankshaft on Fri Dec 27, 2013 10:39 am

9 replies before this thread went off the tracks.
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Re: Interesting article on economics

Postby MRandall25 on Fri Dec 27, 2013 10:43 am

Like flies to a zapper...
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Re: Interesting article on economics

Postby Guinness on Sat Dec 28, 2013 10:08 pm

Image
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Re: Interesting article on economics

Postby Pavel Bure on Sun Dec 29, 2013 3:31 pm

Troy Loney wrote:having a bachelors in economics and history...i find the thread title very misleading.

Do you find it shallow and pedantic?
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Re: Interesting article on economics

Postby Guinness on Sun Dec 29, 2013 8:44 pm

The popular notion is that we are "so" much wealthier today than people were in the first part of the 20th century, but the facts simply do not bear this out. It's true that innovation and technological development have been advanced by the debt-based economy, but the day-to-day lives of everyday people are decidedly worse off.

The fact is, by a considerable margin more people are in debt today than were in debt 100 years ago. Despite the popular notion propagated by modern so-called economists, debt is not a good thing. Debt is an obligation, and a claim on the rest of a person's property. Savings is at this point an almost peculiar, historic practice, despite it's role in individual self-sufficiency and in securing one's future. Savings is a practical impossibility under a paper currency regime, for the very simple and deductible fact that since it is so easily produced, it will be; and therefore it is inevitably susceptible to devaluation. Parenthetically, this is why such a currency regime is so favored by governments - it allows the government to hold out the candy bag, without ever demanding much in payment.

The fact is, if we are so much wealthier today than people of 100 years ago, why is it that it now takes 2 "incomes" to sustain a marginal standard of living for your average 4 person family? Aside from the admitted advancements in technology (and of course ignoring for the sake of argument the fact that as technologies advance in a free market they generally speaking become more and more affordable -- see personal computers, lasik eye surgery and cell phones for a few examples), there is no real argument against the destructive nature of fiat currencies. (I'd also take issue with the "advancements in technology" theory... the advancements people experienced in the late 19th and early 20th centuries were almost as stark and dramatic, perhaps even moreso, than what we have experienced in the 2nd half of the 20th century; but again, for the sake of argument...)

We hear that a return to a commodity based currency would herald a terrible economic collapse, and there may be a measure of truth to it, but the fact is, a terrible economic collapse will inevitably come, because an infinitely depreciating currency is a mathematical impossibility; it is also inevitable that once the fiat regime collapses, people will return to trading goods and services at equal value (as opposed to a dictated value). So the "yeah but" is effectively a fait accompli.

And yes I know I indicated I wouldn't comment. I've kept it apolitical, and quite factual. Whatever positives "we" have experienced as a consequence of being forced to operate under a fiat currency regime, they are far outweighed by the net negatives. Gone are the days that a person with a fairly rudimentary education but practical manual skills can provide a comfortable standard of living for even the modern 2 or 3 person family as had been the norm in the not too distant past. Gone are the days when a person could set aside 10% of his income and be relatively secure in his future. Gone are the days when a person could imagine being free and clear in all his possessions. Today, it is a practical impossibility to provide a comfortable standard of living on a single higher-education based income, let alone two. Securing one's future now means gambling a percentage of one's income on the stock market, where 20% losses every decade are now the norm since the inception of the debt based economy. It works out great if you manage to miss the downturn, but if you were planning on retiring in 2008, how well did it work out? Debt is of course the standard for most families, even well into the latter years when a they should be looking to be secure in their property.

The debt based economy can be best described for the average person in one word: insecurity.
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Re: Interesting article on economics

Postby BigMcK on Sun Dec 29, 2013 9:23 pm

My radio told me today that we in are in debt to China. Cities, States, Fed's are in debt to unfunded liabilities. Other nations are in debt to the USA.

Collectively, aren't we all in debt with zero hope of paying back?
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Re: Interesting article on economics

Postby Guinness on Sun Dec 29, 2013 9:37 pm

BigMcK wrote:Collectively, aren't we all in debt with zero hope of paying back?


Every unit of currency in circulation is a debt obligation - "Federal Reserve NOTE". Every FRN is borrowed into existence.

You are correct - there is no hope of paying the debt back.
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Re: Interesting article on economics

Postby ExPatriatePen on Sun Dec 29, 2013 9:39 pm

Guinness wrote:
BigMcK wrote:Collectively, aren't we all in debt with zero hope of paying back?


Every unit of currency in circulation is a debt obligation - "Federal Reserve NOTE". Every FRN is borrowed into existence.

You are correct - there is no hope of paying the debt back.

Pay it back with what?
(Rhetorical, no need to answer)
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Re: Interesting article on economics

Postby Guinness on Sun Dec 29, 2013 9:42 pm

ExPatriatePen wrote:
Guinness wrote:
BigMcK wrote:Collectively, aren't we all in debt with zero hope of paying back?


Every unit of currency in circulation is a debt obligation - "Federal Reserve NOTE". Every FRN is borrowed into existence.

You are correct - there is no hope of paying the debt back.

Pay it back with what?
(Rhetorical, no need to answer)


It's a valid question, because it speaks to the nature of the currency. It can't be paid back because it has no value in any real terms - you can't pay back a debt with another debt.
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Re: Interesting article on economics

Postby Sarcastic on Sun Dec 29, 2013 9:52 pm

Nice post, G. It feels like the debt system was created with a purpose in mind. Wouldn't you agree?
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Re: Interesting article on economics

Postby count2infinity on Sun Dec 29, 2013 9:55 pm

What are the options for getting debts back to zero? Would it require some sort of complete overhaul of the system and forgiveness of debts. I mean at the end of the day it's all just hand waiving isn't it?
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Re: Interesting article on economics

Postby ExPatriatePen on Sun Dec 29, 2013 10:06 pm

count2infinity wrote:What are the options for getting debts back to zero? Would it require some sort of complete overhaul of the system and forgiveness of debts. I mean at the end of the day it's all just hand waiving isn't it?

Essentially, Nixons abandonment of the gold standard was that event.
The currency in circulation at that time was no longer
redeemable for anything.
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Re: Interesting article on economics

Postby Juice on Sun Dec 29, 2013 10:28 pm

MRandall25 wrote:Like flies to a zapper...

<3
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