If Hyper Inflation arrives ........

Generali

bendix wrote: »

What wealth? There wasnt any wealth Generali. It was smoke and mirrors, mere paper wealth based on a asset price bubble. People felt wealthy but it was like building a castle on sand.

Fair point. However the extent of the drop in asset prices (not just house prices) will have a huge impact.

For example, what happens if you're invested in equities and planning on retiring in a couple of years. You might well have lost half your pension fund and had a 50% drop in the annuity rate you can achieve over the past couple of years. That would mean a fall in pension income of 75%!

Generali

WFT? wrote: »

Generali, you're wrong.

THE rise and fall in the profits of stock depend upon the same causes with the rise and fall in the wages of labour, the increasing or declining state of the wealth of the society; but those causes affect the one and the other very differently.
The increase of stock, which raises wages, tends to lower profit. When the stocks of many rich merchants are turned into the same trade, their mutual competition naturally tends to lower its profit; and when there is a like increase of stock in all the different trades carried on in the same society, the same competition must produce the same effect in them all.
It is not easy, it has already been observed, to ascertain what are the average wages of labour even in a particular place, and at a particular time. We can, even in this case, seldom determine more than what are the most usual wages. But even this can seldom be done with regard to the profits of stock. Profit is so very fluctuating that the person who carries on a particular trade cannot always tell you himself what is the average of his annual profit. It is affected not only by every variation of price in the commodities which he deals in, but by the good or bad fortune both of his rivals and of his customers, and by a thousand other accidents to which goods when carried either by sea or by land, or even when stored in a warehouse, are liable. It varies, therefore, not only from year to year, but from day to day, and almost from hour to hour. To ascertain what is the average profit of all the different trades carried on in a great kingdom must be much more difficult; and to judge of what it may have been formerly, or in remote periods of time, with any degree of precision, must be altogether impossible.
But though it may be impossible to determine, with any degree of precision, what are or were the average profits of stock, either in the present or in ancient times, some notion may be formed of them from the interest of money. It may be laid down as a maxim, that wherever a great deal can be made by the use of money, a great deal will commonly be given for the use of it; and that wherever little can be made by it, less will commonly be given for it. According, therefore, as the usual market rate of interest varies in any country, we may be assured that the ordinary profits of stock must vary with it, must sink as it sinks, and rise as it rises. The progress of interest, therefore, may lead us to form some notion of the progress of profit.

I have no idea who told you this stuff but it's rubbish, old boy.

bendix

Generali wrote: »

I have no idea who told you this stuff but it's rubbish, old boy.

I'm rather impressed you could be bothered to read it. I lost interest rather the first two lines.:beer:

1echidna

Generali wrote: »

I have no idea who told you this stuff but it's rubbish, old boy.

Must have been cut and pasted from elsewhere I feel.

Generali

WFT? wrote: »

It was all from my head, actually. You probably couldnt understand it because you dont have my superior intellect.

Oh, ok. I didn't bother to read past that point as I don't have your superior intellect (although I note this intellect doesn't stretch as far as the use of paragraphs).

I'll just pop you on ignore now to prevent any further intellectual embarrassment.

ETA: I knew I recognised the writing. It's Adam Smith just quoted out of context. You took a big chunk of Adam Smith (the first economist) and for no obvious reason posted it here.

Why would you do that? It's certainly not out of your head unless you're a couple of hundred years or so old!

1echidna

TFT foxes himself into a corner?

harryhound

Hi !!!!!!,

Its your old friend Harry here.
I too recognised Adam Smith and the pin making example
I don't quite know how to put this mate, the the strain of trying to save the world economy seems to be "getting to you".

Have a look at this is is quite mesmerising and calming.
http://www.breathingearth.net/
I've a nasty feeling it proves WE ARE ALL DOOMED, unless we all become vegetarian by the end of the month, but it will help put the little "crunch" in perspective. The bankers will only kill a few million people.

bendix wrote: »

What wealth? There wasn't any wealth Generali. It was smoke and mirrors, mere paper wealth based on a asset price bubble. People felt wealthy but it was like building a castle on sand.

Whatever you class cheap clothes, cheap food, cheap toys, cheap cars, cheap travel ...........................as; I call it wealth and its production is falling at about 10% a year at the moment. So I would call that making everyone on this planet poorer and less wealthy.

I wonder if some of us are suffering from too much C2H5(OH) and others from C21H30O5

http://en.wikipedia.org/wiki/Cortizol