if ya don't get over 105 dB on the dance floor, the
people can hear their feet shuffle and it just ain't right. -- j

p.s. I carry a meter to check this.

Wow. My ears are ringing for just reading about it.

we still have a 900 which is recoverable, the one
I just mentioned. . tough car. . my wife and I did the
sound for a wedding and reception / dance in VA
years ago, and packed it with the kilowatt system
plus 350 pounds of CDs and tapes . . . we blew
their circuit breakers! . whatta party! -- j

may the force be with you, young CG! -- j

Too bad that Saab is no more. A great well-made automobile.

The insurance is forgoing the profits you possibly could have made by investing borrowed money. By not borrowing or taking leveraged positions, you're insuring against a blip, as you say.

I went past that with saab 900 -- got a "new" engine!
it wasn't quite as good as the first one, but fine
nevertheless! -- the $200 per month machine, all
costs included with 7500 miles of commuting and
many side trips. . great car!!! -- j

I totally agree on this one. Greece go themselves into trouble by living fairly high on the hog for a really long time. They got to the end quicker because their total GDP is like the size of Rhode Island's. They got here by working short days, short weeks and then retiring at an age that no German would ever consider. Yet, when it comes down to it its those same Germans who are working well past the Greek retirement age that the Greeks expect to pay for them to party up and retire early. Screw them.. Greece needs understand that they will need to do a bit more than hope that Olive Oil futures jump to 150$ a barrel to save them.

I can't agree that a practice of borrowing money for speculation is a very good idea in this country's economy and inflation practices. You're gambling with someone else's money and your own debt. You get a little blip in the market and a call on your loan, and now you're eating into your own money. That's not insurance, its gambling.

Yeah, I kind of do.

I'm against loose policy too, although not nearly to the extent you are b/c I want stable inflation in the 3% range.

I thought you were saying inflation affects everything but whatever you happen to be selling. I now think you were saying any inflationary monetary policy results in inefficiencies that hurt growth. So maybe your wealth grows at 10% nominal, 6% real under a central banking system that tries to smooth the peaks and valleys with monetary policy. It might average 8% nominal, 8% real, I think you may be saying, if the central bank did not pursue inflationary policy. Trying to prevent unused production capacity, you're saying, the central bank allows inefficiencies, like keeping a plant running that would be utilized better if shut down a re-purposed.

Am I getting closer to understanding? I don't mean to put words in your mouth; I'm just re-stating in my own words for clarity.

I said from a point of view of maximizing return on good ideas in an ideal world, you want to borrow as much 5% money as possible. Not borrowing that money, and thereby forgoing the return you would make on the spread, is like paying for insurance. As I said, this insurance allows you to survive downturns and investing mistakes.

what? you expected consistency?

"You're saying if we expand the money supply, labor-intensive industries should see an immediate boost in profits b/c they can raise prices without increasing costs."

I would NEVER say that. I advocate for a short term deep austerity. A correction that would be painful but not as painful as what is going to happen. I do not support expanding the money supply. that is theft. Some sectors were spared in the last crisis. they would not be spared if the markets were allowed free movement unhindered by the printing of money. Raising prices due to theft affects everyone except the top of the ponzi scheme pyramid. It is the worst sort of lying and theft. It is racketeering-yet if you work for the government or are an economist who advocates it-you never go to jail.

But you say above to "you should borrow as much 5% money as they'll lend". I'm not sure that's consistent.

This brings to mind the image of Yoda, much less vulnerable than he might look to strangers. I like to think by preparing, executing, and doing whatever you want in life in an honest way, you're defeating evil.

What is inflation then? If a large sector of the economy doesn't keep pace with inflation, the inflation didn't happen. You're saying if we expand the money supply, labor-intensive industries should see an immediate boost in profits b/c they can raise prices without increasing costs.

This is sort-of moot, since Herb and I were both posting against borrowing.

The analogy is very good.
Yes, there is no way out without pain. Earlier, it looked like the fairy godmother was the 'supra-national' institutions and the German taxpayer. But the drunk did not reform.
In addition the German economy is in decline as they bring in policies to satisfy the greens, economic suicide for their industries. The big unions are waking up, many jobs will be lost as the big motor and chemical corporates pay higher energy costs and higher taxes to pay for green scams. As for Greece, perhaps there can be an even wider reach for more bail out money, perhaps the EU, ECB, IMF and other supras will find a way to intervene in the Greek economy, I suspect it is too late.

Another point raised by Vinay is interesting- the sanctity of contacts, but when is an agreement not a contract? I suggest that is the case here - when neither party sees the contract as fulfill-able, to both sides it is other people's money - fraud.

Nice, well-written post. Having lived in Greece for two years, I could see the institutionalized problems there long before the EU offered them membership - which I thought the EU was both desperate and abjectly stupid to do.

I'm all for repudiation. Let the EU suffer for their stupidity and inability to properly vet a loan, and let Greece pay for its fiscal problems with the inevitable international trade issues that come with default.

You got my vote!

You sound an awful lot like me and my wife. She is more frugal than me, but I've learned from her. No car or house payments, and screw what the "experts" say. I'm keeping our 10 year old mini-van until the pistons freeze.

The problem is $3 trillion of expenditure rapidly approaching $5 trillion, $2 trillion of tax revenue. Now if you only spend $1 trillion instead and repay $1 trillion of debt from that surplus, it would take 18 years even if rates are kept very low, otherwise much longer. There is also a lot of state, municipal debt plus other obligations.

Wages generally do not increase at the pace of inflation. Lay -offs do. You advocate opportunistic speculations, which is risky anyway but even more so when a person 's disposable income decreases. Moreover you advocate that inflation is a good thing in the first place.

it's like the hermit in the woods who feels, and is,
vulnerable to unseen dark forces out of his control --
we have prepared for the future as best we could,
and now it is happening. -- j

p.s. our health makes us more vulnerable, and
we are dealing with that as best we can.