morbo
Complete Your Transaction
join:2002-01-22
00000
clubs:
 ·Charter Pipeline
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| reply to Jason Levine
Re: High turnover rate
considering you will lose out 3% or more every year due to inflation, it is equivalent to getting a serious pay cut over seven years. For example, with a starting salary of $50,000 a year, watch what happens to your buying power from year to year (in constant dollars):
year 1: 50,000
year 2: 48,500
year 3: 47,045
year 4: 45,634
year 5: 44,265
year 6: 42,937
year 7: 41,649
No raise in 7 years is like a $8,351 pay cut IF inflation stays at 3% which is not likely. In the next 2-5 years, inflation will jump higher. My guess is that with the dollar crashing and the economy sinking into the toilet, inflation will spike from 5% to 9%. |
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Jason Levine
Premium
join:2001-07-13
USA
| Good point.
Oh and thanks for the depressing inflation numbers.  My usual raise is 3% so I'm barely keeping up with cost of living increases now. It looks like I'm going to be effectively taking annual pay cuts in the future.  |
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morbo
Complete Your Transaction
join:2002-01-22
00000
clubs: | i used 3% as an average. not sure of the actual numbers. |
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mglunt
join:2001-09-10
Fredericksburg, VA
 ·Verizon FIOS
1 edit | reply to morbo
Hmm. Where might your evidence be of the economy tanking?
Want some facts?
Since 1997, the avg hourly earnings dropped in only 2 of the 118 months.
Unemployment is just 4.7%, and has not been at 5.0 since Nov 05.
The economy has added jobs every month since Sept 03 - a total of 8.6 Million.
Maybe you should look at facts instead of what MSNBC tells you to think. »www.bls.gov/ |
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Thaler
Premium
join:2004-02-02
Encino, CA
| said by mglunt  :Hmm. Where might your evidence be of the economy tanking? I dunno about media outlets...but I take it as a bad sign when Canadians are now laughing at our money.
Seems the only "cheap" place US citizens can go tour around is Mexico. Ick. |
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rahvin112
join:2002-05-24
Sandy, UT
| reply to mglunt
Statistics are great aren't they? My favorite saying is: There are liars, damned liars and statisticians.
For instance, lets take a look at your first claim.
said by mglunt :Since 1997, the avg hourly earnings dropped in only 2 of the 118 months. What's significant about this claim is what is said and not said. The first, issue is that hourly earnings actually dropped during 2 months. This is the first decline in hourly income since the great depression. Significant? I would say so. Second, what they don't say is that hourly wages haven't increased since 1997. The key to making bad information seem good is to talk about something else and try to spin it positive, like your statement. The fact is hourly wages have been stagnant for a close to a decade and dropped during two months for the first time since the great depression.
said by mglunt :Unemployment is just 4.7%, and has not been at 5.0 since Nov 05. Yep, unemployment is low, no question about that. Unemployment isn't much of an indicator until it's too late though. Although what you don't say is that unemployment has creeped upward the last few months, something that could indicate a trend.
said by mglunt :The economy has added jobs every month since Sept 03 - a total of 8.6 Million. What that doesn't say is that the number of jobs added was well below historical averages and expectations. Couple this with the vast majority (80%) of those jobs being below poverty level wages and in the service sector. So you got your 8.6million jobs and 8 million of them were at fast food joints for less than $10 a hour. Hardly anything to cheer about.
But the main point of the original poster is that the decline in the dollar is a serious threat to our economy if it continues. The dollar has historically been used as a reserve currency. What that means is that people put their money into dollars for stability. Being a reserve currency benefits the USA because all those foreign funds come into our economy and are used by American companies to create jobs, fund growth and even create new companies. If foreigners move their reserves into for example the Euro it would damage the American economy immensely. Not only that but pulling their money out of dollars would drop the dollar even more, which in turn will cause more people to bail. A spiral that eventually results in the collapse of the dollar as a world currency and the inability of the USA to sell bonds resulting in a near shutdown of government because we deficit spend. Not only that but we would be unable to purchase foreign products, and with our own manufacturing sector gone and no funds to restart it we would probably be looking at something similar to the great depression.
Is all that going to happen, probably not, for if the American economy goes down so does the world. But the sub-prime fiasco that the market is dealing with right now is only exacerbating the problem that Bush and the republicans created with their tax cut and spend policies. If things don't change significantly with the next president the above scenario may come to pass. I know a number of people that have moved their personal financial assets to foreign countries/currencies, and I've personally moved a percentage of my own. |
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supergirl
join:2007-03-20
Pensacola, FL
 ·Cox VOIP
·Skype
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·AT&T Southeast
·magicjack.com
| reply to Thaler
said by Thaler :said by mglunt :Hmm. Where might your evidence be of the economy tanking? I dunno about media outlets...but I take it as a bad sign when Canadians are now laughing at our money. Seems the only "cheap" place US citizens can go tour around is Mexico. Ick. A cheap dollar though make our exports much more attractive. If China would value its currency better, the dollar would be stronger.
--
Saving the world keeps me busy. However, I find Earth very primitive from my home planet of Krypton.
-Supergirl |
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Ahrenl
join:2004-10-26
North Andover, MA
·Verizon FIOS
| Actually it would be weaker.. the complaint is that China depresses the value of their currency, making ours artificially strong.
The value of the dollar is declines because the Fed continues to cut rates to sacrifice the future for the present. You could cut the rates to 0% and it's not going to save people with subprime rate resets. Regardless, until the currency markets think that the Fed is considering raising rates the value of the dollar will continue to decline. |
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Ahrenl
join:2004-10-26
North Andover, MA
·Verizon FIOS
| reply to rahvin112
The subprime "fiasco" has nothing to do with the government, except maybe when the fed cut rates too low which spurred "irrational excuberance" in the housing market casuing speculation and excessive risk taking. Since that was done by Greenspan, who was appointed by Reagan, maybe you should blame him instead.
As for the dollar losing its reserve status, it's not even possible right now. There just aren't enough assets/debt outside of the US for the money to go to. |
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mglunt
join:2001-09-10
Fredericksburg, VA
·Verizon FIOS
| reply to rahvin112
You say that "hourly wages haven't increased since 1997." I am sure you meant min wage, but you seem to be talking about both. If you know someone who began working a min wage job in 1997, and is still working the same job, and still making min wage, I'd like to see that. People might start out at min wage, but they get raises, etc.
Hourly income dropped 2 times in 2003 by a whole .01%. I don't call that significant up against the 116 times it has gone up in 10 yrs. »data.bls.gov/PDQ/servlet/SurveyO···net_1mth
Since 1970, the unemployment rate for the year has been lower than 4.7 a whole 4 times. Forgive me if I don't push the panic button since the rate went from 4.6 in Jul/Aug to 4.7 in Sept/Oct. It might simply indicate an increase in people looking for jobs for the holidays etc. |
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mglunt
join:2001-09-10
Fredericksburg, VA | reply to Ahrenl
The Fed just now cut rates twice in the last couple months after how many years of increases? |
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mglunt
join:2001-09-10
Fredericksburg, VA | reply to rahvin112
Where might you have proof of your statement that 80% of the new jobs added since Sept 03 are below the poverty line? |
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Ahrenl
join:2004-10-26
North Andover, MA | reply to mglunt
What's your point? |
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smokythebear
join:2004-07-13
30881
clubs:
| reply to rahvin112
Obviously I hope this situation does not happen, but it worries me alot. One thing that you didn't mention about the spending policy of the bush administration is that China is the majority buyer of US bonds. This should bother everyone...
Also with the whole social security problem and the possibility of crowding out things need to change |
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supergirl
join:2007-03-20
Pensacola, FL
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·AT&T Southeast
·magicjack.com
| reply to Ahrenl
said by Ahrenl :Actually it would be weaker.. the complaint is that China depresses the value of their currency, making ours artificially strong. The value of the dollar is declines because the Fed continues to cut rates to sacrifice the future for the present. You could cut the rates to 0% and it's not going to save people with subprime rate resets. Regardless, until the currency markets think that the Fed is considering raising rates the value of the dollar will continue to decline. No, the Chinese are artifically inflating the value of their currency over ours. It has been in the news as part of the trade deficit with China and even caused friction for several years now with the State Department. That news has been in BusinessWeek, USA Today, NY Times, and even FED reports.
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Saving the world keeps me busy. However, I find Earth very primitive from my home planet of Krypton.
-Supergirl |
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Ahrenl
join:2004-10-26
North Andover, MA
·Verizon FIOS
| I'm afraid you're incorrect. The Yaun is worth less than the Dollar, they have been depressing the value, previously by pegging it to the dollar, and more recently by using a black box floating method, that is only slightly not pegged to the dollar. It is still appreciating more slowly than all other currencies compared to the dollar.
Congress had been threatening to enact large tarriffs on all Chinese imports if they didn't allow their currency to appreciate, this would offset how inexpensive Chinese goods are because their currency is so weak. |
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