Comfort Zone Investing: If you think inflation is bad ...

Excellent article. I believe we will experience a period of deflation where prices for all goods including gas, food, housing, cars, TVs, and even school tuition come down. Demand simply will not be there. Consumers have no more confidence since they are constantly worrying about their jobs. But when will the economy bottom and begin a healthy recovery? Continue reading at: http://financial-cents.blogspot.com/2008/11/when-will-us-economy-and-stock-market.html

This seems like a description of the Hoover days, all thats liking is a national catastrophe. Just listening to friends and business associates, we are already in a depression. The excesses of this generation is unsustainable. We are all in a financial reaccesment mode at this time. The only way out of this is to have strong leaders, this unfortunately is what we are liking. Hopefully this won't turn into Obama days.

People making the goods will lose jobs? Since everything from poisonous baby formula to lead painted toys are manufactured in China I guess that wouldn't affect us too much and migt be a good thing...maybe it'll bring these jobs back here or maybe the execs who shipped the jobs there will only have to survive with a meager 1 or 2 million instead of 100 or 200 million

im buckling down .... if my job is secure, i will gladly unbuckle and spend again. just waiting for the majorial sureity that most of the nation knows that they will have jobs tomorrow and in a year from now.

I think the telling point of the article is we've seen some deflation with nowhere to go with interest rates. We're in a real pickle here and we're printing money like it's going out of style and deflation looming. It's like we're hyperinflating money and seeing deflation at the same time.

This all started when corporations in America started sending massive numbers of manufacturing jobs out of the country. It was perpetuated by our business universities teaching that technology jobs and service jobs would fill that vacuum. What they didn't take into account is that as technology advances fewer and fewer people are needed for the same amount of production and that service jobs paid no where near enough to sustain the current price structure of essentials. Therefore, it was inevitable that some deflation would occur as we're seeing now in housing.

Our own goverment brought this on us by the GREED of the ones we put in office . they let the banks rip us off with their intereset rates . Carter started this as he raised the interest rate from 6 per cet to as high as they thought it would go . and said it was to make people save money . What a fool , money has to keep moviing to keep the ball rolling . then the CEO

i guess they thought all the mexicans flipping burgers and mowing grass could sustain there lavish life styles.can anyone say slavery? i wish all the foreniers new how hard americans fought for a better stander of living they come here for better life but dont understand they have to fight for it they take the easy way out . instead of standing up in there own country they come here and bring ours down i hope they learn to stand up soon

What would our economy look like if we borrowed wisely, spent wisely and saved wisely? My guess is that it would not be the "robust" economy Americans have seen for many years but it would be healthy and sustaining.

Makes sense. Wait for cheaper (everything). We won't see the high levels of gas price next summer. The people spoke. (They just stopped buying) Also, they will not forget those 4.50/gal. prices. That's the problem. Try to convince somebody to spend now (even if that person is doing ok)

If I were two term President
Members of the board
The rescue package is taking its time through the Democratic system. All high risk investments are being deleveraged.

Present crises - Drop the Fed Fund rate to .5 or 0% for 6 months without draging your heels and this crises will pass over. Then please make sure our lending criteria is tight. Failure to act will wipe out billions/trillions dollars in the market place.
Mr. Chairman please do the bold thing. This will be far better than the bailout plan and will also protect the bailout plan if you reduce your rates immediately.

Thanks,

Jagdish Talwar
Concerned Citizen
During the past 2-3 decades the US Government has increasingly become a government of the special business interest instead of the Democracy it should be, a Government “of the people, by the people, and for the people”, Abraham Lincoln.

If we continue on this path we will undermine US democracy. Our democracy should benefit all it’s citizens and not just the corporations and rich and super rich people. As Ted Heath, former British Prime Minister said that we must get rid of the ugly side of capitalism or it will take our precious democracy.

As a citizen I love this country and as a people we have everything to keep this Nation strong and greatest nation in the world. I love this country and all citizens and permanent residents should respect its laws. If law is unjust or ill written we must change it under City, state or Federal laws. Politicians should not be allowed to change any existing laws.

My policies would benefit the entire nation and all its 300 million people and not just the privileged.

ECONOMY

US has a resilient economy but over the past 2 decades we have transferred our manufacturing jobs and some service jobs by outsourcing to countries where the labor component is less than the US. The resultant effect of this on our economy we are losing millions of jobs in the US and are creating large deficit on Balance of Trade payments. This is placing trillions of US dollars in the hands of surplus nations to buy our assets/funs our internal deficit. US dollar rate will continue to come under pressure and may tend towards 50% against the basket of currencies.

Our trade with other countries should be fair and balanced within a Margin of Error of 3-5%. Should surplus countries continue to exceed these limits the imports should be restricted or they open operations in US to manufacture goods and provide services. If we continue on the present path where other countries have huge surpluses then we are selling our country to foreign interests over a period of years which will further devalue our currency.

We as a Nation take other measures to bring in more automation to manufacture products here.

This will create millions of US jobs and restore the working middle class, which is gradually disappearing.

DEFENCE

Present Iraq and Afghanistan wars

Over the years as a super power we have been policing the world. Probably the time has arrived when we should take stock of our foreign policy. This is costing the treasury Billions of US dollars in deficit spending and adding to our National Debt.
Our future Defense policy should be based on that Defense is the best form of Offence. We should bring back all troops stationed in Japan , Korea, and Europe and just have rapid deployment special forces to deal with Terrorists. This should be done with other free nations of the world.

Withdraw all troops from Iraq within next 2 years and station a rapid deployment force in Kuwait until the Mid – East is more stable. This will form part of the rapid deployment force. We should not go into other countries and fight wars like the one in Iraq where US troops are involved in a Civil Strife between various religious groups. We have sacrificed our very best men and women in uniform and almost a trillion dollars.

The Peace process between Isreal and the Palistine has gone on for decades. This must be resolved by the world community within 2 years so that this region can prosper.

Our protection of mutual interests – oil and assisting our allies should be subject to approval by Congress. President should only wage war if we are attacked by nation state. It may also be best for US to do a referendum vote and need 60% approval for of the president to go to war.

There is so much to do at home and wasting our assets abroad does not make sense.

Managing the Financial World

The President, Federal Reserve and the Treasury some how individually or severally ignore the bubbles and excesses of wall street and large corporation. It is too late and very expensive to restore confidence after the event – case in point The Sub – Prime Crises. And 40 times leverage does not help.

Now nothing is being done about speculation in the commodities. To put a stop to this we should get rid of Casino futures markets. All futures should be limited to Producers and actual users and not the financial institutions and unregulated hedge funds. Users must take delivery of the commodity and be only permitted to sell their futre contract to another user only. If this was law you would see essential commodities fall in price. Oil futures for actual users will be about $70-75 range or less. Large pools of monies with hedge funds, sovereign nations, Pension Funds and rich individuals drive up essential commodities and in turn causes inflationary pressures.

Investors should invest in company stocks only and be allowed to trade in stock futures. Financial Institutions should not trade in high risk instruments without complete disclosures. We must not allow to create more super rich and rich people and destroy the middleclass in the US.

We must bring back usury laws to put an upper ceiling on rates paid by sub-prime and credit card borrowers. Banks Prime rate should be marked up 1.5% instead the 3.0%. Profits by financial Institutions should be realistic and not obscene.

Education

We must have private schools compete with the public ones and give parents vouchers to send their children to school of their choice. This competition will improve our schools and the increasing drop out rate will take an upward trend.
High school students who do drop out should be enrolled into vocational schools which teach skill sets for future employment and also have 20% educational instruction to support the vocation chosen.

Health Plans

We as a Nation must have affordable medicine available to everyone in this Country. We should explore the possibilities and have a comprehensible Health Plan. Preventive and urgent care clinics should be more readily available than just emergency rooms where cost to treating a person non – life threatening is astronomical. Little more out of the box thinking in this area.

Internal and External Deficit.

Balancing our internal Deficit. Congress and the President must not spend more than it takes in as taxes. This must be written into law – balance amendment. In good times we should pay 2% additional taxes to pay off our existing deficit.

Our increasing and accumulative balance of payments deficit must be addressed by fair and balanced trade or else other Large and small Nations with surplus balances will buy up and own US Assets and we will be able to exercise very little control on our future destiny.

Immigration

This is a hot button issue.

We as a Nation, must secure our borders our else we will continue to see this silent invasion of illegal immigrants. 12-15 Million people crossing over mainly from our Southern Border over a period of 2 decades should be stopped using all means at our disposal to control our borders.

Congress should give Employment VISA to all illegal immigrants for 5 years term. People must be sponsored by their employers for minimum 1 year and these Visas should be portable. After 5 years the visa holder should qualify for applying for Permanent Resident Status or renew the Visa for a further 5 year Period. Labor department must approve this as per needs of the various sectors of the economy. Once this is done we enforce our borders and fine employers who violate this law with hefty fines and if they do it again and again then shut the business.



Violent Crime

As a nation we must address this issue of domestic terrorism which costs thousands of lives every year

Finally other issues like gun control, Abortion and Drugs we as a nation must respect the existing laws and any changes must be by the will of the people.

We must look at our Democracy for a Decade and see what needs fixing – our schools, Health Care and infrastructure and do this on a fast track.

the end is near. unless the big devils. the in..surence co.,auto. drug co. start giving the little guy abrake . and the people who are killing this country aka the people we vote for stop stuffing there opockets. withe lobby money.

Exporting so many jobs to Asia was always a bad idea. Politicians pretend the global economy was unavoidable etc. Their lies about this enriched them and conscience-less companies that are happy to pay meager wages in overpopulated Asian lands etc. My opinion, any imports built with near-slave wages should be hit with huge tariffs by the US,Canada and other modern nations. This will mean modern nations will again produce their own tv sets, socks, bicycles etc.

we don't need the newest latest gadget,we the people can do without and need to continue spending less and be given our voice back that has been taken away by the greed of the few.

I think were headed for deep trouble, dot com investing and inflated real estate prices cant replace income generated from hard work. In other words get rich quick sceems never work in the long term. American need buckle down, live within her means, and get back to work!

WE KEEP HEARING THAT WE NEED TO CREATE NEW JOBS. WHAT HAPPENED TO THE OLD JOBS? THE JOBS THAT PAID US A LIVING WAGE. JOBS THAT PAID ENOUGH MONEY SO WE COULD RAISE AND EDUCATE OUR CHILDREN. JOBS THAT AFFORDED US THE OPPURTUNITY TO BUY A HOUSE AND PAY THE BILLS.OH. I FORGOT. REMEMBER NAFTA? THAT WAS NOT SUPPOSED TO AFFECT OUR ECONOMY. WE NEED TO BRING BACK THE OLD JOBS.

factories workers have been making less or staying the same over the past 15 years.But jobs suportted by tax payers have went up by a lot the past 15 years.factory worker are doing more for less money and jobs suported by taxpayers are doing less 2 people doing the work for 1 person they also have better benfits and retirement.A fireman or policeman retires after 30 years get a huge lumpsum payment at retirement and full pay with 3 percent cost of living for life.there will not be deflation with all of these goverment workers retireing.

Lookin for Boomtown...

"commitments such as a house or a car can be made with some certainty and with ample credit available" ...

The one factor not discussed is that corporations have mangled the concept of business contracts. How can a contract be legal if it is one-sided?

Since Verizon initiated it's punitive $175 cancellation fee, the contracts with business have pushed the envelope so they have all the rights and the consumers none.

So, the point is - until consumers have some security (fair business practices regulations) they cannot make investments.

Who can afford to sign a contract in which interests rates can be named in the future? I think this is one of the biggest problems facing the housing market. ARMs Adjustable Rate Mortgages made no sense for homeowners or investors.

Fair Basic Contract Law should be regulated and enforced. We now see what a corrupt political system can do by giving all the power to business and neglecting the rights of the people.

"WE NEED JOBS" If we have no Job now because of all the business curtailments or closeings, and have no prospects of getting a job, then how are we supposed to buy or get credit to buy? Back to school you say! This is not the answer in our later years of life. "We most need to be able to pay our bills, and keep our Health and Life Insurance coverage." We already have all these people, (young and older) that have graduated on their "government grant money" that still can't find work and are now on "government food stamps and medicade". WE NEED JOBS! To have buying power. We need to be able to suvrive with out government assistance. There is alot of power, and education in Washington. I would really like to see them all flex their muscell and brains into resolving these issues.