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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Mike Johnston who wrote (24354)	10/7/2004 1:22:07 AM
From: Amy J	Read Replies (1) \| Respond to of 306849

Mike, Excellent post ! Would love to hear Greenspan address all of your points. I think Congress has their collective heads in the sand, on this particular matter. He's certainly made US real estate cheaper for international people to buy, due to the decline of the USA dollar. Meanwhile, he's made USA people poorer, as you correctly pointed out. Regards, Amy J

To: Mike Johnston who wrote (24354)	10/7/2004 1:23:06 AM
From: Mike Johnston	Read Replies (2) \| Respond to of 306849

A Good quote from Economist article: In recent years, many people around the world have found it easier to make money from rising asset prices than from working. Roger Bootle, the managing director of Capital Economics, a London consultancy, calls this “money for nothing”. Now consider this: if one person gets something for nothing ( purchase of a product or service from real estate gains) then by definition the other person must get nothing for something (in this case a person(s) who made the product receive worthless currency for their labor) Now, who wants to be that second guy that gets nothing for something. Bottom line is you cannot expect your house to triple in value and have oil still sell for 25 bucks or a pizza still sell for 7 bucks. If it sells for 7 bucks its quality will certainly be lower, because it will be made by a lousy worker with no experience (the guy with experience wants to ride the wave of the bubble too, instead of toiling in the kitchen) Bottom line is. You will live in the more expensive house and "feel" richer but you will pay $3 a gallon for gas and will have a lousy neighborhood pizza. Also by definition: if something is free it is worthless. If the Fed wants to create the illusion of free money that money has to become worthless. That just tells you where the dollar is and where it is headed.

To: Mike Johnston who wrote (24354)	10/8/2004 1:17:38 AM
From: GraceZ	Respond to of 306849

If you are really interested in the flaw in the way productivity is measured, read what one of my associates sent to me a while back (while complaining about the way it was measured in a report on Canadian productivity) How can it be that a rise in hours worked means lower productivity? The two concepts aren't connected unless by productivity they really mean dollars of output per dollar of man hour input, but that isn't what impacts the only factor for productivity measurement, inflation. When new labor is added labor cost rises but only marginal productivity declines. Marginal cost of labor is higher than average cost of labor but that doesn't subtract from productivity but it does add to unit labor cost. Rising unit labor cost can add to inflation but only if net income is rising. As I've mentioned before the problem with the way they measure productivity resides in their two state model. They use two variables, output dollars and input hours, when there are actually four eigenvectors, output units, change in output units, input man times hours, change in man times hours: U x dU/dt / (MT x d(MT)/dt)