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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (22904)	12/6/2004 11:00:33 AM
From: Carlos Blanco	Respond to of 110194

salaries and contracts indexed to inflation rates (or denominated in other currencies) become the norm. You have to be in fantasyland to propose that. ggg Wages are declining and will continue to decline as long as we keep losing jobs to China and India bear in mind--i was referring to a context where strong inflationary conditions are widely recognized as such. that is not the case in the US currently. i'm not making a prediction about future or current conditions in the US, i'm referring to conditions that have historically existed and will develop in the context of nontrivial inflations. i do happen to believe that current policies where both the govt and its citizens are hugely in debt guarantee that the debt will be dealt by devaluation of the currency. also: note that wages and other values can decline in real terms, but not necessarily in nominal terms. in inflations, wages & values rise in nominal terms but typically decline in real terms, and that's how the population becomes poorer. there's nothing contradictory in saying that in order to keep people sated politicials will ensure that wages & values appear to rise while the standard of living in fact decreases. again, it's all politics, and has already happened in the housing market. people think they're getting richer because their house price rises, when at best they're standing still (i.e. their neighbor's house has gone up to the exact same extent) or slowly losing value in global purchasing power.