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

To: Elroy Jetson who wrote (25898)	12/14/2004 1:47:32 AM
From: GraceZ	Read Replies (2) \| Respond to of 306849

You are calling me a Socialist because I think neither deflation nor inflation at a high rate is very conducive for investment? What does a high rate of inflation or a high rate of deflation have to do with what you are referring to as capitalism? Both environments reduce the incentive for those with large amounts of capital to put it into risk, on this, history is clear. People like yourself who have limited natural access to capital, other than marrying well, have many opportunities under a capitalist system: a.) You can save capital from your wages, not so difficult if persons with capital find your work as useful as you imagine it to be; b.) You can bring in a person with capital as a partner or investor; c.) You can obtain loans from banks, although these would be more costly and the lending requirements more strict than under Socialist Monetarism. In Capitalist systems banks normally operate as Merchant Banks where they insist on being given an equity stake in your investment in addition to interest. I didn't marry my capital, borrow it or bring in a partner. I created it. My primary capital was knowledge and skill. I started my biz with a $100 enlarger someone was throwing out and funded the subsequent expansion with retained earnings using that original piece of equipment and my own know how. The Fed had made such a mess of the economy in the late 70s that inflation was running around 10-12%, borrowing in the 22% range, it wasn't possible to borrow money from a bank to create a business like mine. We were in the middle of an inflationary depression! I did, at times, get deposits from clients to cover expenses on jobs I was contracted for, which is not unusual for a biz like mine. I don't consider such as loans. Later when I had no need or desire to borrow, the banks wanted to lend me money, partners appeared wanting to buy in and even potential husbands with capital showed up.

To: Elroy Jetson who wrote (25898)	12/14/2004 2:38:55 AM
From: Mike Johnston	Respond to of 306849

You are correct. Current economic system in the US is a form of socialism. You call it "Socialist Monetarism" . I call it "the economy that is not based on free market". It is amazing how current environment in respect to the real estate bubble is similar to a socialist economy in Eastern Europe 20-30 years ago: high inflation, shortages of housing, 10 year waiting periods for affordable housing, corruption , difficulty getting building materials, hoarding, fraud, increased government bureacracy, favoritism, bribery, shoddy workmanship and low quality of construction, people camping out for days to buy housing etc. Of course in a true socialist economy all aspects and industries in the economy had above characteristics and not just housing industry.