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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: 8bits who wrote (77890)	4/17/2008 7:18:47 PM
From: Elroy Jetson	Respond to of 116555

Trying to confuse me with facts, huh. It looks like my nominal price recall was off.

To: 8bits who wrote (77890)	4/17/2008 9:55:30 PM
From: SouthFloridaGuy	Respond to of 116555

You smartly caveat in "nominal" terms. Of course nominal GDP growth, wage growth, etc. was also quite strong in the 70's. Nominal wealth also increased significantly in the 70's. Now of course inflation was rampant, ravaging real price gains on many assets, but nobody ever experienced losses on leveraged assets over longer periods of time. Fast forward today: Wage Growth: Nope GDP Growth: Nope Household Wealth Gains: Nope Food and Energy: YUP! Leveraged Losses: YUP! The fact is we're just getting poorer. Wealth falls in absolute terms, costs rise in absolute terms. At least the Japanese had falling commodity costs during their deflation due to strict global monetary policy (this is what catalyzed the EM crises, IMO). We don't even have that. Plan accordingly.