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And for all the people that complain 'but the prices will go up', yes they will in the short term. But don't underestimate how quickly it would be for the fact

And for all the people that complain 'but the prices will go up', yes they will in the short term. But don't underestimate how quickly it would be for the factories owned by multinationals to move out of China to even cheaper countries like Vietnam or India, or move back to US to cheap states via robot factories. Prices will go back down to equilibrium soon.

api 9y ago
Rising prices would be good if (and only if) they caused increased wages or employment. We need a lot of wage inflation to reprice the economy so that real estate, college, etc. are reasonable again. Either that or those things need to fall, but that's usually more painful.
- connectclass 9y ago
  wage inflation will happen soon enough. there a flood of money flowing back to US (from emerging countries) due to global instability, repatriation tax decrease, tariffs, default risks in emerging countries, and increasing interest rate. alot of money are flowing into the cheaper states in US besides just California and New York. Fed Says U.S. Labor Market Near or Beyond Full Employment U.S. labor market tightening, inflation gaining steam https://www.bloomberg.com/news/articles/2018-02-23/fed-says-u-s-labor-market-near-or-beyond-full-employment https://www.bloomberg.com/news/articles/2018-02-23/fed-says-...
  - api 9y ago
    It's a bit scary but if you look at house prices vs median income in most cities you'd need at least 2X-3X inflation to fix the discrepancy. We may well see early 80s inflation soon. Houses and rent will be reasonable again. A loaf of bread will cost $12.
    - connectclass 9y ago
      that's ok, US is aiming to be carb free and protein rich
  - existencebox 9y ago
    Is this really the whole story? To be honest, I haven't gotten the read that "money is flowing back into the US". a few points. - Repatriation is one time. We will likely continue to run a deficit, tariffs aside. - I'm seeing increasing news that ex-us investing is being favored[0], and that some of our largest purchasers of treasury bonds are considering scaling back[1]. Meanwhile, the EU has been pushing more and more for ways to get "their cut" via taxes and fines, although long-term impact of this is largely TBD. - Although you link re: low unemployment (accurately) this only tells half the story, as labor participation rate continues to be heavily depressed. (~61%) [2]. - Finally, I'd also like to rebutt the "money flowing into cheaper states" but am having a hard time finding articles on the data I'd want, namely that most of the investing I had heard was in low-employment highly-automated factories and datacenters. (From a purely logical standpoint, the hiring advantages in a high tech economy of concentrations of workers isn't going away any time soon, and housing prices, despite tax changes, seem to align with this, although that may take a while to see a shift) I could certainly reinforce the assertion that poor states aren't in a great situation by the trend of needing to cut back to 4 days of school in some places [3] (A topic I'm surprised hasn't gotten more attention on its own, tbh) I think my takeaway from this would be that I'm not so confident we'll see wage inflation, at least not _nearly_ to the level to which housing is escalating. It'd depend on a ton of factors, including population concentration, wage vs housing increases, employment changes, and black swan events, so obviously I can't make a holistic statement, but the points I list above make me much more pessimistic that the environment we've seen over the last 20~ years will likely continue, including the long-term crash-based financial cycle. [0] https://www.reuters.com/article/us-usa-stocks-weekahead/globalists-buck-u-s-index-fund-trend-idUSKBN1GZ1GS https://www.reuters.com/article/us-usa-stocks-weekahead/glob... [1] https://www.bloomberg.com/news/articles/2018-01-10/china-officials-are-said-to-view-treasuries-as-less-attractive https://www.bloomberg.com/news/articles/2018-01-10/china-off... [2] https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 [3] http://www.foxnews.com/us/2017/03/22/schools-in-rural-areas-shifting-toward-4-day-week.html http://www.foxnews.com/us/2017/03/22/schools-in-rural-areas-...

api 9y ago

Rising prices would be good if (and only if) they caused increased wages or employment. We need a lot of wage inflation to reprice the economy so that real estate, college, etc. are reasonable again. Either that or those things need to fall, but that's usually more painful.

connectclass 9y ago
wage inflation will happen soon enough. there a flood of money flowing back to US (from emerging countries) due to global instability, repatriation tax decrease, tariffs, default risks in emerging countries, and increasing interest rate. alot of money are flowing into the cheaper states in US besides just California and New York. Fed Says U.S. Labor Market Near or Beyond Full Employment U.S. labor market tightening, inflation gaining steam https://www.bloomberg.com/news/articles/2018-02-23/fed-says-u-s-labor-market-near-or-beyond-full-employment https://www.bloomberg.com/news/articles/2018-02-23/fed-says-...
- api 9y ago
  It's a bit scary but if you look at house prices vs median income in most cities you'd need at least 2X-3X inflation to fix the discrepancy. We may well see early 80s inflation soon. Houses and rent will be reasonable again. A loaf of bread will cost $12.
  - connectclass 9y ago
    that's ok, US is aiming to be carb free and protein rich
- existencebox 9y ago
  Is this really the whole story? To be honest, I haven't gotten the read that "money is flowing back into the US". a few points. - Repatriation is one time. We will likely continue to run a deficit, tariffs aside. - I'm seeing increasing news that ex-us investing is being favored[0], and that some of our largest purchasers of treasury bonds are considering scaling back[1]. Meanwhile, the EU has been pushing more and more for ways to get "their cut" via taxes and fines, although long-term impact of this is largely TBD. - Although you link re: low unemployment (accurately) this only tells half the story, as labor participation rate continues to be heavily depressed. (~61%) [2]. - Finally, I'd also like to rebutt the "money flowing into cheaper states" but am having a hard time finding articles on the data I'd want, namely that most of the investing I had heard was in low-employment highly-automated factories and datacenters. (From a purely logical standpoint, the hiring advantages in a high tech economy of concentrations of workers isn't going away any time soon, and housing prices, despite tax changes, seem to align with this, although that may take a while to see a shift) I could certainly reinforce the assertion that poor states aren't in a great situation by the trend of needing to cut back to 4 days of school in some places [3] (A topic I'm surprised hasn't gotten more attention on its own, tbh) I think my takeaway from this would be that I'm not so confident we'll see wage inflation, at least not _nearly_ to the level to which housing is escalating. It'd depend on a ton of factors, including population concentration, wage vs housing increases, employment changes, and black swan events, so obviously I can't make a holistic statement, but the points I list above make me much more pessimistic that the environment we've seen over the last 20~ years will likely continue, including the long-term crash-based financial cycle. [0] https://www.reuters.com/article/us-usa-stocks-weekahead/globalists-buck-u-s-index-fund-trend-idUSKBN1GZ1GS https://www.reuters.com/article/us-usa-stocks-weekahead/glob... [1] https://www.bloomberg.com/news/articles/2018-01-10/china-officials-are-said-to-view-treasuries-as-less-attractive https://www.bloomberg.com/news/articles/2018-01-10/china-off... [2] https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 [3] http://www.foxnews.com/us/2017/03/22/schools-in-rural-areas-shifting-toward-4-day-week.html http://www.foxnews.com/us/2017/03/22/schools-in-rural-areas-...