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ken_ichikawa

Middle Class America Is No More!

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Middle class America becoming extinct!

http://www.nypost.co...hT3ZnUCH7vh4L/0

M shaped society coming to a country near you! (note most Asian countries already are M shaped societies)

http://en.wikipedia....M-shape_Society

Well, those 80% of people now on the bottom rung (that is starting to creak BTW) will just have to 'stop whining and stuck it in!' as dear old multi-billionaire 'bailoutee' Charlie Munger would say.

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I see a problem- who buys all the stuff? And if nobody does, how long do the wealthy minority stay wealthy?

It seems to me that the top of the hierarchy are vulnerable to a gutted consumer society to the degree that their 'wealth' consists mostly of signposts pointing toward an extinct way of life.

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I see a problem- who buys all the stuff? And if nobody does, how long do the wealthy minority stay wealthy?

It seems to me that the top of the hierarchy are vulnerable to a gutted consumer society to the degree that their 'wealth' consists mostly of signposts pointing toward an extinct way of life.

This is exactly what is headed this way.

All that matters for those at the top of the pile is that they remain at the top of the pile, no matter how shrunken it becomes.

Unless we, the people, force a different outcome

Edited by tallguy

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I see a problem- who buys all the stuff? And if nobody does, how long do the wealthy minority stay wealthy?

It seems to me that the top of the hierarchy are vulnerable to a gutted consumer society to the degree that their 'wealth' consists mostly of signposts pointing toward an extinct way of life.

There are only two possible outcomes :

- Deflation so that things are affordable based on what people earn rather than what they can borrow. There will be a massive destruction of accumulated financial assets as bonds etc will be worth very little.

- Inflation via a "nuclear option" for QE where every household is given $250k to wipe the slate clean and start over.

The pace of these two possible outcomes will be slow at first and then really quick. We are currently in the phoney war stage.

The wealthy will probably become even more wealthy in proportional terms even if either their real or nominal wealth falls dramatically.

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"already" M shaped?

M shaped societies are the norm in human history.

better we should ask how the middle class ever came about.

Capitalism

The scientific method

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There are only two possible outcomes :

- Deflation so that things are affordable based on what people earn rather than what they can borrow. There will be a massive destruction of accumulated financial assets as bonds etc will be worth very little.

- Inflation via a "nuclear option" for QE where every household is given $250k to wipe the slate clean and start over.

The pace of these two possible outcomes will be slow at first and then really quick. We are currently in the phoney war stage.

The wealthy will probably become even more wealthy in proportional terms even if either their real or nominal wealth falls dramatically.

I would go slightly futher on this:

In a hyperinflationary scenareo, those holding the actual physical means of production (land and other raw resources) are absolutely fine, thank you very much. They just get paid more for their stuff as a compensation for money being worth less

Hyperinflation changes nothing for them. The uber-rich in other words.

As for the rest of us who have to rely on wothless paper promises paid to us once a month in return for selling most of our lives away?

Obviously, we're f*cked

In the alternative hyper-defaltionary scenareo those holding the actual physical means of production (land and other raw resources) are absolutely fine, thank you very much. Although they get paid less for their stuff, this doens't matter since money becomes worth far more.

Hyper-deflation changes nothing for them. The uber-rich in other words.

As for the rest of us who have to rely on a massively reduced supply of paper promises paid to us once a month in return for selling most of our lives away?

Obviously, we're f*cked

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I would go slightly futher on this:

In a hyperinflationary scenareo, those holding the actual physical means of production (land and other raw resources) are absolutely fine, thank you very much. They just get paid more for their stuff as a compensation for money being worth less

Hyperinflation changes nothing for them. The uber-rich in other words.

As for the rest of us who have to rely on wothless paper promises paid to us once a month in return for selling most of our lives away?

Obviously, we're f*cked

In the alternative hyper-defaltionary scenareo those holding the actual physical means of production (land and other raw resources) are absolutely fine, thank you very much. Although they get paid less for their stuff, this doens't matter since money becomes worth far more.

Hyper-deflation changes nothing for them. The uber-rich in other words.

As for the rest of us who have to rely on a massively reduced supply of paper promises paid to us once a month in return for selling most of our lives away?

Obviously, we're f*cked

You put it much better than I did. Thank you.

If I could, I would also like to add a little addendum about debt.

Obviously, in a deflationary environment, debt will destroy leveraged, accumulated wealth.

Less obviously, in an inflationary environment, debt has the potential to destroy leveraged, accumulated wealth during the transition period if debt service costs exceed income for long enough before the stage is reached where debt can be repaid with a pair of dirty, old socks.

These are the reasons that truly wealthy people eschew debt. People trying to become wealthy embrace debt. Some will succeed, others will fail.

Defining wealth is a difficult thing. One definition might be the ability to survive in an environment where it is impossible to borrow at any price.

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You put it much better than I did. Thank you.

If I could, I would also like to add a little addendum about debt.

Obviously, in a deflationary environment, debt will destroy leveraged, accumulated wealth.

Less obviously, in an inflationary environment, debt has the potential to destroy leveraged, accumulated wealth during the transition period if debt service costs exceed income for long enough before the stage is reached where debt can be repaid with a pair of dirty, old socks.

These are the reasons that truly wealthy people eschew debt. People trying to become wealthy embrace debt. Some will succeed, others will fail.

Defining wealth is a difficult thing. One definition might be the ability to survive in an environment where it is impossible to borrow at any price.

Yes

This is exactly what real wealth is.

Eveything else is illusory. For some that illusion can last a lifetime. At least until and unless a crisis ensues. At which point the real wealth becomes only too apparent.

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I would go slightly futher on this:

In a hyperinflationary scenareo, those holding the actual physical means of production (land and other raw resources) are absolutely fine, thank you very much. They just get paid more for their stuff as a compensation for money being worth less

Hyperinflation changes nothing for them. The uber-rich in other words.

As for the rest of us who have to rely on wothless paper promises paid to us once a month in return for selling most of our lives away?

Obviously, we're f*cked

In the alternative hyper-defaltionary scenareo those holding the actual physical means of production (land and other raw resources) are absolutely fine, thank you very much. Although they get paid less for their stuff, this doens't matter since money becomes worth far more.

Hyper-deflation changes nothing for them. The uber-rich in other words.

As for the rest of us who have to rely on a massively reduced supply of paper promises paid to us once a month in return for selling most of our lives away?

Obviously, we're f*cked

You've forgotten the curve ball.

The uber-rich are fine providing they avoid revolution, if they don't they may end up on lamp posts.

However political revolution doesn't always guarantee they are fooked as if they are really good they'll just switch allegiance to the new political elite as in Germany when Hitler came to power where uber rich once more seemed to do OK.

But generally the masses are fooked.

Edited by interestrateripoff

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This is exactly what is headed this way.

All that matters for those at the top of the pile is that they remain at the top of the pile, no matter how shrunken it becomes.

the hollow ziggurat!

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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