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A Point Of Equilibrium, Where Increase Helps Nothing?

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Peak wage relative to costs where inflation is pushing up wages which pushes up costs which pushes up wages which erodes debt the spiral continues, eventually we take on more debt as it becomes affordable then we get to peak debt, all along we are at peak tax, but at what point are we at peak wage relative to cost, where an increase in a wage has no significance at all as costs increase so offsets any benefit in an increase in wages.............

There must be a point where this takes place, also when factoring in rising debt servicing costs through base rate rises.................Due to wage increase so also offsets any benefit to a wage rise. At what point in time where we at peak wealth, where wage had peak power relative to costs?

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Peak wage relative to costs where inflation is pushing up wages which pushes up costs which pushes up wages which erodes debt the spiral continues, eventually we take on more debt as it becomes affordable then we get to peak debt, all along we are at peak tax, but at what point are we at peak wage relative to cost, where an increase in a wage has no significance at all as costs increase so offsets any benefit in an increase in wages.............

There must be a point where this takes place, also when factoring in rising debt servicing costs through base rate rises.................Due to wage increase so also offsets any benefit to a wage rise. At what point in time where we at peak wealth, where wage had peak power relative to costs?

Since money is the final abstract representation of all the work done by man and since all the work done by man is the economic representation of all of the resources consumed by man and since the most critical resource of all is hydrocarbon energy and since we have already reached the peak of production in the most important supply of this most critical resource (crude oil), we have already hit peak monetary wealth.

It's downhill from now on in, no matter what games we play with the money "supply"

Edited by tallguy

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Do you really benefit from a wage rise, with costs rising in line?

Australia, benefitting from the resource boom, yes, but are they, the cost of living out there is so high relative to a mormal wage, they are raising rates to fight inflation, costs are rising, wages lag, servicing debt becomes more expensive, and they have come out better than us?

Surely low wage inflation is better, costs will rise, but are we really in that worse a situation, because as soon as the debt again becomes low, the boom goes again. Are we approaching an endgame where, where there's no risk there's no yield, where's there's risk there's yield, but you will probably lose capital, i.e. stocks, shares, houses, commodities? Is the system now at a point of peak debt, so peak servicability, so low yields, is there anywhere else to go apart from long term stagnation, similar to Japan?

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Do you really benefit from a wage rise, with costs rising in line?

Australia, benefitting from the resource boom, yes, but are they, the cost of living out there is so high relative to a mormal wage, they are raising rates to fight inflation, costs are rising, wages lag, servicing debt becomes more expensive, and they have come out better than us?

Surely low wage inflation is better, costs will rise, but are we really in that worse a situation, because as soon as the debt again becomes low, the boom goes again. Are we approaching an endgame where, where there's no risk there's no yield, where's there's risk there's yield, but you will probably lose capital, i.e. stocks, shares, houses, commodities? Is the system now at a point of peak debt, so peak servicability, so low yields, is there anywhere else to go apart from long term stagnation, similar to Japan?

no

Long term stagnation is what we will get at best.

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no

Long term stagnation is what we will get at best.

This si what they are aiming for at best, long term nothing.............Anything else has all sorts of implications

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Since money is the final abstract representation of all the work done by man

No it isn't. If that were true maybe you'd like to explain why a ton of gold isn't the same price as a ton of lead since the same amount of labour went into both. Marx certainly couldn't.

and since all the work done by man is the economic representation of all of the resources consumed by man

No it isn't. Money is a representation of value and all value is utility. Oil, uranium, rare earths etc were all useless to ancient man and so valueless, with knowledge the compass of what is a 'resource' has expanded exponentially.

and since the most critical resource of all is hydrocarbon energy and since we have already reached the peak of production in the most important supply of this most critical resource (crude oil), we have already hit peak monetary wealth.

It's downhill from now on in, no matter what games we play with the money "supply"

Who says oil is the most important resource in the whole of human history? We've already reached and passed peak whale oil which is what early and pre-industrial civilisation ran on. Did that collapse, then? Of course not, technology intervened yet again. More resources are on the horizon, salt water, sunlight, fission, GM food and the safer bet is that it will again make monkeys of Malthusian fools.

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Agreed. Although I would add that it's ownly downhill from the viewpoint of (the majority) those wishing to maintain uber materialistic lifestyles filled with gadgets, gizzmos and plastic crap from the orient.

yep.

Those who learn earlier to live more frugally will be hit the least and the latest

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Taking two people both earning £35k pa working and living locally....one will feel very comfortable can live well and save, the other will overspend and overborrow...so what you earn has little relation to your contentment and surplus funds. ;)

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No it isn't. If that were true maybe you'd like to explain why a ton of gold isn't the same price as a ton of lead since the same amount of labour went into both. Marx certainly couldn't.

Because gold has been used a money or, at the very least, a universally exchangable store of wealth and so has a particular and special utility. How much something is priced at is not simply a function of it's mass yopu plonker. It's a function of how much people want it and why. That's why a ton of air is not worth a ton of gold.

No it isn't. Money is a representation of value and all value is utility. Oil, uranium, rare earths etc were all useless to ancient man and so valueless, with knowledge the compass of what is a 'resource' has expanded exponentially.

Again, you make the facile point that unless people want something it will have no value. No sh*t sherlock. None of this undermines what I have said. you know this if you actually read and understood it properly instead of merely regurgitating your own predjucices like some kind of psychological tick.

Who says oil is the most important resource in the whole of human history? We've already reached and passed peak whale oil which is what early and pre-industrial civilisation ran on. Did that collapse, then? Of course not, technology intervened yet again. More resources are on the horizon, salt water, sunlight, fission, GM food and the safer bet is that it will again make monkeys of Malthusian fools.

Again, where did I say that oil is the most important resource in human history? It is, however the most impoprtant resource in a global industrial civilisation of 7 billion at the front end of the twenty first century. If you knew even the first thing about how much energy is used to support our civilisation's systems you would know this, irrespective of whether or not you considered that we had passeed the peak of it's production.

I could go on here to educate you about energy including EROEI, speed of flow, absolute supply etc. But, to be honest, I've engaged with plonkers like you too many times. It's pretty pointless and i have better things to do with my time than waste it on you.

Edited by tallguy

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Peak wage relative to costs where inflation is pushing up wages which pushes up costs which pushes up wages which erodes debt the spiral continues, eventually we take on more debt as it becomes affordable then we get to peak debt, all along we are at peak tax, but at what point are we at peak wage relative to cost, where an increase in a wage has no significance at all as costs increase so offsets any benefit in an increase in wages.............

what you have missed is that demand is almost infinitely elastic so if costs go up people will buy less crap they don't need.

consumers do not need to tolerate rising costs created by ex bond holders speculating on commodities to bid them up and extract rent from consumers, because they can just stop spending which will destroy the value of the investments made by commodity speculators, and as long as the central bank ensures that these speculators are not accommodated in risk free government bonds when consumers stop spending then the money of the speculators will end up in consumers pockets.

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No it isn't. If that were true maybe you'd like to explain why a ton of gold isn't the same price as a ton of lead since the same amount of labour went into both. Marx certainly couldn't.

Lead isn't as nice a colour and although I have had lead poisoning I have never even heard of gold poisoning.

We have devalued our currency the excuse being to make our exports cheaper. If we then inflate wages our goods will cost more to produce, so won't be any cheaper to export. All that will be achieved is that those getting the largest wage increases (e.g. FTSE bosses 55% last year) will be better off at the expense of those that don't get large wage increases. It's a pity we cannot disconnect our thieving politicians from big business isn't it?

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Because gold has been used a money or, at the very least, a universally exchangable store of wealth and so has a particular and special utility. How much something is priced at is not simply a function of it's mass yopu plonker. It's a function of how much people want it and why. That's why a ton of air is not worth a ton of gold.

This neatly encapsulates your confusion. You concede that value is only perceived value, yet apparently…

money is the final abstract representation of all the work done by man

Which is it then? Either value is intrinsic to the cost of a thing's production, or it is extrinsic to it and only what the consumer of that thing thinks it is. It can't be both. And btw two distinct schools of economics hinge on this point, so hardly a facile one. But I realise such a point would escape a bar-room sophist such as yourself.

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When a wage rises the rich get poorer, so by allowing wage inflation to erode debt will erode wealth, the point we are at now is near zero yield, and peak assett cost is peak wealth for the rich and peak debt levels for the servicers of the debt, this is why the spike in commodities is just a spike, and will collapse, as the speculation and hoarding cannot continue without famine, riots and possibly war...........

Edited by Panda

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......inflation is pushing up wages which pushes up costs which pushes up wages which erodes debt .....

Sorry, didn't really concentrate on the rest of your observation.

The first bit happened in the 1970's; mortgages were rendered insignificant by wages chasing up inflation.

This is unlikely to happen again in our lifetimes.

The background was comparatively high employment with strong unions. Unless there is a shortage of labour, wage rises

do not just happen, however "unfair" that might be.

As a frugal steward, storeman and semi-skilled machinist my father bought and paid for a largeish 3 bedroomed detached house

through the sixties and seventies, based on a 30% deposit of joint savings, and pretty much one wage.

He was thoroughly working class, but no proletarian. The nation is waist deep in proles now, many of them actually believe they are middle class :lol:

So, no full employment, no organised labour, no wage rises.

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No it isn't. If that were true maybe you'd like to explain why a ton of gold isn't the same price as a ton of lead since the same amount of labour went into both. Marx certainly couldn't.

A ton of lead is much easier to find and mine than a ton of gold.

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Sorry, didn't really concentrate on the rest of your observation.

The first bit happened in the 1970's; mortgages were rendered insignificant by wages chasing up inflation.

This is unlikely to happen again in our lifetimes.

The background was comparatively high employment with strong unions. Unless there is a shortage of labour, wage rises

do not just happen, however "unfair" that might be.

As a frugal steward, storeman and semi-skilled machinist my father bought and paid for a largeish 3 bedroomed detached house

through the sixties and seventies, based on a 30% deposit of joint savings, and pretty much one wage.

He was thoroughly working class, but no proletarian. The nation is waist deep in proles now, many of them actually believe they are middle class :lol:

So, no full employment, no organised labour, no wage rises.

Totally agree, see my other posts, we will NOT see massive wage inflation, faltering demand, stocks falling, commodities falling, HOUSES falling, this depression has some legs yet............

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We have devalued our currency the excuse being to make our exports cheaper. If we then inflate wages our goods will cost more to produce, so won't be any cheaper to export. All that will be achieved is that those getting the largest wage increases (e.g. FTSE bosses 55% last year) will be better off at the expense of those that don't get large wage increases. It's a pity we cannot disconnect our thieving politicians from big business isn't it?

No, wage rises lag cost of living rises which in turn lag printing.

The overall effect is that workers get less in real terms, hence the business is more competitive for exports.

Of course, this assumes that a large cost component of the goods is down to worker costs and the chances of being competitive with third world slave economies any time soon, even with debasement, is negligible.

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No, wage rises lag cost of living rises which in turn lag printing.

The overall effect is that workers get less in real terms, hence the business is more competitive for exports.

Of course, this assumes that a large cost component of the goods is down to worker costs and the chances of being competitive with third world slave economies any time soon, even with debasement, is negligible.

I agree with your first line and the first part of the second line.

I am not convinced about the end of the second line. Doesn't it depend how much the bosses are creaming off? If we have devalued 20% against another currency but bosses are taking 55%+ pay rises - then that has to filter through to prices. If their prices go up 20% or more why would a foreigner think our goods are more competitively priced than those from a country that hasn't devalued? For our goods to look that devalued 20% cheaper we need costs and prices to stay the same don't we?

Hence the devaluing has merely impoverished averagely paid workers in real terms and just put more money into the hands of those in charge?

Don't say the average workers would be out of a job without the devaluing because the point is the greed of bosses raking in 55% average pay rises, instead of keeping wages down, prices down and selling more goods which would create more jobs.

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I agree with your first line and the first part of the second line.

I am not convinced about the end of the second line. Doesn't it depend how much the bosses are creaming off? If we have devalued 20% against another currency but bosses are taking 55%+ pay rises - then that has to filter through to prices. If their prices go up 20% or more why would a foreigner think our goods are more competitively priced than those from a country that hasn't devalued? For our goods to look that devalued 20% cheaper we need costs and prices to stay the same don't we?

Hence the devaluing has merely impoverished averagely paid workers in real terms and just put more money into the hands of those in charge?

Don't say the average workers would be out of a job without the devaluing because the point is the greed of bosses raking in 55% average pay rises, instead of keeping wages down, prices down and selling more goods which would create more jobs.

Costs go up, costs are going up due to the commodity spike/bubble/chasing profit, these costs are offset by falling or stagnating wages and a devalued currency. The devalued currency is supposed to be keeping people in jobs, and help offset the rising raw material costs.

Should we start to see wage inflation adding to a business cost, this cannot be passed onto the customer as we will again become uncompetitive relative to the low wage slave economies. So for this to work, wages have to stagnate, even fall, it is a race to the bottom for wages in this coutry for the whole ponzi debt mountain to reignite.

Should wages take off, then this will lead to an even greater jump in costs, as rising wages will pull prices, so we get an upward spiral one chasing the other, and then we really are stuffed globally, thats why we will not see a massive jump in wages, they will stagnate even fall.

Debt will linger, for longer the system will not get flushed through hyper wage settlements

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  • 261 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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