Food & oil costs affect all people, the housing bubble only affects those who were unwise in their finances. The Fed must at lease hold interest rates, not lower them, to get commodity prices and market speculators to act rationally.
This is, of course, what you get when trickle down comes to town. It isn’t MONEY that trickles down. What worries me more immediately is the cost of food. That is because it is what keeps us alive. The cost of homes has always been hard, but we can double and triple up with families under one roof like during the Depression to survive. You can’t make water into wine or multiply loaves and fishes, so food must come first.
The nation is reaping what it has sewn with the Reagan revolution. This is the outcome. Read all about the Powell Memo (Nixon’s “Powell”) to understand how this happened.
http://www.mediatransparency.org/story.php?storyID=22
As long as we have this administration of losers sitting around, lining their pockets with oil industry lobbyist payouts, nothing is going to get fixed. News flash to everyone, BIG OIL OWNS THE U.S. GOVERNMENT. There isn’t a decent alternative energy program because it’s not in congress and the administration’s best interest, THEIR OWN!
ENOUGH WITH THE CUTS ALREADY! Bernanke should listen to mounting criticism and STOP cutting rates. The Fed’s job is ALSO to worry about inflation! What are consumers who are mired in debt supposed to do with rising food and fuel prices! Are we going to have food riots in this country too? To Bernanke and others in the Fed with itchy feet for another rate cut, take heed of the following Ethipian saying: “The foot that is resless will tread on a turd.”
I am more concerned about food and fuel prices. I rent and am hoping homes go down alot more so I can buy really cheap
Gee Ulrich, (from Switzerland) just who do you think buys the bulk of exports from YOUR country (and the rest of the world)? If America loses it’s buying power, you can BET that you are going to be in trouble!
The rising food and energy cost affect EVERYONE. The falling housing prices are affcting those that purchased a house beyond their means, as well as lived on home equity beyond their means and those with a ARM.
At some point the rising energy and food are going to begin to affect the family budgets of those who have a fixed mortage rate. At some point people are going to be faced with the decision of taking kids out private school (let’s face it public school is not up to the task of education our children a completely seperate topic), keep heat/electricity on, and paying for gas to get to work (since most of us are driving more than before to get to and from work).
The storm is coming. Prepare yourselves.
Energy independence is key to our survival.
Manufacturing won’t save us.
Technology won’t save us.
A government facilitated alternative energy development plan, coupled with a revenue neutral carbon tax to help both combat global warming and fend off the baby boomer social security timebomb, may be the most effective route to follow.
My main concern is the increasing food and energy costs more than the housing crisis.
It just gets me worked up to hear the politicians say day after day, year after year, we have to fix this and fix that, yet nothing ever seems to get done, which in my opinion has help led us into this current mess. Everyone is too busy complaining about the situation and making suggestions on how to correct them, but not taking any real useful action.
My favorite comment I heard the other day by a politician was that small town individuals, which I am one, have been effectively forgotten, economically speaking, for the last 20+ years, so it begs to question,
Since all the candidates are career politicians and therefore a part of the current mess, are any of them really the answer to fix these problems, despite what they claim?
No bailouts! INFLATION IS ALL THAT MATTERS!
Bailing the F##ked up financial system that got us into this mess is sick. It is a transfer of wealth from struggling Americans to those least needing or deserving of help.
Does the fed exist to serve the public or bailout bankers? Because, at the current rate, by the time it “saves the financial system”, most of us will be living in relative poverty as the dollar becomes worthless.
Free Hemp! Free Enterprise! Free America!
People are starting to catch on as it hits their pocketbook…basic foods are getting more expensive. Corn for Fuel?
Promote the freedom of Industrial Hemp and watch the free market make a boom out of it. Fuel, cloth, paper, fine machine oil, etc. Come on.. stop this foolishness!
In order to help the average American, the Fed should raise interest rates to encourage savings and attract buyers to US bonds. That would boost the dollar, thus lowing the cost of oil and imported food. Congress should eliminate taxes on savings, balance the budget, and put huge R&D into clean renewables. But it won’t. Congress no longer represents us. It’s been bought and sold to the oil lobby, the big banks, and foreign nations. The leadership is so corrupt that we are all in trouble now. The Treasury will try to print its way out of this, futher fueling inflation. That was tried before — by the Weimar Rebulik (Germany in the 1920s and 30s). The average guy and family will starve. But it will make it easier for the big banks to pay of their debt once the dollar falls 3000%. And that’s all they care about.
you people keep complaining about the government but none of you seem to do anything but just that, complain. We need to stand up and demand our country back from the elite. We are the boss of them, not the other way around. They tell us exactly what to do and when, and we need to put a stop to this before our children’s future is destroyed. Contact every lawmaker in your area and demand som action, put out a recall petiton for them if they don’t do the job. If you or I went to work and didn’t get the report done we would be out of a job, it’s only fair.
Its time for America to revolt against oil companies and oil producers. If everyone would car pool four to a car, the oil consumption for people going to work will drop 75%. Also force auto companies to stop making gas guzzling SUVs and pickup trucks. Start pumping all your oil in North America and tell the people acrooss the pond to eat their oil and stop sending them food and aid.
No wonder the Dollar goes lower and inflation pitches in and forces Americans to start to live with much fewer goodies than they used to in the past. It will get much worse ! Americans have lived beyond their means for years. Just look at the negative balance of payments ! For every 100 dollars the average American spent, 6 dollars were borrowed from abroad ! just think of it over the last 10 years that added up to about 50 to 60 dollars of dept to foreigners per 100 dollars you spent ! If you have to repay in one year, you will have just 50 dollars left to get goodies for yourself ! Have the goodies you bought last year !
Creditors around the world start to realize that ! they want the money back ! How are Americans going to pay for it ???? Many factories making goods to repay with, have disappeared from America, they are in the emerging world ! Americans you are in trouble. The pinch you feel is only the beginning of an extreme belt tightening leading to serious social unrest.
Sorry, bad news but neither Mr. Busch, Mrs. Clinton, nor Mr. Obama will be able to fix it.
We foreigners might get in trouble because of that as well.
.
I’m worried about the trade deficit, corporate ethics and wage recession. The Feds can always raise interest rates to ease inflation, but they refuse to bust tax exempt windfalls these CEO’s give to themselves. Look at ticker XOM (Exxon Mobile) for the last 5 years. They beat the market. Meanwhile, after foreclosures reach record highs their still priced above the national CPI and real wages of the middle class have gone down. There’s no economy to support these prices. They’re kidding themselves and proving their incompetance in understanding the economy. There’s NO excuse for these stupid banks to not know that the economy couldn’t afford the mean and median prices of these homes because these highly paid execs don’t understand the basic fundamentals of statistics called a skew. Which is very informational and risk resistant. The housing sector need an economy to keep the prices at average, they didn’t have even that.
And with the value of the U.S. dollar at these lows, I doubt that China will buy out our goods. They’re cheap and nationalists. Clinton was an idiot to sign NAFTA. Lobbyists in this case was damaging to our economy.
Isn’t it just great that the president is flying all over the world maing his “last visit to friends” using Air Force One and spending all that money on the fuel to fly it while this country is jsut trying to put food on teh table, trying to have a roof over their childrens head, trying to pay those hig medical bills and even for some, trying to find a job. AND. then the people running this country don’t even know if we are in a recession!!! Must be that they don’t care because they have an interst in big oil. And how about our so called “friends” in Saudia Arabia, they won’t increase production either to lower prices. This country needs to go GREEN and go quikly. Quit talking and let’s see action.
The home prices were meant to fall. I’m more worried about inflation. What I do not understand is why were these CEO’s were allowed to pay themselves 200+ times their employees in stock options. Money is being pumped into banks to push retail (real estate). Retail will not better our economy, ethics, competition and efficiency is necessary to turn things around.
When Americans suffer the plight of low wages in the face of inflation, you can’t save enough money to start a business that will employ people. The government should be plotting initiatives for lenders to market their services to research centers and universities with access to energy and medical research, not real estate (retail). Exxon Mobile sure isn’t going to put their funds and efforts into developing their own competition.
I would hope that our leaders would take a proactive approach to enable Americans to CREATE (vs. borrow) wealth. We had a nice creation with tech in the 90’s. There’s so many opportunity costs.
American corporations act as cannibals. We’re not set up for international competition. And it’s rather disgusting taht the Chinese, who have a labor shortage hasn’t exported jobs to the U.S. — to save costs and import taxes on their products.
Everything is being done the wrong way. People like myself knows how to take advantage of NAFTA, except that people like me lack the capital and the upward mobility (which requires a trust fund) to do so.
PATHETIC. Collectively, we get the incompetance (leaders) we vote for.
Why do people look to the government to solve everything? There should be NO government bailouts or involvement in the business world except to prevent coersion and fraud. Let the invisible hand do its job! The government is extremely inefficient and even when laws are passed to protect consumers they usually have unintended consequences of harming them. Give power back to the people, not more to the government. They create enough problems as it is.
Mr. LaMonica,
Thank you for writing about the concerns of your readership. Here are the results of a qualitative analysis of the 86 responses you received (as of 11:34am on 04/16) to your question “Are you more worried about rising food and oil prices, or falling home prices:”
– 56% cited inflation / dollar devaluation as the primary concern,
– Only 3.5% cited housing as the primary concern,
— 45% of responses voluntarily cited: housing prices too high / let housing markets adjust downward / no housing crisis / no public bailouts of parties to the housing bust
Based on these results, I think your coverage in the subsequent article, “Inflation is Everybody’s Problem” understates the results in two significant ways: 1) it fails to mention that a majority of responses specifically rate inflation as a bigger worry than falling house prices AND 2) it fails to mention that a near-majority of responses (45%), even without prompting, contradict your allegations that “rising foreclosures and delinquencies are not good for the economy” and government intervention in the real estate market “is in the best interests of all Americans.” (While CNN is not the only media outlet spouting these unsubstantiated or misleading claims, it does not excuse CNN from jumping on this bandwagon without critical analysis). Moreover, many of these same responses not only object to bailouts of corporations involved in the housing boom (i.e. Bear Stearns), but also object to public rescues of those facing foreclosure or delinquencies. The issues raised in these objections from the public-at-large typically reflect a thoughtful, ethical reasoning sorely absent in the propositions from Wall Street Barons, politicians, and media pundits.
So, Mr. LaMonica, let’s see if your courage and integrity will lead you to pose any of these questions to your readers:
1. Are declining real estate prices bad for the economy?
2. Which has the worst impact on your wealth accumulation efforts: inflation, falling house prices, or public bailouts?
3. Should public monies be used to rescue individuals facing foreclosure or delinquencies? If yes, for how long should the public bailout extend and should this bailout be retroactive?
P.S. It would be much appreciated to see these questions posted in an article that gives Americans a more detailed picture of the foreclosure / delinquency rates since 2007 by discussing: the drop in foreclosure /delinquency filings in February 2008 (RealtyTrac), the slowing pace of foreclosure / delinquency filings in 2008, the percentage of months since 2000 in which more than 50% of monthly mortgage applications were not for home purchases, the percentage of foreclosure /delinquency filings that are for second mortgages and HELOCs, the multiple filings of foreclosure /delinquency on single properties, and the percentage of foreclosure /delinquency filings for multiple-unit housing structures.
Based on these results, I think your coverage in the subsequent article, “Inflation is Everybody’s Problem” understates the results in two significant ways: 1) it fails to mention that a majority of responses specifically rate inflation as a bigger worry than falling house prices AND 2) it fails to mention that a near-majority of responses (45%), even without prompting, contradict your allegations that “rising foreclosures and delinquencies are not good for the economy” and government intervention in the real estate market “is in the best interests of all Americans.” (While CNN is not the only media outlet spouting these unsubstantiated or misleading claims, it does not excuse CNN from jumping on this bandwagon without critical analysis). Moreover, many of these same responses not only object to bailouts of corporations involved in the housing boom (i.e. Bear Stearns), but also object to public rescues of those facing foreclosure or delinquencies. The issues raised in these objections from the public-at-large typically reflect a thoughtful, ethical reasoning sorely absent in the propositions from Wall Street Barons, politicians, and media pundits.
So, Mr. LaMonica, let’s see if your courage and integrity will lead you to pose any of these questions to your readers:
1. Are declining real estate prices bad for the economy?
2. Which has the worst impact on your wealth accumulation efforts: inflation, falling house prices, or public bailouts?
3. Should public monies be used to rescue individuals facing foreclosure or delinquencies? If yes, for how long should the public bailout extend and should this bailout be retroactive?
P.S. It would be much appreciated to see these questions posted in an article that gives Americans a more detailed picture of the foreclosure / delinquency rates since 2007 by discussing: the drop in foreclosure /delinquency filings in February 2008 (RealtyTrac), the slowing pace of foreclosure / delinquency filings in 2008, the percentage of months since 2000 in which more than 50% of monthly mortgage applications were not for home purchases, the percentage of foreclosure /delinquency filings that are for second mortgages and HELOCs, the multiple filings of foreclosure /delinquency on single properties, and the percentage of foreclosure /delinquency filings for multiple-unit housing structures.
we have no leadership in this country. All the politicians want is a vote. They do not care about the people or the working class.Regarding the oil and gas prices it is all made up. When the consumers stop driving to conserve energy the oil companies respond by reducing production to keep prices high. It doesn’t take an extremely intelligent individual to know what is happening. Even this country’s leadership should understand this. However, they DO NOT CARE. The independent truckers should stop driving and shut all shipping down and then some results can be achieved.
Inflated housing prices were created by everyone that felt/feels entitled to make a tidy profit when a home is sold. Housing prices rose artificially, and are only retreating to a more sensible and realistic level. The decline in artificial real estate “value” does not bother me a bit! We are not really talking value here- we are only talking price.
The ability to eat and stay comfortable is a much greater and real problem than housing prices. Problem is, energy prices affect everything- transportation, food prices etc. And guess what? The energy prices seem to be driven by market speculators, not investors. The good news is, energy prices will climb only so high. Then thankfully, prices will collapse and leave the speculators holding the proverbial (money) bag. And it will for certain be empty. Energy prices will retreat dramatically, and the speculators will be scratching an industrial strength itch.
With truckers paying $4.00 a gal.in Texas, and probably more other places, and the prices continuing to rise, it will continue to cost more for everything. In case you haven’t noticed, your government listens only to big business and the rich. The new owners of this country besides oil rich countries will be China and India, who have the money. Gas will go to $4 or more a gallon for the summer and then back to $3.50-$3.75 for the fall and everyone will be so grateful. As others have said, Wake Up people the end of life as has been known in this country is over. The middle class will become the poor and the poor will become whatever comes next. Indentured servants, maybe? The rich will get richer and soon there will be an end of life as we know it.
Fed must stop cutting interest rate, at least keep it at certain level for some time. Time is the best solution.
Falling dollar, accelerating commodity prices are killing most of the Americans now.
I understand what the FED is trying to do when they cut rates, however, don’t you think they should have noticed that it is not working. What happens when they get to 0% and the dollar is still weak? When the dollar was strong then the price of fuel stays lower. The problem is the dollar has been allowed to become so weak that the rebound seems near impossible. When the price of oil was based on supply and demand then cutting rates worked. That is not working now, it is making it worse. Let’s work on strengthening the dollar and reeling in the oil prices and watch the economy take off. Raise the interest rates back up where the dollar stands for something. I don’t want to pay more for things, but in the long run it will help us all.
It is hard not to think that the Government is only supporting big business and not worried about the impact its actions will have on the consumer and average American. When the government lowers rates to aid businesses and so forth, everything just seems to be increasing in prices, but it goes well beyond that. The falling dollar is only compounding an already critical time in our economy. Look at our energy policy; mandate ethanol use and keep farming subsidies, who is hurt, the taxpaying consumer. Food prices are up partly due to this, because corn is such a staple in all other agriculture and farming uses. Meanwhile the technology is proven to be less than adequate as a solution to our energy crisis, and I am paying more for everything from meat to a loaf of bread, 3.50 for a gallon of gas, and still the Fed is following a policy that is trying to stimulate the economy and ignoring inflation. I don’t see how you can think in terms of, “Well one more cut wont hurt”. Meanwhile, the response to inflation is “we’re keeping an eye on it, but we don’t think its too big of an issue”. But it is the issue, its like saying “one more donut wont hurt, and I am keeping an eye on my waist line, I don’t think it will be too much of a problem”. Well America, we are 3 dozen donuts in and are just about to pass the last notch on the belt of keeping things in control.
Does anyone remember the Boston Tea Party? What it stood for? Does the government believe they can just keep taxing and no one will complain?
I feel that this is a very complex problem that when spoken too is over simplified. As a person in mangement I am constantly shocked and dismayed by younger adults, even those my age, who have very poor life and professional skills. These individuals make very poor decisions; buying a house they can’t afford, cars that don’t fit their needs and they can’t afford, buy now worry about how to pay later are a common theme. The ultimate irony is that the parents, aka baby boomers, are going to the most immediate and painful price for not educating and holding their children accountable. This “price” is a devaluation in their retirement funds and their property values.
If I hear one more bleeding heart scream we don’t pay enough I’ll scream!!! What Idiots tank the whole economy just so you can feel good. Move somewhere else and leave the reasonable people out of your utopia!!! Fools!!!!
Why doesn’t the govt. realize everything is tied to oil and gas? Many of the food price increases are due to the business costs increasing trying to produce and deliver that food to our tables. How about packaging of the food..oil is used for the creation of plastics. Trucks need to deliver the food to the stores.
Once the govt. realizes that oil and gas are tied to everything, that its a basic need like water and shelter…they might get smart and stop taxing it like crazy..or even better, put limits on the prices. Let those CEO’s of gas companies take home only 20 million instead of 50 million…..
Since most of US citizen’s assets are valued in US$, and the US$ is crashing, we are all getting poorer by the day. Because stocks are valued in dollars, stocks must rise just for investors to break even. Commodities like oil have a price determined by global markets. I spend part of each year in Chile and the price of gas at the pump has not changed in 2 years. It’s the US$’s fall that causes higher gas and other prices in the US. This is inflation – in the US. It’s not the commodities that are going up in price; the falling dollar buys less. I’m here in Chile, the peso is fine, and commodities are not rising in price. Inflation might be everyone’s problem, but it is not happening outside the US, at least not to the extent it is happening in the US. Look at the boom in Australia, for instance. Housing prices have risen in the last few years. The falling US$ is a symptom of more systemic problems likely involving our titanic Federal debt approaching $9T or with 300M people, about $30,000/person. To pay this debt a family of 3 would pay $90,000. Neither political party is willing to deal with solving systemic problems. I guess its easier to find scapegoats than solutions.
The Congress needs to repel the HR 6 Energy Freedom bill they just passed and get to some realistic facts before they pass stupid legislation. We need the corn for food not fuel. The congress has driven up the price plain and simple. Common sense tells you if you move that much grain out of food production you’ll raise the price. The Democratic Congress and Bush are going to make us Slaves to Corporate store for decades to come. Congress Repel the stupid energy bill and go home. You are making more trouble than you are worth!!
Sybil,I agree with everything you said. I know many people who were telling us to buy a bigger, more expensive house cause everybody else were doing it. They were saying not to worry about interest-only loan and “teaser” rates, in such a hot market. Same people now complaining that they were mislead by the loan agents!
Now both Dems and Repubs desperate for their votes, want to bail them out and put us more in debt. NO BAIL OUTS!
For fuel prices, I walk, take bus, and carpool. It is not convenient but it is doable.
Housing was bound to come tumbling down thanks to the ineptitude of the Fed keeping rates so low for so long and pretending not to see the bubble forming. As I have often said before, my home is first and foremost a place to live and if it goes up in value, that’s just gravy. It is not primarily an investment. Fortunately, we bought about what we needed and resisted the siren call of a an ARM. So, I’m not the least bit concerned about falling house prices.
As for rising food and energy prices, since the wacky way the government tracks inflation omits food and energy in it’s so-called “core” inflation figure, the Fed can continue to pretend not to see the bubble forming in that area until people start dying due to it, then pretend not to have been able to do anything about it.
But even the food and energy price rises don’t concern me nearly as much as the Medicare and Social Security twin WMDs that no one who might be able to do something about them (especially not the 3 front-running presidential candidates or most members of Congress) will even acknowledge, much less seriously address them.
In about 15 to 20 years, we’re going to look back to the current time fondly reminiscing about the minor problems we had compared to what we’ll have then if nothing is done.
High energy prices are a result of enviromental policies that make me want to screem! Coal fired power plants are the way to go for this nation. Stop regulating your way into a dooms day that you will then have to claw your way out of to even get your head above water. Burning natural gas in a power plant is a waste of energy that could be powering our vehicles. This nation needs to drill, drill, drill, to allow us the time to convet to a more frendly fuel. What happens enviro’s when you get old and can’t climb to your special mountain and need heat and can’t afford it. You’ll change your tune fast. One thing about enviro’s is that there head is stuck in the green forest they are trying to protect and they can’t see the forest for the trees.
Get your head out of the sand washington, and open Alaska and all areas for drilling and we might make it to the next century as a great country….
Rising food and energy prices are more important to me, mainly because I do not plan on buying a home as of yet. The more expensive the basic necessities become, the less people are inclined to spend money on consumer goods.
Would everyone finally forget about housing going down??? The people who bought houses that they can’t afford deserve to get stuck with them. Period. What about people who were rational, like my family? Why do we have do endure unreasonable costs just so that Fed can bail out failed Donald Trump wanna-be’s?
The Fed needs to raise rates and I am very upset that Congress passed the economic stimulus package as well. This just dumps more money into circulation and drives up inflation even more. We need to be contracting the money supply to fight inflation, not making money easier to obtain. Didn’t any of these people ever take a basic Economics course?
I am so tired of listening to Dems and Republicans duke it out, too. I am ready for a new third party…one that favors the social liberties of the Democrats but the economic policies of the Republicans. Out with the two party system, it is time for a change because I do not trust either of them!
The Fed needs to stop cutting interest rates and then start to gradual rise rates. Further rate cuts have only marginally impact on lending. The problem is that investment bankers have overcooked their books and no one has any confidence in their financials. Further rate cuts won’t help that but will greatly increase inflationary pressures. The falling dollar and accelerating commodity prices are clear signals of inflationary expectations. Let’s not punish the financially prudent Americans and our fixed income seniors to bail out the imprudent and greedy!
All of the above…and the ill informed person who mentioned those people who lived off their home equities. Well, I’m here to inform that reader that some of us turned to our only access to funds to open and operate a business that would employ others. Unfortunately, as it would turn out with the way the economy was taking a down turn, so did our business and everything we risked to do this venture. I know we are not the only one’s out there that took a huge risk. Now we are paying for it with everything we own!
Right-on Rod and Sybil. Will we ever become wise enough to realize that happiness does not come from more and more stuff. When our basic needs are fully met, we fool ourselves if we think conspicious consumption will add any richness to our lives.
I love the straight forward, contemporary language of Eugene Peterson’s, “The Message” where he translates Matthew 6:25ff, “Don’t fuss about what’s on the table at mealtimes or whether the clothes in your closet are in fashion. There is far more to your life than the food you put in your stomach, more to your outer appearance than the clothes you hang on your body. Look to the birds, free and unfettered, not tied down to a job decsription, careless in the care of God….What I’m trying to do here is to get you to relax, to not be so preoccupied with getting, so you can respond to God’s giving.”
I don’t heat my house when I’m not there. When I am there, the heat is at 55. I use small electric heaters to warm up just the room I am in at the moment. Point the finger of blame at the machinations of the government in trying to control the markets and supporting the welfare/warfare state. We’ve lost control of our government and it is utterly out of control.
I am very seriously against big government, but I’m starting to get a little realistic in my conservative thinking . . . so it’s got me thinking, “What can our government really do?” . . . and the first thing that comes to mind is that our goverment can put a profit cap on energy-producing company (oil, electricity, etc.) profits. WHAT??? What a ridiculously uncapitalist, even socialist view of managing costs!!!
Well . . . when we consider that it is the EPA’s regulations that have given the richest energy companies a monopoly on the energy industry and driven up the cost of the refining process, etc. . . . perhaps it’s time that another arm of the government step in and say, “ok, now that we’ve given you a monopoly on the industry, you can only exploit American citizens so much . . . so here is your cap on profits. Anything you make above and beyond this cap will be refunded directly to the federal government, to be disbursed immediately to citizens proportianate to their energy expenses.
“Citizens of America, we as your government leaders highly suggest you start keeping your gas, oil, heating, electric . . . receipts . . . because they will determine how much you get back.
“ps – to the energy companies . . . corporate tax evasion will now be punishable by the top ten profit holders in the company stripped naked in Times Square and hung upside down from the Calvin Klein billboard for 2 hours each . . . and oh yeah . . . all your assets will be divided up amongst those who can prove that they drive a car that gets 25+ mpg . . . and oh yeah, you have to work for minimum wage at McDonalds (you choose the location) for two years. Granted, this will probably result in your imminent suicide . . . but that won’t bother us . . . since you took bread out of our children’s mouths for years as a result of your greed.”
Did I say too much?
If we can’t afford the gas we don’t need new highways , you don’t buy a house to invest , you buy it to have a home. Soon the big focus will be food because of fuel prices , farmers can’t run there tractors on hay.
Take control of what you can , plant a garden ,put up a cloths line , do away with things you don’t need if they cost you money , drive less , stop spoilling yourself.
sound crazy I know but has anyone else paid any attention to the food shortages around the world , we could be on the verge of our own…………..!
I would like to see a groundswell of people call or write their Senators and Congressmen, as I have, and ask them to investigate why the prices of home heating oil and diesel, 2 less-refined products, exceed the price of gasoline. My wife and I thought that buying a diesel car and SUV were responsible decisions at the time. My wife gets over 35 m.p.g. and the other day I got 32 m.p.g. in an SUV. In Europe, 50% of the vehicles on the road are diesel. This should be what we are encouraging in this country because it reduces consumption by at least 20% vs. gasoline engines. Of course, the oil companies know that don’t they. Last August I was paying $0.10-$0.15 less per gallon for diesel than low test gas. Now I pay $1.00 per gallon more. Can anyone explain this to me? And think about everything that is in any store that we all shop in–it got there by truck powered by a diesel engine. Maybe our elected officials could stop investigating steroid use among baseball players (obviously of national security interest) and maybe start actually helping us.
The Feds deflation of the dollar right now is not the solution. A recession is inevitable as is the long overdue market correction in housing. Devaluing the dollar will only exacerbate the recession and make it more painful. The thing that can save us is bringing manufacturing (and strength for the dollar) back to our shores.
Obviously I’m more concerned about Fuel and Food costs (inflation). The housing market may falter, but my house is paid for. Lowering my Net Worth is not a concern when everyone’s Net Worth is going down at the same time.
The Fact is responsible people don’t purchase huge homes that they can’t afford in the first place. “Afford” meaning the ENTIRE package! Mortgage, Taxes, Maintenance, Heat/AC, etc… YOUR HOUSE IS NOT JUST A MORTGAGE PEOPLE!
I have a house that I can afford. What I am concerned about is rising prices and lowered interest rates. All this economic mayhem is making it difficult to beat inflation with my investment income. So even all of the money that I’ve saved is losing value!
I blame that on the irresponsible IDIOTS that bought more than they could afford! And the Feds (using MY tax dollars) for bailing them out!! >:-{
As an immigrant to this country it always amazed me how much money people make here in America, how low are the prices compared to let’s say Europe and yet how everything is spent away.
Welcome to the new world folks where the global maarket is competing for oil, food, production, wages etc.
Everybody in America will need to adjust in the future to the new realities: lower wages, lower living standard, less disposable income. The rest of the world is rising up and competing.
I am not sure what people were thnking when the median price of homes were rising at such a fast pace and were trying to buy and sell to make a quick buck. The sane people like myself stuck with the houses we could afford comfortably. I almost got on the band wagon thinking I could make a profit on my house and buy another until I woke up and realized I would have to put all my gains from my existing home into another of less size and more money. I guess what my point is did everyone think the median price of home were going to rise at a 50% rate for ever. I think it is a shame that the thought my kids will not be able to achieve the american dream of owning a home because of some greety investors buying and selling homes at infalted prices. The market is just trying to level itself out to what it should have been prior to this travisty and the feds are helping the wrong people. They should let the big wigs from these investment firms sink to the bottom with all the other scum.
Inflation is obviously the biggest issue. It starts from the value of dollar. Weak dollar pushes oil prices and makes ALL Americans poorer. High oil prices trickle into everything. Eventually all prices will shoot up as businesses will not be able to remain profitable.
The housing is not an issue. It was a bubble and those who wanted to speculate on it have lost. Those who were living on equity loans were eating their future. It’s good that they cannot do it anymore.
Now energy prices are another bubble. All speculative money went from housing to energy. They are making huge profits now. But eventually high energy prices will crash economy and nobody will buy oil anymore. Americans are being squeezed now, but it cannot continue forever. Eventually people will not be able to afford going to work and eating. Hedge funds, pension funds and other “investors” will lose big.
I’m an older guy who has a pretty good, not infallible mind you, but pretty good memory. I remember how DDT was going to be the end of bugs, how cigarette smoking was not harmful, how the Gulf of Tonkin was the reason to escalate the Viet Nam war, how Saddam Hussein had large stockpiles of weapons of mass destruction.
Our government seems to either lie to us, or sanctions those lies so corporations can make money. I have reservations about the Federal Reserve’s reasons to “rescue” a bank, and congressional efforts to “rescue” homeowners who made, mostly, very bad decisions.
My point is, that I’m seeing prices skyrocket on the things that I need to purchase every week, but the “core inflation rate” rises only minimally. SOMEONE IS LYING TO US. Inflation is much higher than the government is telling us, and if that’s true, then what else is not are they lying about.
it’s a downward spiral.
our politicians refuse to do anything about the oil issue. we can totally stop importing if they would grow spines and allow us to drill on our own land.
the democrat solution to helping the economy is taxation and more entitlements.
ethanol which was heralded by the environmentalist as a savior is causing more harm then good and our govt. is still investing more into it. Food and fuel is going through the roof so caribou can mate in peace and quiet and to make corn farmers happy.
the dollar will continue to drop if the govt continues to make more money.
can you imagine what this country’s financial situation would be if our spineless govt. caves into this man made global warming myth?
Biofuels was politics not science. Many experts agree that it takes more energy to produce a gallon of ethanol than the energy you can obtain from the ethanol and the impact on the enviroment is a net negative. We saw the train wreck coming in 1973-74 and we made no long term changes. In the meanwhile we have created a tremendous demand for petroleum in developing countries such as China and India through our trade policies(or lack there of). Only a $280 billion balance of payments deficit with China in 2007 with an associated loss of jobs in the US and an unprecedented rise in global pollution. Sounds like the train wreck has come. Enjoy your shopping trip for imported goods and food in your imported car with $4.00/gal gas. We’ve earned it with a lot of help from Washington and Corporate America.
Like others here, I completely agree that the Fed must STOP lowering the interest rate, which is helping to fuel inflation.
Food and goods prices are my major concern. We really need to keep a tight watch on our spending dollars for day to day living necessities. Food, water, all of the daily goods we need and the cost of those goods are the major concern.
But I do have a contrary opinion when it comes to fuel pricing. Personally, I have always thought that the cost of gas was FAR too low, and really think it should be in the $5/gal range, to force the consumer market to demand from our government and automobile manufacturers to produce cars & trucks that get FAR greater MPG than they do today. From my perspective, it is not how much gas “costs per gallon”, it is how little “EFFICIENCY” I get out of that “gallon”. If I buy 10 gallons, and am getting 60 MPG at a cost of $5/gal, I am getting FAR more “bang for my buck” than I get paying $2.50/gal for 10 gallons and only 22 MPG!
Here is the math:
10*$5=$50 10(gal)*60=600 miles
10*$2.50=$25 10(gal)*22=220 miles
That is a cost SAVINGS of about $18.25, to drive the same distance @ $2.50/gal with only 22 MPG as opposed to $5/gal @ 60 MPG!
You can’t have long term economic growth based on debt, but obviously, the government thinks otherwise. Debasing the currency to this degree is not only immoral, but economically dangerous. I personally do not know anyone who has a problem with their mortagage, but everyone I know is having a problem with inflation. Inflation in eroding the wealth of the average consumer. These are the people that would normally expand the economy after it has endured a normal correction. I am afraid that in its effort to save a minority, the FED has ruined the majority. Thanks alot. When is the FED going to stand up for the average consumer and stop bending over for the elitists and those on Wall Street?
I have commented before but I would like to reiterate my previous lost comment. As a nearly 30 year Mortgage Banker, I have studied how the monetary system works. All the news around the housing crisis is real but the actions of our Fed have only caused a delay in the recovery process. By flooding the market with cheaper dollars chasing the same or fewer goods, the tendency is for prices to rise. That being said, even though the rates that the Fed has control over may come down, it’s the longer issued paper that sets their price and rate more directly to the threat of inflation. If the Fed were to stop RE-acting and start acting to manage price stability, then longer dated maturing bonds would also come down in rate resulting in lower mortgage rates. This would allow more people to qualify for mortgage loans that would still like to buy a home especially at these lower prices. It would also allow opportunities for those with higher rates to refinance and lower their monthly payments giving them more money to handle all the other day to day living expenses and stop the housing decline. From here if they just said “we have stopped lowering the rates we control. We will allow for our actions to work their way into the economy and we will begin to focus on price stability”, the premium built into longer dated maturing bonds will shrink, dropping mortgage interest rates by at least .50% or more and we can see the economy recover within 6 months.
We are SO spoiled in the USA.
How about the people in Asia and Africa, living on one or two dollars a day trying to pay for their food?
We complain if our chocolate truffles don’t taste right. People in Haiti eat “cookies” made out of mud to keep their stomaches from rumbling.
Those politicians in Washington, D.C. need to OUR house inorder and stop using OUR house for their own personal gain!!!
The basic economic issues are so clear to me. This country became what it is through providing products to the world and ourselves, and people paying real money for those products.
Now we are in a situation where not only people, but the companies, banks and government entities have barrowed money from each other in a great big circular loop. All this “fake” money was used to buy product from other countries. So now no one here has any cash, and the manufacturing infrastructure no longer exists.
It scares me to think that our economic and political leaders think that this country can go down the path toward a service society, where we make no products.
This question is really more about people’s perceptions and greed than either of its components. We can look at this as a short term or long term issue, with housing being short-term and inflation being long term.
Housing stinks right now, but you can’t say its not fair when its a market, it goes up and down just like everything else does. If you couldnt see the bubble bursting, then you must be economically blind. It is going through an adjustment period, housing prices and rent prices will have to merge closer to each other to prevent this, and no amount of rate lowering by the FED is going to cure any of it, its just supply and demand, simple as that. But, we have to remember that we have to look beyond the short term. Most people stay in their houses a while, why cant you simply stay put and not sell? What is the harm in that, unless you got an adjustable ARM and cant afford payments; in which case you are either an idiot who didnt pay attention or a greedy investor who got stuck. The housing market will stabalize and return to a normal growth rate, it just simply takes time.
As for inflation, this is something that time works against you. Even if we can combat high inflation right now, it still doesnt mean that the price of things are going to get any lower, for food, gas, etc. hardly ever go down. This is a long term issue that needs to be dealt with that will eventually cost America more money. So, what do you want more? A quick housing fix that is still going to kill your wallet with inflation, or an inflation-combatting strategy that will let the housing market slowly and naturally return to normal?
Honestly, people have already answered this question in their own mind, and you can lump the idiots who agree with the housing fix along with the idiots who bought the houses they couldnt afford. Geez, coincidence???
I got an idea – stop handing out all our hard earned money to other countries in “need” and start helping the people in this country who are in need!
Rising gas and food prices are hurting most of us right now – however the housing (credit) crisis is going to hurt ALL of us later.
Right now municipal and commercial loans are at a standstill – jobs are slowly dwindling – and delinquincies in personal and government debt is rising at its fastest rate ever.
The unravelling of overextended credit is leading us into the prospect of a major economic depression, NOT a recession.
If we reach that point we will no longer care about the cost of food and gas – we will be more concerned where we can find a job to pay for either of them.
Best advice – prepare for hard times and at worst look like a fool if they never come around.
All I can say is thank God the oil in the Gulf of Mexico is almost pumped out the soonner this happens the quicker the Gulf Coast will become once again a pristine ocean front without the tar on the beaches and brown petroleum products turning the water from green blue to brown.
It’s time we mined the oil off the east and west coasts and let their coast lines become as trashed as ours has become and place refiners in the back yards of Nantucket and Hollywood and see how they like it.
The higher gas goes the less we will have to polute Texas with supplying the rest fo the nation
We are definitely considered about rising heating oil prices and gasoline.
We purchased our house last year when heating oil was a manageable $2.39 a gallon. Our last fillup was $3.59 a gallon! With our heating bill averaging approx $500-600 each month between November and March, we did everything possible to stay afloat and warm. My wife is pregnant and it was especially hard for her. We kept the heat at 55 degrees when we weren’t home and a balmy 60 when we were home. We wore layers and left the kitchen oven and toaster oven open after each usage to utilize the warm air they had.
It was not easy. Our bodies adjusted but when people came over they said it was freezing so we would stubbornly bump the heat to 70 where we would start to feel it was hot.
Sad. We’re hoping heating oil prices will come down this winter with the baby. Some things like heating oil should not be traded and we should not be at the mercy of traders. With most of the country on natural gas, no one really cares about us heating oil customers. What happened to the basics of food, warmth, and clothing?
Will anyone help?
do you ever quote those of us who do not agree with you. Bernanke HAD to stop the slide – HAD too!
Taking McCains idea to stop gas tax – Good idea, yet it did not come from a democrat. so – bad idea
Oh and by the way if you want to blame someone, how bout blaming the liberals who will not let us drill our own oil- so Cuba now has equipment that operates horizontally – is now able to steal our oil off of our coast – because – don’t dare mess with all the fish,
I think as this continues and people wake up, and time goes by and more truth really get exposed, we are all going to get a little more bitter, but it won’t be because of Bernanke, it will be over the years of ignorance, just don’t mess with my enviroment
Inflation should be higher on the feds list of concerns than it appears to be. I do feel that the mortgage meltdown deserves the attention of the fed, and I understand why they had to save Bear Stearns. I mean the fact is that some business are too big to fail. It is a tricky road that the Fed has to manuever right now. They are lowering interest rates to increase capitol expenditures and spur growth, however it is not working the way it usually does because the sector of the economy that is in crisis is the banking sector. I am very concerned that they are going to lower interest rates even further. Inflation has already increased and it could be depated that the effects of the recent interest rate hikes have not hit inflation yet. I don’t know what the solution is, but that is not my job. It is the job of the people at the Fed and in Congress and I can see that it is a challenge, it needs to be fixed all the same. I don’t like the way they seem to be jumping through hoops for Wall Street. I mean to me the only stake I have in Wall Street is my 401K and the lower the market gets right now while I am buying the better off I will be in the aggregate.
Rising oil prices causes our gasoline prices to rise. So what do we do to ease them, we use our food crops such as corn, etc. for biofuel causing food prices to go up. Some solution! Who is minding the economic store? Mindless Republicans and some Democrats who run for public office for all the wrong reasons.
Rod in NY is right on the money. We have been consuming at an alarming rate and we dealt with jealousy in the world at large by helping them learn to consume like us. Which they did learn and it is reflected in rising commodity prices. The cause is much more a supply/demand problem then a fed-rate or dollar value problem.
The only economic model we have is one of growth. But we live on a finite planet.
“Someday” we will hit the wall of room to “grow”. Many people want to think that “Someday” isn’t here yet, or magically will never come. Both parties and most people have someone to blame, and way that will “fix” it other then cutting back on life style. It will be better when Bush/dem congress/iraq war change, when China revalues their money, we make more biofuel, we make less biofuel, we go back to God, we give up God, the fed cuts rate, the fed raises rates, on and on and on. Its “Their” fault, and if “they” did “something” then “someday” wont ever come.
I know I will be accused of predicting doom and gloom by saying that Americans MUST reduce their life style. Oh, horrors. We need to wear our clothes longer, drive smaller cars, eat a less rich diet, take less vacations, buy fewer toys. Doom and Gloom! How horrible that will be. We might just have to turn off our T.V.s, stop being “connected” every minute of every day.
Maybe meet our families again. Make friends at work. Have neighborhood parties and take walks.
Oh Doom and Gloom.
Gas and food are much more important. As a single parent it’s tough to drive 50 miles a day paying $4 a gallon for gas and hopefully have enough to buy food for my son. I can’t afford to buy a house, since I live in southern CA, where even after the big price drops (24% over last year) it’s still expensive. It seems the reason for the fall in prices is the speculators and subprime borrowers are out of the market, and I say good riddance. If those people lose money because of this, good-maybe we’ll all learn from it…But I doubt it.
What we are seeing are short-term swings in markets–whether it be housing or inflation etc etc. The real issue is what is going on structurally that will change the long term. With 6 billion people on earth and Americans leading the charge in consuming way beyond what the earth can sustain–what do you think will ultimately happen? We are 4% of the world population but we consume 25% of the world’s good and services. If China and Indai alone increases their per capita consumption to even 25% of Americans, commodity prices will go through the roof. And that is what is going to happen in the long run. That will force Americans to reduce their standard of living by way of prices rising faster than incomes. It may happen gradually over 100 years or faster–I don’t know but it will happen. In the mean time, we will kick and scream about temporary ups and downs of markets like housing and oil and elect presidents that promise to fix it. But the end result will be the same.
I would say that I am more concerned about food and energy prices in the context of the current times. The soaring cost of food in particular is having a staggering inpact more broadly around the world where riots are now occuring in a host of countries.
But the matter I think should be an area of focus for those of us in the United States is exactly how the CPI is being arrived at. Yes you can find guidelines, but they are arcane and are weighted in fashions that make it clear a lot of judgement occurs around the margins of the calculations. Moreover, do folks realize that a host of people actually go around checking the prices of goods in a so-called market basket? You know if you try really hard you can find the cheapest price for a particular item. In my town – a suburb outside of NYC – there is a gas station that undercuts the rest by more than ten cents. There are huge lines and the result is that about 99% (probably more)of the town does not buy there gas there. That is the reality. But I guess if you are checking prices for the Bureau of Labor Statistics, well that would count wouldn’t it. And of course we could spend a few paragraphs on hedonics if we had the time – it also having a huge impact.
But the real point of this is whether or not we can really believe the information currently being posted about the month to month rises. It just doesn’t add up. A ‘0′ rise last month? .3% this month!? Isn;t gas up 67% year to year? What about the rising food costs you cite in the column?
I think it is about time people start thinking about all this more seriously. We are being gamed here. The situation is far worse than we are being told. Wall Street knows the reality, but it is not in their interests to pipe up because the price of bonds would soar and that is not in the interests of the equity markets.
So the question is, when will folks wake up and start pressing their congressman and others to be more realistic about this linchpin number that impacts so many folks lives (e.g., social security cost of living adjustments) and say we need the truth. We need the facts so that the right decisions can be made and a fair determination on policy can be arrived at. The time for action is now.
Christopher I think you have summed up all of the economic problems of the western world in one paragraph – perfect. At what point does all of this energy and food inflation begin to produce wage pressure and in turn feed on more inflation? I think the fed in partnership with the administration have backed themselves into a corner where they have a 2 sided coin where “heads we lose, tails we lose”. With the fed attempting to reignite the credit engine and continue our service & deficit focused economy I think they are just delaying and intensifying the pain of the end game. The end game being the time when we are forced to make the structural changes to shift the focus of the economy from borrowing and consuming to producing and saving.
Looking ahead, the real underlying threat is in not being able to turn back the clock. We have all seen how markets rise and then fall only to rise again. This also seems to be the case with other cyclicals like gold and oil. But what if demand actually outstrips supply and todays prices never receed. I don’t understand why people are not more worried. We all need to rethink our stragedy. I believe these are the good days we are living in. The future is a bit dark and scary right now. God Bless
As a homeowner that stayed put during all the madness of the past few years I am just relieved the prices turned around. All of those price rises simply added up to more property taxes, no more money to pay them. I am against any kind of bailout. It was a pyrimid scheme and it finally ran it’s course. Now we are faced with still another case of capitalism gone mad. The Commodity markets are going wild with the lower value of the dollar driving up prices of food and energy for all of us who cannot share in the runaway profit making. Some commodities should NOT be a part of these money making ventures. Anything to do with fuel and food should be exempted – immediately!
I’m more concerned with the rising prices of commodity goods. This is a direct inflationary indicator and inflation degrades the values of homes. Also, when it costs $100 to fill up a gas tank, this is $50 that is NOT being placed into the purchase economy. It’s directly related and raising the prices of home will do nothing now.
Couple this with the withdraw of credit liquidity and we have lots of fun stuff.
1. Stagflation
2. Inflation
3. Contracting Economy
4. Loss of Jobs
5. More off shoring of investment capital
Looks pretty bad, eh? We don’t need interest cuts. We don’t need more money pumped into the system. We NEED A RECESSION that is not governed by the Fed.
Quite simply, it’s going to happen whether we want it to or not. Better to get it over with than to carry forward on a hunch knowing full well that this will just make it worse.
Bail out banks. Bail out WallStreet. Bail out the big investors. Protest the bonuses of CEO’s…..
But leave the 99% remainder of the American population out to dry and best yet! Stick them with the bill after it has all been taken…
Rising food and energy prices concern me more, by far. I am a part-time farmer and this week I paid $47 for 2 50 lb. bags of fertilizer; never in my life have I paid more than $10-12 for a bag. These prices are directly related to the cost of crude.
Praise be, I’ve got some land in North Carolina that I can raise a lot of our own food on. There’s a half-acre of potatoes in the ground now and the veggies go next. At least we won’t starve; might have to defend the back 40 with an AR-15 though!
I say send a message to the unregulated crooked hedge fund traders and Wall Street investment bankers that have gotten us into this mess; impound a few of them at the Leavenworth Federal pen (NOT at an Air Force base) And throw in a few senators and represenatives for good measure! Talk about your wake-up call!
To those advocating carbon/gas taxes: Do you really believe oil/energy companies pay taxes? NO! YOU pay them!
Want higher fuel prices? Then get ready for decreased consumption. Can’t see how that will lead to more revenue.
If alternative technology was economically viable, a company would have to have its head in its collective butt NOT to pursue it.
Falling home prices don’t personally affect me as I do not own a home, nor do I have a mortgage, so I am not concerned about this.
In fact, if I could afford it, I would probably BUY real estate right now. It’s a great time to invest!
As for food and energy prices, I have noticed that prices have increased; however, prices have not gone up so much that I am forced to cut back on purchases or on portion.
In fact, if I had had the means to invest in agro commodities even a few years ago I would be making a killing right now (though I’m not sure turning corn–food–into fuel is such a great idea)
Same goes for fuel prices.
Yes, it means cutting back, but we have experienced worse and we will get through this.
I like to see all the interesting ideas that America has as to why the US is in recession. However, rising fuel costs are the primary problem at hand. It causes the food prices to go up. They like to say they are paying the truckers more — LIE, they haven’t seen a pay raise since the early 80’s. Farmers have had to charge more just to get the crops out of the field, high fuel cost. What we really need is not another tax, personally I’m tired of payong the government for nothing. We need to take big oil’s subsisties from them and use it for alternate energy and to pay drilling in Alaska, Montana, N. Datoka & S. Dakota. I mean WHY are we paying big oil?? They only made 123 BILLION last year.
It’s interesting to watch the evolution of this article …
We really need to slap a carbon tax on oil immediately, starting with about $12 per barrel, at the barrel, not the pump. Historically, only about half of this tax makes its way to the gas pump; the supply chain, include the foreign producers, absorb the other half. This will raise about $100 billion of new federal tax revenue, which we can use for national health insurance for all of us. In addition, it will start to reduce demand for oil. It will also reduce production of greenhouse gases from oil production and consumption. Biofuels do not pay for it. People who waste oil pay more. And, we can gradually raise it later.
This will have immediate positive effects and keep the dollars onshore. It’s time to start working together.
Obviously the popular concensus is that inflation is the real concern, not guarding against cheaper housing.
The FED better raise rates soon or people are going to start pulling money out of deposits — then the banks will see a real “credit squeeze”.
Im more worried about rising Food and energy prices. In fact its the rise in Energy prices that causes everything else to rise.
In my opinion the Gas should be taxed more. The resulting revenue should be directed to an alternate energy fund with the sole focus of reducing our demand on Foreign oil. If not this will be a never ending story. Id rather hurt for a short time in the near term that indefinitely.
The technology is already there. There are cars like the “THINK” which gets over 100-150 miles a gallon. They just have to made production ready.
The mantra for those in government these days seems to be “what’s good for me, must be good for the masses and the hell with unintended consequences.” I guess you have to be on the outside looking in order to comprehend what’s wrong with that kind of policy making.
Inflation on energy and food has to be the major problem. The American people seem to forget that a want is different from a need. My first house was 1000 square feet. The mortgage was fixed and the total mortgage[after something strange called a 20% down payment] was only 2.5 times our family income. Years have passed. Now we do not have a mortgage to pay. Many, many Americans have paid off their mortgages. More that 90% of mortgages are current. Thus, there really is NOT a major problem for the Vast majority pf Americans.
But everyone has to deal with energy price increases and food price increases. My family has to turn down the temperature and wear sweatshirts inside. We do drive as little as possible . We keep the speed at 55, check tire pressure correctly inflated., etc. Little things do add up. Food purchases are mainly what is on special. Going out to eat is potlucks at church and neighborhood social events. We have continued our tradition to grow our own food, make our own tomato sauces, and other things to save money.
It’s all due to overpopulation, and extravagant lifestyles. I mean really can we keep growing world population at the current clip and give everybody a 3000 sqft climate controled box to store all kinds of useless junk in forever? I also lay blame for this squarely at Greenspan’s and the politicians door. Greenspan promoted free money, and the politicians of both stripes have promoted the notion we all need to spendspendspend instead of a saving anything. Of course base don congresses bookkeeping this is no surprise! As a nation we produce NOTHING of value to anybody anymore. A “service” economy is a codeword for an economy of makework, redtape, and in general being subserviant to nations like China and India who produce the usefull things we need that we used to make. I saw where healthcare jobs now are being promoted as a saving grace for dissapeared manufacturing jobs at a UNC graduate dissertation fair. Right beside a project about how health care costs are eating us alive. I think the irony is lost on acedemia! We need jobs that are not a net drain on GDP but are a net plus for GDP. We need to go back to making usefullthings and buying local. How is it cheaper for “Itoen” to brew a bottle of tea in China and ship it across an ocean at great expense and waste and sell it to me for $2. The pointy head economists with ties to wallstreet have run things way to long. We need some representation in washingotn that answers to real PEOPLE for once.
The concern as it should have been is the debasement of our currency the US$ and impoverishment of the american people. SHADOWSTATS.COM indicates what the true rate of M3 growth and inflation as well as unimployment really are. M3 18%, Inflation 12%, unemployment 13%, GDP -2%. Maybe we start talking reality and not fedspeak anymore. The FED IS KILLING US. How does it feel to be aboard the USATITANIC Going down by the bow while the politicos and FED print money for nothing.
It seems that CNN keeps asking viewers to again and again respond to the same underlying question: Has the news media yet manipulated most Americans into believing that the deinflating housing market is a crisis that requires a bailout? In reviewing the responses here, and in prior research, CNN viewers are repeatedly telling the propagandizing media — It’s inflation, stupid! The American public is NOT buying the media’s “housing crisis,” the ballyhooed bailout plans, or the recession baloney.
PS: We didn’t buy the media’s justifications for the preemptive attack on Iraq, either.
I cannot believe how uninformed some of the posters here can be.
I am more concerned about inflation.My house will eventually recover any lost value.
The federal gas tax is 18 CENTS a gallon.Not 18 PERCENT.
Removing this tax means your $3.50 gallon of gas goes down to $3.32 a gallon.This will save the average driver about 2-3 dollars per fill up.
This in my eyes amounts to nothing.However it will deplete the funds for road repairs.Which we cannot afford.The roads here in Milwaukee already look like a third world country.
Please, people get informed before you post.
Talk about being out of touch with reality!! How is it now just dawning on Washington, the Federal Reserve, Wall Street, and our candidates that we’re in a recession and inflation is a concern? Crude oil prices have been rising since late 2005? From an avg. of $1.20 per gallon at the pump to $3.25. The price to transport, produce, manufacture is all effected. The cost of the war hasn’t affected the economy? They haven’t taken any lessons from the 1970’s oil crisis! It’s about oil prices. Period. Come up with alternative energy sources (it can be done without sacrificing crop production),reduce our dependence on oil and inflation would not be a thought.
Get their heads out of the sand, keep their hands in their pockets rather than holding them out to lobbyists, work together rather than along divided party lines, represent the interest of their citizens rather than their own self interest and we would solve some serious issues.
As oil goes, inflation goes and that’s what affects us most.
Bitter? You bet I’m bitter. Barak may have not said it well, but his comprehension was dead on.
The CPI is outright fraud by the FED. Yes, if you take everything that goes up in price out of the CPI you have no inflation…go figure. Also the substitution model they use to calculate the inflation is severely flawed, steak goes up in price, so I substitue it with what? Dog food?
As far as house prices are concerned let them crash, nobody would complain if milk or gasoline prices would collapse, right? Some greedy speculators and banksters will lose their shirt, for the rest of us it is welcome relief.
Hey everybody, according to the reuters report today, the housing market is the worst it has been this CENTURY
Nothing like the press and the media creating more hype than it has too! I got news, my grandmother lived in a SOD house, now THAT is a housing crises
INFLATION! If I buy/sell a home, my buying power elsewhere is level. If my house is down, so is the next one I buy, etc. And shame on people for “living” off of home equity. So the housing issue really only applies if one buys or sells. But what about day-to-day living? This is the issue. And this will kill the engine. Every dollar extra spent on fuel, food, etc., is one less dollar to save or spend in the economy.
Gas and food prices are going to go up, no matter what. But the economy is bad bec of the credit mess. NO BAILOUT! As cold as it sounds, the sooner that we get these people out to the streets, the faster our economy can start recovery from this mess. The more we help these greedy people who are addicted to easy money trying to keep up with the Joneses to show off their pretend wealth, the more we are dragging to keep the economy down. In the end they did not lose anything anyway, except for prolonging to display their fake wealth. They never own their houses anyway, the banks owned them. So time for them to hit the streets and learn their lesson to live within their means. Their addiction to easy money will hit them hard. These kinds of ignorant and greedy people are the very reason why we are suffering with a bad economy. True, the lenders prey on these ignorant and greedy “victims” but no one forces them to sign the dotted lines. Isnt that what capitalism and democracy is all about? They did this to themselves. IGNORANCE & GREED is never an excuse. Let the greedy, ignorant weaklings fall.
Taking the energy and food cost out of the “core” PPI is like saying that if we didn’t have troops on the ground in Iraq we wouldn’t have a war. Very stupid. Consumers know full well that inflation is rearing its ugly head.
When you think about it, this is the makings of a really cool Si Fi flick. We are using food to power the cars of the rich while the poor are starving and rioting in the slums.
“I just want to know when will the revoultion begin?”
Prices do have to increase overtime, if we expect to get real wage or income growth. Not everything can improve due to increased productivity. Corrections like we are seeing, now, are a normal and currently people are just not use to normal market cycles. For too long, fuel prices have been too low and in response, people purchased bigger, more powerful vehicles(and homes). Well now it is back to reality. We are using fuel that has a fixed source, which will result in a dimished supply in the future. Prices will have to rise to deal with the eventual lack of supply. The best thing is that the current fuel price increases will force people to buy more fuel efficient vehicles(maybe right sized homes), which will lower total usage, and thus lower the price of fuel in general. When that happens, the cost for diesel fuel, which controls farm production, and truck distribution, will come down again, and food prices will lower in response to a lower cost structure. The only way to improve the economy, and lower food and fuel prices, is to use less fuel.
How do we change the future. Convert the US fleet to more fuel efficient vehicles. Maybe a 50 cents a gallon gas tax would help. Improve efficiency of home construction(or rehabilitation). Stop using so much electricity during the day by adding grid tied solar power. The million solar roof plan, from a decade ago, was a start, now we need to multiply that by at least 20 times which would cover more than 10% of the US homes.
The housing market is a combination of greedy bank sales, people speculating on the housing price increases, and essentially giving houses to the people who could not afford them through the sub prime mess. All of these things contributed to the run up in housing prices. This housing market correction needs to happen if housing prices are to be brought back in line with real wage affordability. It sucks to live with a bubble, but the market has to deal with it, just like it did with the Dot.com bubble. Some houses will be forclosed, just as some businesses failed. Only the last time speculating investors got burned. Also, thanks to Nortel, I think that I learned my lesson. Maybe it is time for the rest of the country.
Lastly, for all of those people complaining about “recession, stagflation, or depression”, you obviously did not live through the seveties. We are not even close to that, gee, we have not even registered a GMP down turn, so stop complaining. If you want some real pain, just think what it would be like if there was 9.5% unemployment(11% in Canada), and interest rates are 14-18% per year. Then you start to car pool because you can’t afford gas. That seems a bit more difficult than today. So everyone should stop wining and suck it up. Stop spending so much money that you don’t have, and put some money in the bank for the future. If you had more than 6 months of house hold expenses in the bank, you should be able to survive that redistribution of wealth, jobs, and market conditions that we will be going through. Maybe it is time to re educate youself and create new job skills. It is time for change, and if you dont change, life will run you over.
I am more concerned with the rising prices of oil and food. I cannot foresee being able to afford to buy a house here in South Florida ANYTIME in the distant future. Taxes and homeowners insurance most times are equal to or more than the mortgage. With the commission portion of my income shrinking monthly, I will be using my “gift” from W to pay May and June’s car payment. After that, back to GMAC it goes. I refuse to shop at WalMart due to their practices of screwing their employees and inflating the economy of China. And yet, we continue to fund W’s personal war in Iraq. God Help America!!!
I’m far more concerned about inflation. The correction in the housing market was inevitable since the price of housing was far exceeding increases in real wages. Now we have a more affordable housing market, but because of inflation we still have pressure on real wages which are not going to rise soon.
Falling home prices hurt homeowners. Rising comodity prices hurt homeowners and everone else.
It is the inflationwe need to stop first. then the rest of the economy will right itself.
Inflation is the biggest worry by far. For anyone who is using a 401k for retirement, look at how many gallons of gasoline it would buy in 2001 versus how many gallons of gasoline it can buy today. If someone is planning for future spending, their target asset number needs to be twice what it was when George Bush took office. If inflation keeps going at current rates, 2x will become 3x, 4x … Argentina …. Inflation is compound devaluation. The Fed and the federal budget deficit are forcing all Americans to need to have more socked away when we hit 65 or to move assets out of US dollar based investments?
Right off the bat the demo’s start hacking away at a “GOOD idea! McCain’s idea would work, all of it, why do we need millions of barrels stored under ground in Texas!
In China – right now folks, – they have built highways galore, google china highway, and notice the big city bridges and gorgeous road ways, then see that something is MISSING – there are no cars on the ROAD! Oh my, some people might lose their jobs that work for the highway department – oh please – IF Buisnesses have more money, there will be more jobs all around,
Someone is talking some since, but since its McCain – it won’t work – hum wonder if Obama would have suggested it?
People who want to move and are afraid they lose money by selling their houses need to go back to grade school and study math. If you sell your house at a low price and buy a house at a low price then you did not lose any money! How difficult is that to figure out?
Inflation. I remember the hyper inflation of the 1970s and early 1980s. That was an extremely painful and difficult problem to deal with. It took a decade of high interest rates to get it back under control. Inflation is a much worse economic problem than a plain old recession. We are likely to have stagflation for a good while if we allow inflation to get out of control again. Where is Paul Volcker when you need him?
is anybody listening out there! remove the gas tax and pay under two dollars a gallon tomorrow – wow thats hard -
The rate cuts are only helping the banks who helped caused this mess in the first place. They are not passing the lower rates to the consumer. Housing is a long term investment and will work itself out. The main concern should be strengthening the dollar. But then I’m sure there will be another way to manipulate the oil market in order to keep prices high.
I still have to say, I blame the Fed, banks and financial experts for BOTH problems. The banks should’ve known better than to give huge loans to people whom they knew couldn’t afford it. CNN reported some of the loans that defaulted and to whom they were given. One in particular was a $400,000 loan being given to somebody making $19,000/yr – even I know that’s going to default.
Fast forward to now, the economy is turning around the bubble is bursting and people are defaulting on their loans. The Fed is flooding the economy with money by dropping interest rates trying to stimulate the economy and in doing so sending inflation through the roof.
The insult to injury on the whole thing is that the government is bailing out the same stupid bankers who made the dumb decisions to take on these high risk loans, but the people who received these loans are still losing their homes.
paul, how about telling americans more about this, because this is the only way we can stop the bleeding in the houseing market.
it is very simple, 40 percent or 50 persent is better than a forclosing and american would still be paying taxes,and not liveingif it aint MR. POTATOHEAD, LOOKS PRITTY SCARED DOENT HE. ITS FUNNY TO HAVE THIS INSIDER OF WALLSTREET HAVE SO MUCH POWER..
LISTEN IF THEY ( CONGRESS) WOULD DO THERE JOBS WE WOULDN””T BE IN THIS MESS.
ANYONE THAT TOOK OUT LOANS FROM 2000 TO 2007
REGARDLESS OF WHAT THERE CREDIT LOOKS LIKE RIGHT NOW, BECAUSE OF THIS MESS MOST HAVE LOST THEIR GOOD RATING.
THEY NEED TO COME OUT AND TELL ALL MORTGAGE COMPANYS
TO RE-FI EVERYONE NOW. NO EXCEPTION IF THEY HAVE A
MORTGAGE THAN TAKE 60% OFF THE BALLANCE AND RE-FI THEM AT 1 PERCENT OVER PRIME AND STOP ALL THE BLEEDING FOR ONCE..THAT IS ALL THAT HAS TO BE DONE, SIMPLE,FAST,AND IT WOULD STOP ALL FORCLOSEINGS,BURNINGS OF HOMES,AND STOP 10””””””””S OF MILLIONS FROM BEING ON THE STREET..
THIS IS MORE INPORTANT, THAN THIS ***.
OR HOW ABOUT REPORTING THAT WE THE PEOPLE WANT TO KNOW THIS FROM CLINTON AND MCCAIN. WHAT DO YOU WANT TO SAY TO THE 374,298 AMERICANS DEAD,HURT,MAIMED IN THIS WAR YOU SUPPOTED FROM THE START..HOW ABOUT ASKING THEM THIS
and how about the numbers of our troops how about exposeing that to the media, ask old bill no spin to put a spin on that number.
Since I have no plans of moving and don’t owe that much on my house the “worth” is just a paper number. Inflation however is something we have to deal with every day. Our earnings aren’t rising and investment income is getting swallowed up by inflation. Food, fuel, and taxes are hurting badly.
Food and Energy are far more threatening than the crash in the housing market. If you have owned your house for 5 years or so, the mortgage is not outrageous. BUT food and fuel are everyones problem.
Those who bought houses when the prices were through the roof helped fuel the very problem they are now crying about. Hey, take your forclosure and next time, act more resposibly.
I just happen to be in South American for business purposes and it amazes me that I can hear the “whining” North Americans all the way from here.
We North Americans want everything and we want it now. What about sacrifice, endurance and solution minded thinking? The Generation before us needs to be listened to because they fought some battles which were won based on these great qualities! One of the reasons we are in a fuel crisis now is that we refused to listen to the experts over 30 years ago (National Geographic-mid 70’s) that we needed to become less dependent on foreign fuel or we would be their slaves by the next millenia. Well, hello! Here we are- And housing market-let’s haul ALL (not just one to scape-goat)the CEO’s and CFO’s who came up with their brillant money making schemes , take their money away and pump it back into the economy. No wonder the rest of the world looks at us and sees “adolescent self-centeredness” gone WILD!
I am much more concerned about inflation than recession. Food prices are up each time I go to the local grocery stores. Most of Americans are on fixed incomes which makes it hard to keep up with the rising prices.
I have resorted to riding my bike everywhere to save on gas. Problem is, now I need to eat a lot more food.
And can you imagine how embarrassing it is when I go shopping and park my old bike in front of Neiman Marcus? So now I have to buy a better bike – hmmm… perhaps a Yeti 575 with carbon stays would look better.
Golly, life is tough enough to figure out without having to be frugal too.
we are on fixed income. we bought our home which was greatly inflated due all the greed and easy loans that was out there. our taxes are very high because of that also. but we manage to pay our mortgage. very difficult when everything else is going sky high due all the government mismanagement going on etc. we don’t fell we should be forced to bail anyone out. let housing
prices CRASH so younger people can again afford home for their families.
turn any stimulus package into alternative fuels- but not ethanol.
that is a stupid government program that helps food prices soar.
I am more concered with gas/oil and food prices. As I bought a house well within my means, at a fair price with a fixed interest rate the payments on my house are not rising. The weekly food and gas prices that are rising at such a fast rate that I can barely keep up. Some please tell the Fed not to lower the interest rate anymore. It’s obviously not solving the problem, it’s making matters worse.
Housing prices have me more worried than anything else. While we can afford our mortgage just fine, my husband and I had planned to move someplace nicer (with decent healthcare and schools) before having kids, but now are stuck with a house worth less than we owe and no way to sell. However, I’m not sorry that the housing market crashed since there were a lot of bad people taking advantage of a lot of stupid people and they both got what was coming to them. Justice can be bittersweet.
As far as food and gas goes…I hope gas continues to go up. Like the housing market, tons of people bought monstrous gas-guzzling cars and now they want the government to bail them out because they can’t afford all the gas they use. Meanwhile they criticize all the people who bought houses they couldn’t afford. Isn’t irony grand?
The housing crash is a correction, It is a sad fact of life, if you let people keep pushing the prices of houses up to unrealistic values and you build your hopes on that fantasy, guess what,”Reality”, you will lose…
The price of food and energy are paramont. Oil, gas, natural gas, propane, being driven by speculators, causing a chain reaction of increasing prices to everything. That is placing the burden on the working class families. Wages have remained been dorment, Wake up Bernanke, Its called Inflation!!!!
As a retired person, I am most concerned about inflation. It is ridiculous to omit the cost of food and fuel from the CPI. The result is a serious shortfall in the adjustments to Social Security payments which are based on the so called “core” inflation. I am reminded of this disparity everytime I drive to the supermarket to shop for food.
Neither…
Rising commodity prices may shock us into conservation and move us away from our wasteful lifestyles. My wife and I have been slowly moving toward compact fluorescent light bulbs, and when our washing machine just died, we bought a very energy efficient front loader. I bought a $20 device that tells you how much energy something uses and I have been unplugging those vampire devices like our vcr (that I haven’t used for 3 years) that uses 5 watts per hour (43.8 KWH per year) to run the darn clock (set at –:–, by the way). It all adds up. I have seen a consistent drop in our energy bill even as “per unit” prices increase. I slowed down on the highway, no longer race people at stop lights and received a 15% increase in fuel mileage for my trouble. I get to work at the same time and incase you are wondering, I drive a V6, not a Prius.
A drop in housing prices may shock us into living within our means. We should have cut back on spending decades ago, but people went into debt and cashed out their homes to keep up with their neighbors and co-workers. Who cares; are you really happier as a result of that THING you couldn’t afford? We certainly are not a “rice and beans” family, but there is a lot YOU do that isn’t where our happiness is.
Another note: Our recycle bin usually has more stuff in it than our trash can. And we have a son, so don’t say it cannot happen. It doesn’t take much effort.
I must say that NEITHER political party can help you as much as you can help yourself. And as a republican, conservation and reason should not be politicized. It should be a personal responsibility of everyone, including the hypocritical politicians.
Real estate needs to and will continue to fall. If you adjust for inflation over the past lets say 125 years the average home price has always been around 105K. Only in the past 8 years has real estate ever been considered an investment. Look at Japan, perfect example. They had a massive real estate bubble just like the US had. Japan’s real estate fell for 15 consecutive years before it leveled out. With all that said get over the real estate problems and let them fall. Inflation is the real concern. When the same bills are costing 300-500 dollars more a month than a year ago there is a real place for concern.
To me, the world just feels like it’s about to explode. Indeed, it already has in places like Haiti, where they are protesting because they cannot put food on their table, and they are already one of the poorest countries as it is! $113 oil, $3.50 gas, corn, wheat, soybeans, bread…all the staples of life are absolutely soaring. This is very unsustainable. The question is, will the “correction” be gradual, or will there be a worldwide crash in commodity prices the likes of which the world has never seen? And what will cause it? A massively unbalanced market coming back into balance on its own? Or central bank and government intervention? These are truly very scary times. As soon as I get my rebate check it’s going directly into the bank…or better yet, maybe under my pillow. If Armageddon is around the corner, I’m going to need some money for a safety net. Let’s see, lower interest rates: strike one. Rebate checks: strike two. We’ve got one more shot, then we’re out. Hopefully that last idea is simply this: let free markets work, stop government and central bank manipulation. NO MORE RATE HIKES!!!!!!!!!!!
I am more concerned about food and gas prices, because I live on a fixed income. (I hate the way we used the term “fixed income.” We all have a fixed income, generally set by our employers right? It isn’t like we are all going to get monstrous raises this year, or accidentally fall into a pile of millions.) Sorry…back to the issue.
As a renter, however, I am concerned about the foreclosures. It is putting more pressure on rental unit prices here in Florida.
Still, when it costs $40 to fill up my little Honda, all I want to do is scream at Congress to end the big oil tax breaks.
YOU REAP WHAT YOU SOW! The best thing (and the only solution) for this country is a housing market crash! The longer it takes to crash, the more responsible home buyers suffer. The Fed just made it worse by supporting the speculators who are fully responsible for this housing bubble, but a housing crash is INEVITABLE! Remember YOU REAP WHAT YOU SOW!
” In the past few years, as house prices were riging, my wife and I would always have the appreciation to fall back on. This gave us confidence to make those extra purchases. ”
That says everything.
This is why I think house prices falling back to historical appreciation levels is, in the long-term, the best thing to happen to this spend-now, pay-never consumerist culture.
The high cost of housing is particularly bad for business because employees demand higher wages to pay for their shelter. It is difficult to compete against countries that can produce products ten times cheaper than us simply because their workers only pay an average of $50 a month for housing. The FED providing more liquidity only cause the price of homes to go higher and thus wages. While rising food and gas are
difficult to handle, finding affordable labor will become impossible. I wonder if our gov’t can figure out which one is better: people without jobs living in homes that they can’t afford or people with jobs living in affordable homes.
The problem besides the banks loaning money to people who shouldn’t have it and the people buying houses they couldn’t afford is that the Democrats took over the Congress a year and a half ago. When the Congress was Republican controlled gas was $2.17 a gallon..under Democrat Congress $3.40 and up up up. People better wake up if they think a Democratic president is going to help anything after your democratix Congress has us in the problem now. Just wait
I’m retired and trying to live on Social Security and investment income (13% in stocks and the rest in savings). I worry about food and energy prices, inflation that erodes the value of my savings and the lowering of the interest rates on my savings due to the Federal Reserve lowering the interest rate. As a result, I have to cut back spending to avoid spending capital that I can’t replace. My cutbacks and those of many other retirees show up as reduced consumer spending.
In response to cleaner44, one might have thought Andrew Jackson put an end to bank of the United States but, as experience shows, never count a bad idea out. The Fed is the third Bank of the United States, manipulating the money supply for the private benefit of a cartel of bankers.
Since I do not plan to move, I am more concerned with rising food and energy prices. However, as far as the Fed is concerned, don’t eat and don’t drive and then there is no inflation. To their way of thinking only bankers and Wall Street brokers count anyway, so what is the problem? Don’t worry, be happy.
Actions to recovery:
1) Drive 55 mph.
2) Switch to a motor V6 or less.
3) Car pool
4) Stop eating out.
5) Grow a garden.
6) Stop driving on weekends.
7) Turn in the cell phones and PDAs.
The gas prices are driven up because the “housing market” is not longer a place to put your money. The oil prices are driven up by our own investing. Change some habits or stop whining about it.
Anybody who has not been on a 4 year fast, does not live on the street and has a motorized means of transportation knows that the core inflation number is a joke. Food and energy have far outpaced core values over the past 4 years and have far outpaced wage increases. Exception’s are fat cat CEO’s, hedge fund managers, and most of the shisters who control congress(i.e. special interest), the banking system, and in general the controllers of the common man’s life. Our righteous leaders have seen fit to make to not only enrich OPEC but now the subsidized corporate farmers of America while John Doe has governmental mandated ethanol crammed down his throat. That in turn has caused food riots around the world as well as driving the inflationary locamotive down the track. Yes my friends, that light at the end of the tunnel is about to flatten you as you are now making choices as to what to buy at the grocery store while adjusting your thermostats and shopping for your next commuter vehicle—a moped. Add in 48 million uninsured health patrons to a system run by corporate greed(non profits included) and you have a potent mix waiting to spew into the streets of the nation that will make Watts, Detroit and other past riots look miniscule by comparison. This is a great country if you’re rich. If you aren’t you better find a way to screw somebody, cheat on your taxes, or prepare to lower your standard of living because it’s not getting any better in the forseeable future. Just remember, your politicos have your back. Both parties have gotten us in this mess. Nero fiddled while Rome burned. Perhaps if John Doe would do the unthinkable and vote against every incumbent for a time or two the message would get through and our sanctimonious leaders would try to do something for the good of the masses and not themselves and their muck raking friends.
I live is a rural area in Michigan. Gas as of yesterday is 3.60 a gallon here. Not everyone has the availability of mass transit. My savings and those of millions of other people that were frugle and saved, rather then lived beyond their means, are being eroded by the policy of the Fed to bail out millionares who were caught with their pants down when their ponzi scheme in the housing market collapsed.
there are other places to live besides houses. But we all need food and gas, so THAT is the real issue. People who can afford the mortgage payments shouldn’t care about the value of their home, at least they have one. There are people who can’t afford to feed their families or fill their tanks up with gas. Until this country grows “some” and just nukes those OPEC $#$#*@!)s and take the oil that is ours, we are not going to get in any better situation. GROW SOME AMERICA AND TAKE WHAT’S OURS!!!!!!!! Or just blow them up.
It’s simple. I predicted that food would go through the roof because of ethanol. This was to give oil some competition. I’m sure I wasn’t the only one this made sense to. People are not as dumb that they buy into this stuff. However they are not doing enough about it either. Anyone with common sense had to know the outcome. However a lot of people are making a lot of money at the consumers expense.
Let them keep going, driving up the oil prices and watch what happens. The consumer will be forced to cut out all other expenses and this = economy busted. Great job to all the leaders, without them this wouldn’t have happened. We elect these people and we should be able to get rid of them just as easy.
This country can grow enough food to feed what 2/3 of the planet? So why do we charge our own people so much for food? Why not barder for oil with food. Oil is only worth as much as people will pay for it, however everyone has got to eat. I say no more food leaves this country without being paid for. Let some of the other countries try to eat their oil and then come back to the table to talk. What our leaders are doing to this country is rediculous and should not be permitted. Also why do we have soldiers in the rest of the world protect other countries like Germany and Japan without them paying for the protection? What a waste of tax payer dollars. They can afford it but we cannot pay the bills for the entire world without getting back most or all of it. Talk about driving up the dept, what about our kids that will someday need to start re-paying it. I’m going to assume this comment will probably not be posted however people do have the right to know the real truth.
I’m much more concerned about food prices than energy and housing prices: everybody needs to eat. This is the result of too many people chasing too little food. Fortunately, most people spend little of their budget on food, and many of them can improve their health by REDUCING their food (CALORIE) consumption. Also, we need to reduce the population to take the pressure off food prices, probably by reducing immigration, especially illegal: just too many people.
Energy is tougher, but keep in mind that this word is often mistakenly used in place of O-I-L. Oil prices are controlled by a cartel: this is NOT inflation. We need to reduce consumption and bring on our own biofuels (not imported, not controlled by oil countries or companies). Natural gas price tries to peg to about 60% of the oil price. Coal is very cheap, and so is electricity, both of which are not linked to oil at all.
Most Americans benefit from lower (not higher) housing prices, and this correction is already well underway. We need cheaper housing to free up money for other needs and help our global competitiveness.
I’m more concerned with the fall in house values. In the past few years, as house prices were riging, my wife and I would always have the appreciation to fall back on. This gave us confidence to make those extra purchases. To me it was the classic case of “the wealth effect”. I’m not as concerned about oil and food prices as we can always consolidate our trips or shop at Walmart, etc.
Those of us who bought a home within our means, are making the monthly payments and now have to sit back and take a double whammy on the chin, should just up and quit or go on strike.
The price of food and other commodities is going up while we bail out those that shouldn’t be helped. No one told anyone to purchase a $150,000 home for an inflated price of $250,000 on an Adjustable Mortgage Rate loan. They did it themselves with the help of goofy greedy bankers. For every dollar the Government spends bailing these people out, the banks should give me a dollar off my loan. I would have my house paid off in a few years.
Let housing prices CRASH and let the people that lied about their income to buy more house than they could ever afford get what’s coming to them (a nice foreclosure notice and horrible credit). Same for the lenders that took advantage of borrowers – let their record profits turn into record losses. Prices are way out of line and should never have gotten this high. I rent, and will probably continue to rent for a long time. $1,800 to rent a new luxury townhome or $3,000 to buy. Gee, anybody else see the drastic disparity in the cost of renting vs. cost of buying? That alone proves the point that prices to buy are just way too high…
I’m most concerned with energy and food prices. My one and only passion is Motocross…and who knows if I am going to be able to afford it as prices sky rocket? I travel a lot for work, so gas prices hurt, but aren’t horrendous…though I do drive a SUV with a V8 so city mileage is bad (but so far, still worth it). My fiance and I don’t have children to feed, so food hasn’t impacted us that much yet. We still eat out quite a bit, but again, if things keep heading higher, we’ll have to curtail our spending and make sure we put even more of our money into savings “just in case”…
Sybil – well said. The only thing I can add is that I hope we stop taking money from one pocket (the responsible consumer) and giving it to another (the folks who bought homes/televisions/etc. that they couldn’t afford) in the form of federally sponsored bailouts.
I agree about cheering on the declines in housing prices. But I don’t feel sorry for people who were too stupid to realize they were taking on a loan they couldn’t possibly afford. My feelings for the speculators are even less kind. As a renter in a crappy CA neighborhood, I don’t want my taxes going to relief for people whose standards of living are much better than my own, even though common sense should have told them they couldn’t afford their lifestyle.
As for food and energy, we are already experiencing the next bubble. Are we ever going to come to our senses and realize that republicans, when in majority control, basically throw a big party and trash the whole country? Time to get a democrat in there to clean up the mess just like after the last time a Bush was president.
I agree with Sybil. Gas is still very cheap, judging by the way folks drive around here. Everyone drives about 20 mph over the speed limit and jack rabbit starts from traffic lights are the norm.
the fact that you call fisher your favorite fed, demonstrates how very little you understand about the economy. The economy as of Jan 7 was in intensive care, it was heading for a crash the reality of which could have utterly tanked us. Bernanke provided the paddles to jump start and give a needed jolt to the economy. Yes everyone agrees that it was a temporary move, but had it not been done – we would have been in a free-fall that might possibly have been a fatal blow.
Fisher is a thorn in the flesh of this economy – he truly needs to shut up. His attitude of just let it wash out, could have washed us all out. Perhaps we are now out of intensive care and now possibly – hopefully entering into the recovery room. But even common sense tells us that when someone or something is in critical care – YOU DO WHATEVER IT TAKES TO HELP IT SURVIVE, and Bernanke did that.
It has not been about inflation STUPID it has been about salvaging an extreme crises produced by greedy people. Greenspan being the chief of all the greed, he had every oportunity to address the issues five years ago and failed to do so – so Bernanke inherited his mess.
I am not a McCain fan, but finally someone has addressed a REAL solution in solving the PRESENT inflationary problem; and that is the REAL root of the moment – yes this would be another stop gap procedure, but in the recovery room, stop gap measures are what is needed in order to stabelize someone in a touch or go situations! SUSPEND THE GAS TAX! Unfortunately McCain does not go far enough. Almost fifty cents on the dollar at our gas tank is tax. Forget giving me a refund that I have to wait months for, give our truckers a break, give us a break NOW – and watch inflation come to a grinding halt – as food prices drop, because diesel goes down, watch spending re-occur as we put money in target instead of our tank.
Much of the tax goes to repairing our roads etc. Who cares if the roads are free of potholes, or if we continue to build our supper highways as they are doing in Texas – if we cannot afford to drive on them?
La Monica, make yourself really useful and write an article on how much and where our tax dollars we are spending at the pump are going – and start a movement to really put money in our pockets.
Amen to Sybil’s comments. Imagine the consequences if we actually tried to prop up 10 months of housing supply to these unsustainable, nonsensical levels.
Jerry, I agree things are hard–I feel a difference and I already never eat out, I bike and run to work instead of drive, etc. I am sure it is not fun. But seeing people bring big LCD TVs out of Walmart, driving big trucks and SUVs aggressively, and eating out a lot (watch that diet!) has made me wonder if people don’t feel entitled too much for the amount of value added their work contributes. Things just seem a bit out of line. I hope people will make the necessary adjustments and we will get back on track–on a better track.
I’ve had enough of the Fed trying to bail out the banks and people that weren’t smart enough not to buy houses they couldn’t afford. You need to stop cutting rates and let the dollar rebound to keep inflation from getting any worse. This country is never going to recover if inflation keeps the food and gas prices through the roof
In the Midwest, our home prices are rising and our economy is on the move. We are being penalized for poor decisions by East Coast banks.
What concerns me the most is that our nation is manipulated by the Federal Reserve. The Fed inflates our money supply and continues to weaken our dollar. My expenses are going up as prices are increasing and the Fed is pushing artificially low interest rates.
The United States was never meant to be controled by a private banking cartel. I wish everyone would take a moment to ask themselves a question:
Why do we need a non-elected, non-government body creating our money supply and charging us interest to do it?
The Congress has the power to coin money and regulate the value thereof. Moving this power from the people’s representatives in Congress to private bankers, helps only one group of people and it is not the citizens of the United States.
The cost of living that is food, clothing and energy prices will bring down the US economy. What difference does it make if home prices are going down if we can’t afford food, clothing and energy.
Shopping for lower priced consumables imported from China only means you better have health insurance coverage.
Having been concerned about a “major ecomonic drop in the toilet” as far back as 1989, we have very few concerns with either. Our property is paid for, we raise our own milk, eggs and meat and don’t go into town much. Good luck world!
Hmmm, sure sounds like every major wartime environment we’ve been in for the last 100 years. Too bad nobody remembers WWII to figure out controls must be placed on commodities to keep inflation in check. Then again maybe the govt has figured out a way to get more taxes to fund thier war and volitility in the market is what they want. Hmmm.
As the sole bread-winner of a family of four, food and energy prices are what hit my family the hardest. The falling value of our home is not welcome either, but we purchased our mortgage last October with a Fixed Rate and the realization that the economy was on a downward trend. I can budget for fixed bills rather easily. It’s the unpredictable rise of food and energy that continue to eat away at any discretionary income I may have. Further, paying down extra debt is hard to do when that money is being used to put food on the table and fill my tank so I can get to work. That solid financial ground that other middle-class families and I used to walk on is becoming more like quicksand on our way to increased debt and decreased stability.
I am worried about inflation. I saw what happened in the 1970s when inflation was over 10% and in the early 1980s when the central bank pushed borrowing rates up to 19% to get inflation under control. The economy was a shambles and jobs were really scarce. It was a lousy time. If central banks act now to get inflation under control (and this means higher interest rates) we won’t have a repeat performance.
The Labor Department reported a jump of 1.1% in wholesale prices, in March, the second biggest gain in the past 33 years and much higher than forecasts.
What a bunch of nonsense.
Over the past few months, gasoline has gone up 10% 3.15 to 3.49,checkout at the supermarket also up about 10% since the beginning of the year ( price of a bagel went up 15%). Exactly who are these numbers being sold too. 1.1% I wish that were true.
Worried about falling home prices? I’m cheering them on! Down down down! The median home price being out of reach of the median wage earner is not sustainable and bad for the middle class. I am sorry that so many people borrowed on inflated prices and now can’t pay back the money, and more sorry that so many people took out loans they couldn’t afford to buy houses they couldn’t afford relying on continued irrational inflation of home values. But, in the long run, housing prices are “correcting”. And “correct” is when the median house can be bought by the median wage earner.
As for inflation, food and energy are too cheap. As evidenced by the amount we waste them. Solution: Work more, consume less.
But I am just a stupid woman who owns her own job, doesn’t speculate and doesn’t carry debt. So obviously I don’t know how the world “really” works.
Food and energy are the most concerns in my area. Buy American is hard to do when everything is up 40% except pay checks. It gets to the question do I buy food or gas. No extra for dinning out or vacation. I don’t shop Wal-Mart yet but the prices are sure looking good lately. Feds had better get something done soon or the poor and lower middle class will not be able to afford gas to go to work. Much less keep food on the table. God bless America.
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Understand what the Fed really is and how the money economy works. Google for “The Money Masters” on Google Video.