If you are 25-35 you should read this Forbes article. I basically followed this formula and am on the path. How to retire a millionaire in its simplest form. Add some of your financial life shortcuts to this for us to share.

djrocksteady

You skipped the step where you check that an English degree will get you more than minimum wage. Don't feel bad, colleges make it very easy for students to forget that step, in fact they mislead about wage potentials and encourage advanced degrees in fields with no demand.

djrocksteady

Can you recommend any good investment book, I feel I can see this all happening but I have no knowledge of how to position my money.

djrocksteady

From the article:

Whether deflationary spirals can actually occur is controversial.

You are asking me to acknowledge an imaginary phenomena? That certainly was Herbert Hoover's view of the depression, that lowering prices were evil, but there isn't much evidence to back that up. You want stable money preferably, but a bit of deflation isn't as bad as a lot of inflation.

djrocksteady

You must remember that many of the railroads were fraudulent and heavily government subsidized. The bust was inevitable due to the misallocation of resources.

djrocksteady

The Panic of 1873

Fifty-six thousand miles (90,123 km) of new track were laid across the country between 1866 and 1873. Much of the craze in railroad investment was driven by government land grants and subsidies to the railroads. A large infusion of cash from speculators caused abnormal growth in the industry as well as overbuilding of docks, factories and ancillary facilities

Crash of 1929

The key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom. It was this inflation of the money supply that led to an unsustainable boom in both asset prices (stocks and bonds) and capital goods. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a significant economic contraction was inevitable.

Crisis of 2007 - 2010

Lower interest rates encourage borrowing. From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6.5% to 1.0%. This was done to soften the effects of the collapse of the dot-com bubble and of the September 2001 terrorist attacks, and to combat the perceived risk of deflation. Additional downward pressure on interest rates was created by the USA's high and rising current account (trade) deficit, which peaked along with the housing bubble in 2006

Surely the similarities between all three events (expansion of credit prior to unsustainable boom of investment projects) have something to do with the cause?

djrocksteady

Yeah that link was a good find..as a young journalism student, I am learning the importance of having a variety of credible sources to back your claims. There is a lot of pro-inflation propaganda out there that needs to be dealt with!

djrocksteady

I'm confused, are questioning the validity of the Wikipedia data or the application of the data by a group of people? Is this an ad hominem attack or general denial of history?

djrocksteady

Deflation is always made out to be a bad thing by the inflationistas. History shows real wage growth and lowering prices during deflation, hardly a consumer nightmare. However, big business and government have an incentive to work against this, hence the constant inflation.

Historical experiences with deflation accompanied by a decline in economic activity, however, are not the only ones we have had with deflation. During the last quarter of the 19th century, roughly 1870 to 1900, prices on average went down modestly. Yet, that was a period characterized by appreciable economic growth on average in the United States. And many other countries around the world over those years had a similar experience. The last quarter of the 19th century was a period of modest deflation accompanied by, on average, appreciable economic growth and rising per capita incomes.

Source: Federal Reserve Bank Of Minneapolis

It's not just the "crazy" Austrians saying this

djrocksteady

There are a couple reasons I think his comparison to the Panic of 1873 are way off.

Panic of 1873 was limited to a couple of key industries (railroads mostly), and unemployment was not a key concern. The main issue was falling prices and low growth, two things that don't really hurt consumers as much as they hurt producers and governments. (less profits, less taxes). I would guess that it was much more plesant to be around during the "Long Depression" than it was for your average Joe during the "Great Depression".

Today's problems are much more spread throughout the entire economy, from housing to banking to auto-manufacturing etc..Our problems are also different, extremely high debt levels and high unemployment.

So I fail to see how we are more like the panic of 1873 than the crash of 1929. We pretty much did very similar things in 1929 that we did in 2008. This bit about the 1873 Panic shines some light on all "mysterious depressions". Credit bubbles all over again...

In America the speculative nature of financing due to both the greenback which was specie issued to pay for the US Civil War and rampant fraud in the building of the Union Pacific Railway up to 1869 culminated in the Credit Mobilier panic. [Heavily government subsidized] Railway overbuilding and weak markets collapsed the bubble in 1873.

My edited comment from this article posted in the business reddit, seems relevent

djrocksteady

Couple reasons I think his comparison to the Panic of 1873 are way off.

Panic of 1873 was limited to a couple of key industries (railroads mostly), and unemployment was not a key concern. The main issue was falling prices and low growth, two things that don't really hurt consumers as much as they hurt producers and governments. (less profits, less taxes)

Today's problems are much more spread throughout the entire economy, from housing to banking to auto-manufacturing etc..Our problems are also different, extremely high debt levels and high unemployment.

So I fail to see how we are more like the panic of 1873 than the crash of 1929. We pretty much did very similar things in 1929 that we did in 2008. Although this bit about the 1873 panic I think shines some light on all "mysterious depressions"

In America the speculative nature of financing due to both the greenback which was specie issued to pay for the US Civil War and rampant fraud in the building of the Union Pacific Railway up to 1869 culminated in the Credit Mobilier panic. [Heavily government subsidized] Railway overbuilding and weak markets collapsed the bubble in 1873.

djrocksteady

He said he had collected 260,000 top secret US cables in Baghdad and sent them to WikiLeaks, whose server operates out of Sweden. Adrian Lamo, the California hacker he spoke to, handed the transcripts of the exchanges to the FBI.

What a nice guy this Adrian Lamo is, turning whistle blowers into the FBI

djrocksteady

You are both wrong, according to Rolling Stone it was all Bernie Sanders

djrocksteady

This post has the kind of deep thinking you would expect from a politician as well

djrocksteady

Killing all your unemployed workers in a war tends to lead to a perceived economic boom. (unemployment rates will obviously be lower, more jobs etc..)

djrocksteady

It was insolvent, and it collapsed. It no longer exists. It was sold for a fraction of it former value. That is failure in most peoples eyes. I am aware of what Morgan did, but that doesn't qualify Bear Stearns as any sort of success.

djrocksteady

Correct me if I am wrong, but Bear Stearns ultimately failed, which is exactly how the free market punishes losers with bad business practices. I don't typically trust big bankers which is why I don't use them. I can't speak for objectivists or randians, but as someone that is pro-free markets i don't think you have much of a point.

djrocksteady

part of enforcing tyranny is to make sure you control communications. just sayin

djrocksteady

1950 was 60 years ago, and 1913 was only 37 years away from 1950....so it seems relevant. If you are comparing today to 60 years ago, why not compare 60 years ago to 37 years prior to that. I guess picturing the US without income taxes is too difficult for many.

djrocksteady

conveniently forgetting the pre-1913 period?

djrocksteady

? What democracy are you thinking of? The one I know means the majority is free to do whatever that choose to the minority including sending tanks through a city. Unfortunate, but that is how democracy works..tyranny of the majority and all

djrocksteady

TROPHY CASE

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