This is the last article in the series for all of us normal readers. It has been such a fun time looking up the information for these articles, and I hope they have been of value to you, too. This article will cover more terms than prior articles, but this is just like the last leg in a marathon, and so we’ll give it a little kick, and hit the finish line strong.

Any economy goes though its own version of exercises, just like humans do. Economies flex and relax their muscles, and getinjured and heal, just like a human body. Don’t sound too surprised. Economies are made up of the actions of hundreds of thousands of people, after all. Global economics work a lot like muscle groups. One economy might contract, while another expands. One may grow, while another declines. With this in mind, let’s explore the final set of terms in this series.

Contraction

This occurs on business cycle slowdowns, where production slows, and other events, such as bankruptcies and unemployment rise. Inflation tends to fall during a contraction, since people are buying fewer produced goods and services

(wikipedia.com)

Deflation

Deflation occurs when prices and assets continue to fall. The cause of this is widespread drops in demand for goods and services. This is a long term drop. Deflation signals a recession already underway, due to unemploymentincreasing, wages decreasing, and declines in value for such things as homes and investments. It is the result of businesses dropping prices to get more people to buy their products.

(About.com)

Depression

A Depression, in the economic sense occurs when a long term recession precipitated a continued loss of jobs, low production, low sales, , and a high rate of business failures and unemployment. (Dictionary.com)

Expansion

Economic expansion can be thought of in terms of a hot air balloon, and it it like on e, at time. In fact, we have all heard about bubbles bursting. This is a reference to economic expansion. During an economic expansion, business is booming, and these surges in gross Domestic Product continue until things reach a peak. (Then, under normal economic times, business contracts until the next surge. So, the economy works more like your lungs.

So, if we take out the standard expression of a balloon, and trade it for a more organic
model, the economy can be seen to breathe, like a set of lungs. You can imitate this by drawing as much air into your lungs as possible. That is expansion at its peak.

Inflation

When the amount of currency in circulation increases, the value of the total amount of
that currency falls, and prices increase. Inflation can also be the result of a decline in the supply of goods decreases, resulting in a sharp increase in prices. One example of this is gasoline prices. In 1970s, during the oil embargoes, gasoline prices tripled in some areas of the country, and they have never fallen.

More modern definitions of the term have stated that a persistent increase in consumer prices, or persistent decreases in the purchasing power of money, caused by an increase in available currency or credit beyond the available goods and services.

These are both, according to Websters Dictionary. The first is from 1983, and the second is from the 2000 version. (Websters.com). I find both definitions useful, but the earlier version is the one I prefer, because it explains the term more elegantly.

Why? The earlier version explains things more in line with Adam Smith, while the second is more the work of that economic Devil and numbskull John Maynard Keynes. The views expressed in the former statement are mine alone. Thinks what you will, but in the simplified view, Mr. Smith (my hero) thought that markets were made, in terms of supply and demand, elastic and changeable, determined by how much of what producers made and what goods people desired. Mr. Keynes, in my less-than-flattering-opinion sought to determine and control the economy in a more static manner, with price controls, and and other artificial contrivances. Clearly, people will do anything but act is a standard manner. That is why I have little respect for his theories. I believe the thoughts of Mr. Smith more capitalistic and democratic, and Mr. Keynes’ thought tending more Socialistic and closed market, depending too much on services, too.

Recession

Recession can be thought os as two consecutive quarters of decline in real GDP. This isdecided by an austere group, in a think tank called the National Bureau of Economic Research, which is a private organization, and their dating of such occurrences is a judgment call. There is no universal term for what is not a recession.

(econmodel.com)

Stagflation

This is a period of high inflation, coupled with low GDP growth. It is difficult to control, because you have higher prices, lower economic growth and higher unemployment coupled together. You have to focus simultaneously on all three elements to control it. In other words, you cannot focus on inflation or GDP growth alone. Easing credit can trigger runaway inflation, and increasing GDP too quickly can cause overproduction in a market that is hit by higher unemployment, which causes a reduction in consumers.

(Farlex Financial Dictionary)

More simply, stagflation occurs when there is simultaneous stagnation and inflation in an economy.

Stagnation

An economic cycle marked by growth of less than one percent per year.

(investorwords.com)

When the economy flatlines like this, it is like trying to find a cool breeze on the hottest, most windless day of the year. The economy is as parched as your dry, sticky mouth, andnothing seems to slake the thirst. It is though the economy is sweating out value for all of the production it can drink. Unfortunately, we all know that sweat evaporates…

There are many more terms that could be discussed, but it is not my intention to create the most exhaustive economic compendium available. The terms I have covered are the most widely used in the media, and I think that once the mystery is removed, common sense insered into understanding, and proper application of the term ensues we will all be a bit wiser to the tricks the media uses to influence mass hysteria. We have the power over the economy, but only as long as we take the time to understand it a bit more, and involve ourselves in how it is managed.

First, we start with our personal economics, and then enlarge the view gradually, until we can see the effect of millions of people in our national economy. Next, we look for distortions in presentations on the economy and refute them. Third, we take action by contacting those who have macroeconomic power (our elected officials). Finally, we stay aware of what is going on and affect change by doing.

Stay tuned for a new series to follow this one.

Check out the information at this webtsite: Status of Class Action Suits involving Composite Sidings to find out if you are eligible for relief, and don’t delay.

Lou

How you want things to run...

When you are setting up files, an office, website, business, kitchen, or most anything, you want things to go smoothly. You want the tools you use to work efficiently, and easily to make more hassles disappear.

The net effect of hoarding and idle procrastiation

Yet somehow we all do it, and yours truly is no exception. Somehow, over the years we leave something out, lay something down, procrastinate for a while, and before you know it, we have hoarded and pack-ratted stuff away, and half the stuff we have kept we don’t use. This is just as true on the internet as it is in a closet or [Heaven forbid] my basement. We got this tool, or used that application ONCE, and didn’t like it but kept it. Repeated over years, and we now have a shelf full of software that is useless to us. We started blogging in one forum, but later-and-later-and-later… discovered that we liked the next blogging tool better. We Tweet, and Tweetdeck, and Peep, and push content to the Internet at an alarming rate; sometimes so much that we cause problems for Facebook, Twitter, and even Bing-the-Merciless. Ultimately we gather and peruse for a while, use a little and shelve and store archives worth of useless and inane material, made so through disuse. We also do it with paper. Ream-upon-ream of paper is stored in the name of document retrieval and archiving. Ultimately, the weight of these activities causes the house to ultimately collapse.  I am guilty of these crimes against myself, and they have caused enough disorganization and confusion. Now, I am at war with such waste, and find how overwhelmed by stuff I am. It’s like liking in Madame Blueberry’s domain in the Veggie Tales™ about Stuff-Mart. I have collected so much software, peripherals for computes, computers, monitors, manuals, books, tapes (yes cassette tapes), CDs, DVDs, and pamphlets which I have summarily piled stacked, stored sifted, stuffed and filed that in a recent donation to a charity, I filled a pickup and still had room to go, even after giving away a pickup load to Freecycle™. So, out come the work gloves and the bucket, mop, and broom. I got a scanner for the

Joe Nacchio's old Mop Bucket

big documents, and am digitizing all of my files, capturing them to a hard drive, and then, will make one backup of the data for my real estate and taxes offsite (stored on the cloud) and another backup on DVD of the records destined for destruction on a ten year cycle. I am committed to spending a few hours a week on this until the mountain has been reduced, and all of the piles are gone. After that, all I will have are my daily updated backups, and a weekly capture of the information to a DVD near me for long term archival. If it isn’t used for six months, whatever it is goes away. That will reduce my storage needs to 1/10 or less the volume it presently consumes.

I may post progress on this, later. For now, I have to roll up my sleeves and get more done.

It also helps to know the neighborhoods, or subdivisions. Subdivisions are little islands. Navigating them is one way to chart a course to happiness in your new home. If you are selling, knowing the subdivisions around your can help you make the most of the sale of your home. With constant changes in market conditions, and the economy, having a Realtor® who understands how your neighborhood  fits in the larger areas around it and how to plan for the right buyer to look for.

This sounds like the musings of an engineer. Let me assure you that I am not. As a former gifted educator, I did work with students to solve problems in math in which an engineering conundrum was the focus. Such things as bridge building projects, using toothpicks and Elmers™ glue show students that the math involved in the design of the project must also provide a correct calculation that will provide support for the greatest possible weight the structure will hold. Some of these have held more than 200 pounds, and the number of toothpicks is fixed for these events.

That is how the debt ceiling should be managed. As long as we keep raising it, the spenders in the Senate will keep on sponging like a shopaholic maxing out a credit card.

Geitner calls for raising the debt ceiling, and this is to be expected from a man who doesn’t file or pay taxes, and gets a walk for it. Ben Benanke has shown how incompetent he is at managing the money supply via the Fed (a private corporation given too much power).

The American people have been duped, and they just seem to refuse to admit it, instead of demanding that the government stop the insanity.  Our personal budgets can no more stand this kind of mismanagement than the national budget can. it has to stop.

How? Write your representatives and demand that they listen to you. Demand a balanced budget and an end to runaway spending. Do it for the strength of the nation, before the government bankrupts you.

Once the revelry is completed, the process of beginning in earnest of a new year will actually commence. I have to sounder what people will be thinking, this time around.

2010 culminated in a contentions election, which I must admit I was deeply engrossed in, and grossed out by. Changes in the political strata of the nation occurred, and some things pleased and others disgusted me. Needless to say, this is most likely something that occurred for anyone who voted.

We will have births and deaths, as happens each day. I just learned of the loss of a maternal relative who served as a Navy pilot during WWII, who saved lives by shooting a suicide bomber out of the sky. He also has an injury which would cause permanent damage to a leg. Another member of that family built and operated a hospital, which is now a nursing home, in Jacksonville, TX.

So, it is also a period for reflection and memories. It is a time to look back at the mistakes that were made, and resolve to learn from and not repeat them. It will be a time to hold our representatives in government accountable for obeying the Constitution.

It will also be a time to correct foolish things that have been done in the past. It will be a time to restore patriotism, and to remove government action and intervention in private business. It is time to realize that the government does not have the right to enter private enterprise.

It is a time for personal responsibility and accountability to be the rule and not the exception. We must use common sense in our behaviors, whether those behaviors are a part of business, or personal life. We cannot allow ourselves to become lazy and ask the government to think for us. It is already proven that the government will not act in our best interests.

And, there are the usual other things: lose weight, get in shape, do a better job of maintaining a budget, cleaning the basement, etc. Just remember that New Year’s resolutions are like golf swings… useless unless you keep your eye on the ball and follow through.

Real estate is a passion for me. I have often said that I cannot
transfuse, because of the loam in my veins, or, to steal a line from JK Rowling, I am a true mudblood.

I have a great team that you will get to know, and we and our
office pitch in to make sure our clients get the best efforts we can give. We want to make sure you get the best value no matter what the transaction is.

More will be added here, and there will be pages of tips,
resources, and information that will help you understand the most current trends and information, service providers, and contractors, and just great general tips to help make things go smooth and easy.

Please stop by, drop a line or contribute information as you feel
led.

Thanks for stopping by often, as new treats have a way of ending up here.

All the best, in every way, every day,

Lou Farris, MBA, Realtor®
“That Realtor Guy In Shorts!”€     

That Realtor® Guy in Shorts!

3900 E Mexico Ave #1350
Denver CO 80210

720.255.7148 phone
866.306.4410 fax

thatrealtorguyinshorts@live.com