Festool Price Increase???

[Glen Gunderson]

"the stock market indexes did not grow one bit from 1952 - 1972, 20 years of stagnant market."

What index are you talking about? The dow had huge gains in that time frame.

You're correct. However, his same point could be made between 1964-1984. The Dow Jones hovered around 1000 for 20 years. $1000 ($3350 in 1984 currency) invested in 1964 was only about $1250 in 1984, so that would be a net loss of over $2000 after inflation.

In fact, after inflation, the Dow Jones only recovered to it's 1929 levels in the early 1990s. Heck, it took until the 1980s a get back to the pre-WWII levels of the Dow Jones. So that was almost 50 years with almost no growth in the index when compared to inflation.

[Will Blick]

Dan, it's possible I got the years wrong, but it was stagnant for a big chunk of time around there... IIRC it was the Dow.... 1962 - 80?

http://tinyurl.com/3e2cd3

[Dewey Torres]

Pat... You are quite the economist. Who would have known Now what are you building next? (Plantation shutters, another cutting board, something requiring a band saw perhaps?)... awe just kidding See you at work!
By the way.. did you notice which branch is gaining the criticism's for overseas $$$. "Chair Force".
Dewey

Much of military manufacturing is still in the US; Navy ships, tanks, helicopters, trucks, jeeps and artillery pieces for example. Many small arms, both civilian and military, are also cranked out from US factories.

Although, even those areas are going more global. Much is being made of the Air Force's decision to go with an EADS (Airbus) platform for a new airborne tanker. In truth, had Boeing won that contract, much of their manufacturing would also had been overseas.

I still say there's way too much doom and gloom here. And yes, there are many people who benefit from preaching such negativity. Politicians, primarily.

[Eric Haycraft]

Eric, do you think its possible the USA may one day join the Euro currency, as well as the Brits? (I never hear talk of the USA joining the party) As painful as this may be during the transition, don't you think this might become a necessary evil, to accommodate the new world economy and level the currency fluctuations? The Euro user-base already outnumbers the US dollar user-base by almost 4:1. As the Euro grows in popularity, the dollar will continue to loose its clout over time as the Euro will be the most stable currency in the world.... even though in its infancy, many probably think it already is....

I have been trying to read up on everything fed and currency related that I can find lately and I firmly believe that world currency is a goal of many of the powers that be, but it isn't something that I can prove. The euro was a big move in that direction. Unfortunately, a world currency would likely end up doing more harm than good to the little people like us. I don't really want to get into why this would be bad but in general the people that control the money control the world..would those people be in it for the good of the masses or a few? With few exceptions in history, the few are the ones that benefit when currency is centralized.

Remember that the great depression wasn't really caused by the over exuberance in the stock market...that would have only caused a recession. The depth and length of the depression was caused by the Federal Reserve's tightening of the money supply while the markets were falling. Back then, the Fed had great control over the economy, that has greatly changed over the past few years. While we are in a very similar market position to 1929 (lots of 'froth' in the stock market), the outcome can't really be predicted because the intricacies of our markets today are very different then the 20s. The Fed also seems much less evil these days. Back then, the amount of money in the system was easily controlled by 1 body, with securitization in the markets today and derivatives, central control is gone and the Fed can only nudge in one direction or another. The question of are we in for a recession or something that makes the depression look like a cake walk is unfortunately unanswerable because the issue is so complex. The markets will certainly crash, that's a given, but what that means for the masses is unknowable. We have a liquidity log jam going on right now and the Fed seems to be powerless to break it free which is a big concern to people like me watching from the sidelines.

A week or so ago, the US dropped to #2 in terms of our economy's size due to the falling dollar. Part of what was keeping the dollar artificially high (which helped us by giving us easy credit to cheaply buy all of the things that we have enjoyed these past 30 plus years) was that the USD was the reserve currency of many countries and the base currency that many commodities were trading in. This has been changing as the euro rose up. (It is interesting to google about which countries threatened to drop the dollar and what ended up happening to them).

[Will Blick]

> the USD was the reserve currency of many countries and the base currency that many commodities were trading in. This has been changing as the euro rose up.

This is really interesting Eric..... I never knew this... sheeesh, more potential decline for the dollar.

I agree with your assessment of uncertainty... as a lot of the outcome of the current crisis hinges on investors mindsets....just the simple act of investors pulling out of the markets to sit on the sidelines can start a catastrophic fall in the markets.... it's the snowball rolling down the hill concept. There is no formulas that dictate human behaviors....specially as there is other outside influences such as wars, terrorist acts, scarcity of supply of resources such as oil..... all this can greatly influence investor thinking. Again, it really is a deck of cards.

I am no economist, but I can't see how a single currency would hurt the world economy over the long haul. It seems one currency would provide the sledge hammer required to create the true definition of "value".

[Mike Monroe]

Price increase? What price increase... no impact here as I don't plan on buying any Festool tools; now or in the future. As much time as I don't spend in the shop, top of the line tools are jut not economically feasible for me.

-Mike

[Eric Haycraft]

I agree with your assessment of uncertainty... as a lot of the outcome of the current crisis hinges on investors mindsets....just the simple act of investors pulling out of the markets to sit on the sidelines can start a catastrophic fall in the markets.... it's the snowball rolling down the hill concept.

The scary part is that many investments these days are highly leveraged. For example, hedge funds may raise 1 million from investors and turn around and take out loans for 10 or 20 million to buy up other securities. This works ok until the investors want their 1 million back. If the securities that they purchased on loan haven't made any money, they have to dump everything that was purchased with loans to pay back the original investors. Other situations arise when the bonds that they purchased have their ratings lowered...when that happens, the banks that loaned the 10 or 20 million turn around and say that the hedge fund needs to have more than 1 million on hand due to the increased risk or that they need to sell those bonds. If the bonds are that bad, no one wants to buy them and they are caught in a catch 22. This is a simplified version of what happened to Bear Stearns.

I am no economist, but I can't see how a single currency would hurt the world economy over the long haul. It seems one currency would provide the sledge hammer required to create the true definition of "value".

It *could* work. For it to work, two things would need to happen and both are quite unlikely. First, fractional reserve banking would need to be abolished. Second, the currency in circulation would need to be directly tied to population. Those two elements together would eliminate inflation.

Fractional reserve banking is another topic altogether and it gives me the willies every time that I think about it. It is the basis for our banking system. Basically it states that a bank can lend out multiple times the amount of money that it has deposited. So, if I deposit 10,000 in a bank, they can make someone else a loan for 100,000 based solely upon my deposit. Now, let's say that the person that took out that loan deposits 10,000 in that same bank, the bank can again loan out another 100,000 to another person. In this simple example, the bank created 200,000 dollars from 1 10,000 deposit. (It is a much more complicated than my overly simplified calc because it doesn't allow unlimited exponential creation of money, but it does create many times the amount of money deposited) Google 'fractional reserve banking'.. it is an eye opener. In effect this style of banking causes inflation (usually only a few percent) which is an invisible tax on everyone that uses the currency. It also requires an increasing level of debt or the currency will collapse. As a result, a world currency using fractional reserve banking would result in a worldwide tax through inflation and increasing worldwide debt. I personally would prefer not to go down that path.

[Peter Quadarella]

Darnit, you made me buy the Domino!

My 2 cents re: the economic debate = The sky is not falling.

Also, we're not going to a single currency for the simple reason that the voters wouldn't like it (for patriotic reasons) and therefore politicians that suggest it will lose their footing. I believe this is the underlying reason the GBP still exists.

Our country still has an amazing amount of buying power, and more natural resources and in house manufacturing than most 1st world countries. If you haven't forgotten WW2, you will also note than in time of crises we can mobilize our workforce like nobody's business. So don't worry so much; enjoy your woodworking.

[Will Blick]

Peter, not worrying, just fascinating chatter while not in the shop.....

yeah, you did the best thing, buy your domino now, before $1500 price tag! :-)

Eric, great point about bank leverage loaning....this truly does create artificial economic growth....same true with leveraged funds (which I learned about the hard way).... the more an investment is extended beyond pure cash, the shakier the house of cards becomes.... lighter winds can blow it down...

IMO, this is the first time in our economy which we have experienced such over extension on everything.... right from the top, Bear Stearns, down to the individual house flippers trying to turn a profit on a home with no money down.... it seems we start reaching the end of growth in many sectors, and this extended form of credit was the only way to push markets further....which worked great, till the market finally turns and the notes are due. Many current R.E. flippers can relate to this pain today....

[Dan Lautner]

"A week or so ago, the US dropped to #2 in terms of our economy's size due to the falling dollar"


Our economy is four times the size of any other country. What are you referring to?

Dan

[Steven Hardy]

Myself ,realising that it is a global economy,prefer to buy ONLY from countries that have a healthy trade with us. There are a number of countries that DO buy our products (thank you Canada!) I prefer to avoid
Japan and China products. Its the same story year after year....
http://www.census.gov/foreign-trade/...p/top0711.html

[Bill Lantry]

Gentlemen,

All this speculation is nice, but not relevant to what's really going on. This is all about fiscal policy. If you're really interested, try this:

http://www.nytimes.com/2008/03/23/bu...f62&ei=5087%0A

Thanks,

Bill

[Randy Denby]

Bill, I read that article. Thanks!

Also read one of the articles linked at the side of the page
http://www.nytimes.com/2008/03/22/bu...4b1&ei=5087%0A

This was a good read and was something I needed. Been real insecure lately, but this re-enforced what my grandfather always told me.Buy when people are selling and sell when they're buying...and live within your means. Thanks again!
Randy