if debt talks fail and US economy goes down the drain, how will that affect my miles?
Jul 24, 2011, 1:01 pm
#16
Join Date: Dec 2010
Location: Indianapolis
Programs: Hilton-Diamond Lifetime Platinum AA UA, WN-CP, SPG Gold.
Posts: 7,377
Just like the NFL when it is thime to play the game it will go on...
This is just a dog and pony show to get the ticket prices higer...
Heads or tails your taxes will go up and the Government will get more...
Showtime...people..
This is just a dog and pony show to get the ticket prices higer...
Heads or tails your taxes will go up and the Government will get more...
Showtime...people..
Jul 24, 2011, 1:12 pm
#18
FlyerTalk Evangelist
Join Date: Jul 1999
Location: ORD/MDW
Programs: BA/AA/AS/B6/WN/ UA/HH/MR and more like 'em but most felicitously & importantly MUCCI
Posts: 19,725
To my friends on the left who think the Democrats are for the "middle class", you are delusional... To my friends on the right who think Republicans are for smaller government, you too have been drinking the grape Kool-Aide too long.
Jul 24, 2011, 1:17 pm
#19
Join Date: Feb 2010
Location: Disney World
Programs: Fairmont Lifetime Platinum, Hyatt Globalist, AA Lifetime Gold
Posts: 321
Jul 24, 2011, 1:37 pm
#21
Join Date: Jan 2008
Posts: 470
Could someone please show Alex and Bear where OMNI is located?
BTW, is the OP even on the up-and-up? If the economy "goes down the drain", his concern is what happens to his miles? Plus, he's already edited the text of his post to change it's meaning entirely and make it completely NOT about miles. If he wants to know what happens to his *money* in the event of default, he's on the wrong site.
BTW, is the OP even on the up-and-up? If the economy "goes down the drain", his concern is what happens to his miles? Plus, he's already edited the text of his post to change it's meaning entirely and make it completely NOT about miles. If he wants to know what happens to his *money* in the event of default, he's on the wrong site.
Jul 24, 2011, 1:51 pm
#22
Join Date: Apr 2004
Location: Bay Area
Posts: 528
A much more empirical answer: If past performance is any indication of future results, your miles will be devalued, because they always do. I never heard of a situation when a program revalued miles (reduced all award levels, removed all restrictions....)
A simple logic: the economy goes well, miles get devalued because airlines don't need to attract non-paying customers. If the economy goes poorly, airlines will cut flights and there will be fewer available seats. Let's hope not.
OTOH, if I remember the 'glory' days of previous economic hard times, one can imagine there could be promos and promos and more promos...to get people to travel.
A simple logic: the economy goes well, miles get devalued because airlines don't need to attract non-paying customers. If the economy goes poorly, airlines will cut flights and there will be fewer available seats. Let's hope not.
OTOH, if I remember the 'glory' days of previous economic hard times, one can imagine there could be promos and promos and more promos...to get people to travel.
Jul 24, 2011, 1:53 pm
#23
Join Date: Oct 2010
Location: GGG, DFW, IAH
Posts: 284
BUT, before oil went above $50 in around 2005 and stayed there since then, $ prices of these tickets were much lower either. And if my memory doesn't fail me, they were more than 20% cheaper. So in terms of how much using each mile saved you in $, nowdays miles are more valuable.
Jul 24, 2011, 3:07 pm
#24
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,820
Jul 24, 2011, 3:14 pm
#25
FlyerTalk Evangelist
Join Date: Apr 2009
Location: where lions are led by donkeys...
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Posts: 20,418
For some reason it reminded me of this:
From the revue that really launched the 'satire' boom, the 1961 Beyond The Fringe. The cast: Peter Cook, Jonathan Miller, Dudley Moore and Alan Bennett. They are seated, huddled, on the top of a mountain...
Jon :
How will it be, this end of which you have spoken, Brother Enim?
Omnes:
Yes, how will it be?
Peter :
Well, it will be, as 'twere a mighty rending in the sky, you see, and the mountains shall sink, you see, and the valleys shall rise, you see, and great shall be the tumult thereof.
Jon :
Will the veil of the temple be rent in twain?
Peter :
The veil of the temple will be rent in twain about two minutes before we see the sign of the manifest flying beast-head in the sky.
Alan :
And will there be a mighty wind, Brother Enim?
Peter :
Certainly there will be a mighty wind, if the word of God is anything to go by...
Dudley :
And will this wind be so mighty as to lay low the mountains of the earth?
Peter :
No - it will not be quite as mighty as that - that is why we have come up on the mountain, you stupid nit - to be safe from it. Up here on the mountain we shall be safe - safe as houses.
Alan :
And what will happen to the houses?
Peter :
Well, naturally, the houses will be swept away and the tents of the ungodly with them, and they will all be consumd by the power of the heavens and on earth - and serve them right!
Alan :
And shall we be consumed?
Peter :
Con..sum..d? No, we shall not be consumd - we shall be up on the mountain here, you see, while millions burn, having a bit of a giggle.
Jon :
When will it be, this end of which you have spoken?
Omnes :
Aye, when will it be - when will it be?
Peter :
In about thirty seconds time, according to the ancient pyramidic scrolls... and my Ingersoll watch.
Jon :
Shall we compose ourselves, then?
Peter :
Good plan, Brother Pithy. Prepare for the End of the World! Fifteen seconds...
Alan :
Have we got the tinned food?
Dudley :
Yes.
Peter :
Ten seconds...
Jon :
And the tin-opener?
Dudley :
Yes.
Peter :
Five - four - three - two - one - Zero!
Omnes :
(Chanting) Now is the end - Perish The World!
A pause
Peter :
It was GMT, wasn't it?
Jon :
Yes.
Peter :
Well, it's not quite the conflagration I'd been banking on. Never mind, lads, same time tomorrow... we must get a winner one day.
From the revue that really launched the 'satire' boom, the 1961 Beyond The Fringe. The cast: Peter Cook, Jonathan Miller, Dudley Moore and Alan Bennett. They are seated, huddled, on the top of a mountain...
Jon :
How will it be, this end of which you have spoken, Brother Enim?
Omnes:
Yes, how will it be?
Peter :
Well, it will be, as 'twere a mighty rending in the sky, you see, and the mountains shall sink, you see, and the valleys shall rise, you see, and great shall be the tumult thereof.
Jon :
Will the veil of the temple be rent in twain?
Peter :
The veil of the temple will be rent in twain about two minutes before we see the sign of the manifest flying beast-head in the sky.
Alan :
And will there be a mighty wind, Brother Enim?
Peter :
Certainly there will be a mighty wind, if the word of God is anything to go by...
Dudley :
And will this wind be so mighty as to lay low the mountains of the earth?
Peter :
No - it will not be quite as mighty as that - that is why we have come up on the mountain, you stupid nit - to be safe from it. Up here on the mountain we shall be safe - safe as houses.
Alan :
And what will happen to the houses?
Peter :
Well, naturally, the houses will be swept away and the tents of the ungodly with them, and they will all be consumd by the power of the heavens and on earth - and serve them right!
Alan :
And shall we be consumed?
Peter :
Con..sum..d? No, we shall not be consumd - we shall be up on the mountain here, you see, while millions burn, having a bit of a giggle.
Jon :
When will it be, this end of which you have spoken?
Omnes :
Aye, when will it be - when will it be?
Peter :
In about thirty seconds time, according to the ancient pyramidic scrolls... and my Ingersoll watch.
Jon :
Shall we compose ourselves, then?
Peter :
Good plan, Brother Pithy. Prepare for the End of the World! Fifteen seconds...
Alan :
Have we got the tinned food?
Dudley :
Yes.
Peter :
Ten seconds...
Jon :
And the tin-opener?
Dudley :
Yes.
Peter :
Five - four - three - two - one - Zero!
Omnes :
(Chanting) Now is the end - Perish The World!
A pause
Peter :
It was GMT, wasn't it?
Jon :
Yes.
Peter :
Well, it's not quite the conflagration I'd been banking on. Never mind, lads, same time tomorrow... we must get a winner one day.
Jul 24, 2011, 3:22 pm
#26
Join Date: Aug 2010
Location: ATL
Programs: Delta-PM, Marriott-Plat, PC-Gold
Posts: 226
Jul 24, 2011, 3:43 pm
#27
Join Date: Jan 2006
Location: ELP
Programs: AA EXP/LT PLAT, Marriott Titanium/LT PLAT
Posts: 4,123
Well said!
Hi All,
As to the original posters question, your value of your miles will depend on the ability of management to navigate through a prolonged economic downturn. Many businesses made a lot of money during recessions and our great depression. It will be up to AA management to make sure that your miles (a form of bater currency) will retain any value or not.
In the body of your message, you asked about your money. Research the horrific inflation that occurred in the 70's and what that did to savers. High inflation will be a consequence of the Federal Reserve printing too much money and debasing (destroying) the dollars purchasing power.
To my friends on the left who think the Democrats are for the "middle class", you are delusional. Inflation will hit the middle class the hardest, destroying the purchasing power of their savings. If you think Democrats want to help the poor, please explain how many times throwing money at a problem has been successful without calculating a return on investment? The poverty rate hasn't changed significantly in the last 40 years, despite trillions of dollars being spent.
To my friends on the right who think Republicans are for smaller government, you too have been drinking the grape Kool-Aide too long. Spending under GW Bush and the Republican congress soared!
To those that want to be intellectually honest, we must address the simple fact that the US will only default (causing markets to tank) if it chooses to. Every citizen should go to usdebtclock (dot) org and see where we stand economically. The US can pay the interest on the debt and refinance some of its maturing securities with the income it has coming in. This can and should be the highest priority. A pecking order should be made of the most critical functions of the government, and that is where the remaining funds should be spent. Everything else is not important. The issue is not the debt ceiling, but politicians on both sides spending money we can't afford to their respective prostitute voter base. Artificially low interest rates and government spending are the real problem, the debt ceiling is just a symptom
To prove that it is not just one party or the other, look to the "solution" for the Minnesota fiscal crisis. They used tricks and gimmicks to delay the day of reckoning for a while. They did nothing to solve the problem, just push it out into the future. This is the main problem with the country. We have solutions for social security and other issues, but it is not in the interest of the ruling class politicians to solve them, because they know they can pull your strings at election time and make you all jump.
The sooner you realize that no one cares more about your future than you do, and you need to start planning accordingly, the better for you and your family. If you trust government to solve your problems, you will get what you deserve. Think of those images of the LA Superdome after Katrina hit. Will that be you if the economy breaks down due to the politicians playing the same old games with us "peasants?"
I have been studying these economic issues for about 4 hours a day for the last 12- 18 months. I have a background in finance and economics. I offer this as a way to help you with no agenda.
Plan now and prepare. Simple as that.
Best Wishes,
Alex
As to the original posters question, your value of your miles will depend on the ability of management to navigate through a prolonged economic downturn. Many businesses made a lot of money during recessions and our great depression. It will be up to AA management to make sure that your miles (a form of bater currency) will retain any value or not.
In the body of your message, you asked about your money. Research the horrific inflation that occurred in the 70's and what that did to savers. High inflation will be a consequence of the Federal Reserve printing too much money and debasing (destroying) the dollars purchasing power.
To my friends on the left who think the Democrats are for the "middle class", you are delusional. Inflation will hit the middle class the hardest, destroying the purchasing power of their savings. If you think Democrats want to help the poor, please explain how many times throwing money at a problem has been successful without calculating a return on investment? The poverty rate hasn't changed significantly in the last 40 years, despite trillions of dollars being spent.
To my friends on the right who think Republicans are for smaller government, you too have been drinking the grape Kool-Aide too long. Spending under GW Bush and the Republican congress soared!
To those that want to be intellectually honest, we must address the simple fact that the US will only default (causing markets to tank) if it chooses to. Every citizen should go to usdebtclock (dot) org and see where we stand economically. The US can pay the interest on the debt and refinance some of its maturing securities with the income it has coming in. This can and should be the highest priority. A pecking order should be made of the most critical functions of the government, and that is where the remaining funds should be spent. Everything else is not important. The issue is not the debt ceiling, but politicians on both sides spending money we can't afford to their respective prostitute voter base. Artificially low interest rates and government spending are the real problem, the debt ceiling is just a symptom
To prove that it is not just one party or the other, look to the "solution" for the Minnesota fiscal crisis. They used tricks and gimmicks to delay the day of reckoning for a while. They did nothing to solve the problem, just push it out into the future. This is the main problem with the country. We have solutions for social security and other issues, but it is not in the interest of the ruling class politicians to solve them, because they know they can pull your strings at election time and make you all jump.
The sooner you realize that no one cares more about your future than you do, and you need to start planning accordingly, the better for you and your family. If you trust government to solve your problems, you will get what you deserve. Think of those images of the LA Superdome after Katrina hit. Will that be you if the economy breaks down due to the politicians playing the same old games with us "peasants?"
I have been studying these economic issues for about 4 hours a day for the last 12- 18 months. I have a background in finance and economics. I offer this as a way to help you with no agenda.
Plan now and prepare. Simple as that.
Best Wishes,
Alex
Jul 24, 2011, 5:16 pm
#28
Join Date: Jul 2010
Posts: 143
There are so many things that concern me that I have decided to adopt an ostrich-like posture!
While I thought the idiots in Washington would resolve this prior to Aug. 2, I now think they won't. Now think it's going to be like the financial bailout, which failed in its first go-round, causing the Dow to drop 700+ points, but then was passed (after costing people millions in stock losses).
U.S. politics have become a distasteful breeding ground fro extremists -- if you're not ultra-conservative or ultra-liberal, you don't make it out of your primary any more. When these yahoos refuse to compromise once they hit Washington, you paralyze the country....as they are doing!
My income has dropped pretty dramatically over the past 10 years. To make up for it, I have cut my spending/expenses, looked for creative ways to increase my income and told people who asked to borrow money that I just wasn't in a position to help them. Seems like common sense to me, but it appears lost on Congress.
And to clarify, I blame them all -- Democrats need to back off their refusal to make large spending cuts and Republican have to back off their "no tax increase" stance (ESPECIALLY when taxes being discussed are on very rich and corporate America!). Palin's "Joe 6 pack" couldn't give a rat's @ss if Exxon or Bill Gates has to pay more in taxes next year!
BUT enough of my "I'm a moderate, middle income person who NOBODY cares about or represents!" - back to the OP, I think this COULD have wider reach than just airlines that go out of business. I don't see how airlines would avoid dropping big mile bonus offers and increasing the miles required for free tickets.
In the words of Dennis Miller, of course, that's just my opinion....who wants pie?!?
While I thought the idiots in Washington would resolve this prior to Aug. 2, I now think they won't. Now think it's going to be like the financial bailout, which failed in its first go-round, causing the Dow to drop 700+ points, but then was passed (after costing people millions in stock losses).
U.S. politics have become a distasteful breeding ground fro extremists -- if you're not ultra-conservative or ultra-liberal, you don't make it out of your primary any more. When these yahoos refuse to compromise once they hit Washington, you paralyze the country....as they are doing!
My income has dropped pretty dramatically over the past 10 years. To make up for it, I have cut my spending/expenses, looked for creative ways to increase my income and told people who asked to borrow money that I just wasn't in a position to help them. Seems like common sense to me, but it appears lost on Congress.
And to clarify, I blame them all -- Democrats need to back off their refusal to make large spending cuts and Republican have to back off their "no tax increase" stance (ESPECIALLY when taxes being discussed are on very rich and corporate America!). Palin's "Joe 6 pack" couldn't give a rat's @ss if Exxon or Bill Gates has to pay more in taxes next year!
BUT enough of my "I'm a moderate, middle income person who NOBODY cares about or represents!" - back to the OP, I think this COULD have wider reach than just airlines that go out of business. I don't see how airlines would avoid dropping big mile bonus offers and increasing the miles required for free tickets.
In the words of Dennis Miller, of course, that's just my opinion....who wants pie?!?
Jul 24, 2011, 5:24 pm
#29
FlyerTalk Evangelist
Join Date: Jul 1999
Location: ORD/MDW
Programs: BA/AA/AS/B6/WN/ UA/HH/MR and more like 'em but most felicitously & importantly MUCCI
Posts: 19,725
There wasn't in the last one. I did a couple of long overseas award trips in '09 and remember being impressed by how empty the J and F cabins and lounges were throughout Asia and Australia, even as redemption remained difficult or impossible.
When these programs launched in the '80s a domestic ticket was 20k. Now a "saver" ticket is 25k and the airlines have repositioned the norm as 50k. In the '90s I was able to do off-peak business class TATLs on NW for 55k; now it's 100k or 120k if you're lucky -- more if you're not. And you know the story about across-the-board value weakening at DL / SkyPesos... so bad that many customers, including me, have dumped the program.
Miles, hotel points, etc. are subject to inflationary pressure like any other currency. And for the same reasons: overprinting by the Treasury. 100k credit card bonuses, DEQM promos, 10k miles for a blown reading light or a rude FA, etc. mean everyone holds too many miles while chasing fewer award seats. Mergers and capacity drawdowns only make things worse.
The main difference between miles or points and real money is there's no way for you to bank or invest miles / points to increase your balance and strategize against inflation. Their devaluation is inevitable.
(Also like real money, the only thing that props up the value of miles is belief. If enough people no longer believe they're worth owning, they're not, and the currency crashes. Who cares about SkyMiles when they want 300k or whatever to take you to SYD while the same award is 100k in other currencies? Numbers not precise, but you get the idea.)
So I would disagree with your analysis that miles get more valuable over time. The stash you hold today, unincreased, will not "buy" more travel in 2021. They'll buy much less. Earn and burn.
...just years ago it was almost universally across the board that it took 50,000 miles to fly between North America and Europe - now it most universally takes 60,000 miles. So in terms of how much travel this one mile can buy you, yes, these miles have devalued 20% since maybe 5-7 years ago... in terms of how much using each mile saved you in $, nowdays miles are more valuable.
Miles, hotel points, etc. are subject to inflationary pressure like any other currency. And for the same reasons: overprinting by the Treasury. 100k credit card bonuses, DEQM promos, 10k miles for a blown reading light or a rude FA, etc. mean everyone holds too many miles while chasing fewer award seats. Mergers and capacity drawdowns only make things worse.
The main difference between miles or points and real money is there's no way for you to bank or invest miles / points to increase your balance and strategize against inflation. Their devaluation is inevitable.
(Also like real money, the only thing that props up the value of miles is belief. If enough people no longer believe they're worth owning, they're not, and the currency crashes. Who cares about SkyMiles when they want 300k or whatever to take you to SYD while the same award is 100k in other currencies? Numbers not precise, but you get the idea.)
So I would disagree with your analysis that miles get more valuable over time. The stash you hold today, unincreased, will not "buy" more travel in 2021. They'll buy much less. Earn and burn.