7%. Oy.


NeuroTypical
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The new inflation numbers are out, we’re now running a little more than 7%.  Is anyone besides me feeling it?

In related news, there’s a family of traveling minstrels that show up at the grocery store parking lot with their cardboard sign and a violin and a speaker.  They are quite talented, and I enjoy their performance, so I don’t mind giving them a buck.

Today, however, the guy argued with me. He said “A dollar? This is for food! For rent!”  I told him it’s what I had, he just looked at me with scorn and refused to take it.

I guess I can see his point. Fast food joints around here pay 15 bucks an hour, the minimum wage keeps going up, rents keep increasing. Inflation stinks. A dollar is the new small pittance of coins to a street beggar.  Suddenly, raking in about 200 bucks in a couple hours just doesn’t go as far as it used to.

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16 minutes ago, NeuroTypical said:

The new inflation numbers are out, we’re now running a little more than 7%.  Is anyone besides me feeling it?

In related news, there’s a family of traveling minstrels that show up at the grocery store parking lot with their cardboard sign and a violin and a speaker.  They are quite talented, and I enjoy their performance, so I don’t mind giving them a buck.

Today, however, the guy argued with me. He said “A dollar? This is for food! For rent!”  I told him it’s what I had, he just looked at me with scorn and refused to take it.

I guess I can see his point. Fast food joints around here pay 15 bucks an hour, the minimum wage keeps going up, rents keep increasing. Inflation stinks. A dollar is the new small pittance of coins to a street beggar.  Suddenly, raking in about 200 bucks in a couple hours just doesn’t go as far as it used to.

My wife pointed out that she doesn’t remember our grocery bill ever being as high as it is.

Its going to be VERY interesting to see what the next few years bring. Another crash followed by a return to normal? Or are the conspiracies true (and the last few years have quite the track record of conspiracies) and this is the new normal?

Edited by Fether
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17 minutes ago, NeuroTypical said:

The new inflation numbers are out, we’re now running a little more than 7%.

I also remember reading somewhere that last year, or some year before that, the federal reserve stopped trying to keep annual inflation around 2-3% and are not trying to keep the decade long average to 2-3%.

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I just got back from the grocery store and it was pretty insane. 

I took a fairly significant paycut for my current job. It worked out because it actually saved us money once childcare and commute-related stuff was removed from the budget. But dang, the wages down at the fast food places are quickly approaching my income. 

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I have been blessed (Thus far) to not feel the effects of it as much.  Things are a little more expensive, but we have adequate for our needs right now.

What I am watching carefully are the rising property valued.  The Greed in this nation knows no bounds and making property an investment rather than a place to live is not a good thing.  I feel before long it could hurt many people that are not rich.

We own our home, but rising property values cause rising property taxes.  If it gets too high, I won't be able to afford our taxes anymore, which by default means that we would have to lose the house.  It's not to that point, but it is a matter of concern when I see how much property values have jumped over the past year.  Another decade of similar price rises (if I live that long, which i Hope to) and I could very well find myself in that situation.  If it continues rising at this rate just a few more years I can't see myself ever stopping work (I didn't intend to, but at least it has been an option to this point).

I'm not sure how my grandkids are going to afford houses and such in the future.  I have a grand-daughter who is a full-time RN and she lives at home due to house prices.  I just see unadulterated greed where property and housing are concerned and no consideration for the next generation.  I recently sold a property of mine for what most would consider a steal.  I sold 2 acres and a 2500 sq ft house for 150K.  In a setting where smaller houses are going for 500K people think what I did was scandalous.  I wasn't out to make a profit (and I STILL made one from the price I bought it for many years ago), I was about trying to make sure it was a just deal for those who needed a home. 

I feel as if pride and greed have gone amok.

I can understand WHY the United States government WANTS to have inflation (despite what some may say).  Trump did some terrible things.  One of those was to back track on a conservative value that had been pushed by the Right for years.  The value he abandoned was to control the budget.  The Republican values USED to be to rein in spending and to stop such large deficits.  This was abandoned.  Trump made a Tax plan that largely benefited him and others and also cut back on the income the government could take (he made some minor tax changes that benefitted some americans temporarily until those provisions run out in a few years...but the big cuts...the ones that hurt the government were for those who were rather wealthy) .  In his few years he caused a massive jump in the debt.

This is a problem which the Republicans caused, but did not want to deal with or face.  Unfortunately, it was ONLY the Republicans that had been for controlling the debt and reducing it in the past, the Democrats have always wanted to spend....spend...spend.  So now, we have this growing debt that no party wants to deal with...unless it is to make it worse. 

One thing we learn is that to deal with a national debt, inflation is good.  If you owe $1000 dollars, but you can make that $1000 worth $100, but retain the same power of purchase (so that while you had an income of $500 when you incurred the debt, but with the new inflation you now have an income of $5000 due to the worth of the dollar), you have made it MUCH easier to repay that debt.  What was once 2X what you brought in a year, is now 1/5 of what you bring in.  This can be GOOD for government debt...even if it is very BAD for your constituents. 

I fear, this is where we are at and how they are looking at balancing the debt now rather than more fiscal measures which the Republicans USED to push instead.

Edited by JohnsonJones
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4 hours ago, JohnsonJones said:

Trump did some terrible things.  One of those was to back track on a conservative value that had been pushed by the Right for years.  The value he abandoned was to control the budget.  The Republican values USED to be to rein in spending and to stop such large deficits.  This was abandoned.  Trump made a Tax plan that largely benefited him and others and also cut back on the income the government could take (he made some minor tax changes that benefitted some americans temporarily until those provisions run out in a few years...but the big cuts...the ones that hurt the government were for those who were rather wealthy) .  In his few years he caused a massive jump in the debt.

Yeah, well, sort of.  The last time I heard any sort of relevant, believable stuff about folks striving to reduce the deficit, was Bush I, the day before the two towers fell.  From then until today, deficit spending has basically been something that every party in power does, and the party out of power uses as a club against the party in power.

How did the US budget deficit perform based on the president? – Personal  Finance Club

 

That Clinton boom, for those who don't remember, was the "peace dividend" after the Soviet Union fell, in large part due to Reagan's policies. 

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11 hours ago, NeuroTypical said:

Yeah, well, sort of.  The last time I heard any sort of relevant, believable stuff about folks striving to reduce the deficit, was Bush I, the day before the two towers fell.  From then until today, deficit spending has basically been something that every party in power does, and the party out of power uses as a club against the party in power.

How did the US budget deficit perform based on the president? – Personal  Finance Club

 

That Clinton boom, for those who don't remember, was the "peace dividend" after the Soviet Union fell, in large part due to Reagan's policies. 

It's also worth noting that a lot of Obama's spending went towards cleaning up the mess left from the 2008 recession.

16 hours ago, JohnsonJones said:

What I am watching carefully are the rising property valued.  The Greed in this nation knows no bounds and making property an investment rather than a place to live is not a good thing.  I feel before long it could hurt many people that are not rich.

We own our home, but rising property values cause rising property taxes.  If it gets too high, I won't be able to afford our taxes anymore, which by default means that we would have to lose the house.  It's not to that point, but it is a matter of concern when I see how much property values have jumped over the past year.  Another decade of similar price rises (if I live that long, which i Hope to) and I could very well find myself in that situation.  If it continues rising at this rate just a few more years I can't see myself ever stopping work (I didn't intend to, but at least it has been an option to this point).

I'm not sure how my grandkids are going to afford houses and such in the future.  I have a grand-daughter who is a full-time RN and she lives at home due to house prices.  I just see unadulterated greed where property and housing are concerned and no consideration for the next generation.  I recently sold a property of mine for what most would consider a steal.  I sold 2 acres and a 2500 sq ft house for 150K.  In a setting where smaller houses are going for 500K people think what I did was scandalous.  I wasn't out to make a profit (and I STILL made one from the price I bought it for many years ago), I was about trying to make sure it was a just deal for those who needed a home. 

I feel as if pride and greed have gone amok.

Banks and PE firms have been investing in property at astronomical rates. This is creating a scarcity of homes for potential homeowners and sending prices through the roof (which means higher rent when those banks/PE firms rent out their properties).

https://fortune.com/2022/01/07/wall-street-kkr-blackstone-zillow-ibuying-house-flipping/

Berlin had a similar problem with their apartment market and their solution, decided by voters, was a mass government buyout of property from corporate landlords. I think that solution could be very viable for our real estate problem here in the US, though I can already hear the cries of "Socialism! Marxism!". 

16 hours ago, JohnsonJones said:

I can understand WHY the United States government WANTS to have inflation (despite what some may say).  Trump did some terrible things.  One of those was to back track on a conservative value that had been pushed by the Right for years.  The value he abandoned was to control the budget.  The Republican values USED to be to rein in spending and to stop such large deficits.  This was abandoned.  Trump made a Tax plan that largely benefited him and others and also cut back on the income the government could take (he made some minor tax changes that benefitted some americans temporarily until those provisions run out in a few years...but the big cuts...the ones that hurt the government were for those who were rather wealthy) .  In his few years he caused a massive jump in the debt.

This is a problem which the Republicans caused, but did not want to deal with or face.  Unfortunately, it was ONLY the Republicans that had been for controlling the debt and reducing it in the past, the Democrats have always wanted to spend....spend...spend.  So now, we have this growing debt that no party wants to deal with...unless it is to make it worse. 

Lately it seems like the Republican plan is to slash taxes while they're in power, then blame Dems for the resulting deficit and use it as an excuse to slash spending. Meanwhile, Dems try to pass spending plans to boost the economy, but can't get the votes to raise taxes to pay for it. Even when they focus their tax efforts on the ultra-rich, you have people like Manchin and Sinema saying "But wait, they're the only reason we have jobs!" As you said, pride and greed. 

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2 hours ago, Godless said:

As you said, pride and greed. 

True, but if you think democrats-yes, even very liberal ones, aren’t proud or greedy, that’s very naive. For lack of a better term, “original sin” isn’t political.
 

We laugh at the hypocrisy of conservative republicans who get in sex scandals. And we should. But the bitter pill is that your side bends over backwards to ignore the awkward truth that yes, Bernie Sanders owning three homes while lecturing me about “the poor” is also the same kind of hypocrisy. Ironically based in his pride. 

Only used the Bernie example because it’s the first one that comes to mind. 

Edited by LDSGator
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19 hours ago, JohnsonJones said:

I'm not sure how my grandkids are going to afford houses and such in the future.  I have a grand-daughter who is a full-time RN and she lives at home due to house prices.  I just see unadulterated greed where property and housing are concerned and no consideration for the next generation.  

I sometimes wonder about the cultural implications of this, if it continues too long. There's much good to be said about multigenerational homes when they're healthy, but I know people who aren't getting married and having kids simply because they can't afford to move out. My house isn't huge, we wouldn't be able to house adult kids and their families as it is due to literal lack of room.

Certainly we will see more multigenerational households, but what about when it becomes a situation of a lost generation?

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5 minutes ago, Backroads said:

I sometimes wonder about the cultural implications of this, if it continues too long. There's much good to be said about multigenerational homes when they're healthy, but I know people who aren't getting married and having kids simply because they can't afford to move out. My house isn't huge, we wouldn't be able to house adult kids and their families as it is due to literal lack of room.

Certainly we will see more multigenerational households, but what about when it becomes a situation of a lost generation?

In few months/years the housing bubble will pop again and you’ll be able to get a four bathroom/6 bedroom house for about three cheeseburgers and a Wal Mart gift card. So be patient my friend. 

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1 hour ago, LDSGator said:

In few months/years the housing bubble will pop again and you’ll be able to get a four bathroom/6 bedroom house for about three cheeseburgers and a Wal Mart gift card. So be patient my friend. 

I hear people say this, but I'm not seeing it happen anytime soon.  The banks seem to be more careful these days and thus the loans are on much steadier ground.   I have three grandkids that are married, none of them own a house at this point, and two of the couples are living at their parents in some capacity.  I have worries that this is the new economy with the younger generation unable to buy homes because others want more money than they can afford. 

I feel some of it is due to the West Coast.  The Chinese and others have been allowed to buy property in the US and with them using the Housing on the West Coast as investment properties, have shot up the price all over.  Rather than refuse to sell to them and keep property values cheaper in California, you had people sell their homes to them until prices reached over a Million (or two million in some places).  Now, you have those in California selling their homes and moving East to buy homes in places like Idaho, Utah, and Colorado (where many of my kids live and thus my grandkids).  They have no concerns about others and have jumped up the prices in other locations as well (from my perspective, I could also be wrong).

It probably wouldn't fix as much, but I'd say make laws that disallow individuals without US citizenship from owning property in the US or a similar law like that.  Other nations have instituted such.

Second, ensure that private housing (so, houses themselves) CANNOT be owned by a corporation or business for longer than a year.  If it is a foreign business or corporation, they cannot own apartments or any living facility, such things can ONLY be owned by US businesses that are a majority owned by US citizens.

I'm still not sure if that would cure the problem or not, I hear the effects would be minimal, but I feel something has to be done if we want to help the young generation of our grandkids be able to have a lifestyle that is anywhere similar to what we had when we were young adults.  We could afford houses when we were first out of college or working our more permanent career jobs.  Now, I have at least two of my three grandkids who have their husbands with what most would call decent jobs and still not being able to afford a home of their own.  I have other grandkids that also are on their own at this point and are also living at home due to the costs (I should add...most of them that I am talking about are currently in Utah and Idaho, not where I am actually living) in the housing market. 

Part of this is that I am concerned about my grandkids and their welfare.  I see that most of my generation is too busy trying to make housing an investment or so greedy they can't be bothered to try to figure out something to help our grandkids.  Hopefully the younger generation under mine (my kids generation) will do something.  I am concerned what will happen if prices continue to rise in such a manner for several years as that can make property taxes too expensive to pay (which nothing is being done to really curb those either), but a more immediate concern is where are all my grandkids going to live!

I don't own enough places or have enough money to help them all.

If we don't look out for the up and coming generation because we are so greedy we can only think of our own money and finances, what sort of future are we leaving for them?

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20 minutes ago, JohnsonJones said:

I hear people say this, but I'm not seeing it happen anytime soon.  The banks seem to be more careful these days and thus the loans are on much steadier ground

All true, and I admit that there are differences between what could happen now and what did happen in 2008. 

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35 minutes ago, JohnsonJones said:

If we don't look out for the up and coming generation because we are so greedy we can only think of our own money and finances, what sort of future are we leaving for them?

I don't mean to stereotype the baby boomers, but a frequent refrain was that work for one's own legacy. Now it seems many are stuck supporting to one extent or another their adult children.

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2 hours ago, LDSGator said:

In few months/years the housing bubble will pop again and you’ll be able to get a four bathroom/6 bedroom house for about three cheeseburgers and a Wal Mart gift card. So be patient my friend. 

I like to hope so.

But I also ask the price of those cheeseburgers.

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3 hours ago, LDSGator said:

True, but if you think democrats-yes, even very liberal ones, aren’t proud or greedy, that’s very naive. For lack of a better term, “original sin” isn’t political.
 

We laugh at the hypocrisy of conservative republicans who get in sex scandals. And we should. But the bitter pill is that your side bends over backwards to ignore the awkward truth that yes, Bernie Sanders owning three homes while lecturing me about “the poor” is also the same kind of hypocrisy. Ironically based in his pride. 

Only used the Bernie example because it’s the first one that comes to mind. 

You know I have a very love-hate stance towards the Dems, but I don't necessarily view Sanders as a hypocrite. If his policies became reality, his taxes would go up along with the other elites. Same with Liz Warren (my 2020 pick to run against Trump). They seem to understand that the institutional advantages that they built their wealth on are inaccessible to most Americans, and are often detrimental to them. Does that mean I expect them to give up their fortunes and live like middle class Americans? No, and I don't expect that from Jeff Bezos and Elon Musk either. I just want them to have some self-awareness and recognize their ability to make positive change. 

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16 minutes ago, Godless said:

You know I have a very love-hate stance towards the Dems, but I don't necessarily view Sanders as a hypocrite. If his policies became reality, his taxes would go up along with the other elites. Same with Liz Warren (my 2020 pick to run against Trump). They seem to understand that the institutional advantages that they built their wealth on are inaccessible to most Americans, and are often detrimental to them. Does that mean I expect them to give up their fortunes and live like middle class Americans? No, and I don't expect that from Jeff Bezos and Elon Musk either. I just want them to have some self-awareness and recognize their ability to make positive change. 

Understand fully. 

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3 hours ago, JohnsonJones said:

If we don't look out for the up and coming generation because we are so greedy we can only think of our own money and finances, what sort of future are we leaving for them?

I'm hearing a recurring theme from Millennials and such folk.  It goes a little something like this:

"My grandpa supported a family and bought a house by working at his same middle-class job for 30 years.  Me and my wife probably won't be able to afford a house, even with both of us working.  What's up with that?"

It's a dang shame that, somewhere in the '80's, I started hearing people talk about deficit spending in similar ways for a few decades.  The general theme went something like this: 

"Yeah, it's free money now, but don't forget, we're leaving the bill for our children to pay.  Kicking the debt can down the road will hurt generations that follow us."

 

Edited by NeuroTypical
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15 hours ago, NeuroTypical said:

 

"Yeah, it's free money now, but don't forget, we're leaving the bill for our children to pay.  Kicking the debt can down the road will hurt generations that follow us."

 

Unfortunately we are beginning to see the end results of this and worse yet, others pushing to keep creating more debt.  Almost like there is an agenda...

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Well, is rising inflation really a surprise to anyone with Administer Biden in charge?  If people want to have low inflation, high employment with good wages, and stocked shelves, they need to stop electing people whose goals are to fundamentally destroy the Constitution of the United States (Albeit, Biden was not elected, as he clearly stole the election, but that’s another topic for another time).  Still, though, people need to stop electing candidates that are pushing communist/socialist ideals.  Also, vote for strong candidates even if their tweets sound “mean.” 

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I heard the inflation rate is really 14.2% if they would count items they were counting in the 1980s.  But it really depends on what you are talking about.  I heard automobiles are up 20 to 30% higher in cost than a year ago.  Gasoline was around $2.20 per gallon in December 2021.  Now it is priced at around $3.40 per gallon where I live.  That is about 35% higher in cost.

I talked with my wife and said we are just going to supplement losses in food costs with our food storage for now.

Edit:  And my property taxes also went up $90 per month just recently.

Edited by Still_Small_Voice
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On 1/15/2022 at 2:50 PM, Godless said:

You know I have a very love-hate stance towards the Dems, but I don't necessarily view Sanders as a hypocrite. If his policies became reality, his taxes would go up along with the other elites. Same with Liz Warren (my 2020 pick to run against Trump). They seem to understand that the institutional advantages that they built their wealth on are inaccessible to most Americans, and are often detrimental to them. Does that mean I expect them to give up their fortunes and live like middle class Americans? No, and I don't expect that from Jeff Bezos and Elon Musk either. I just want them to have some self-awareness and recognize their ability to make positive change. 

I felt to respond - because I am a little confused how anyone can love either of our political parties.  But I would like to point out why Sanders became rich.  Running for political office is a great way to become rich - but running for president is much better way to invest.   When someone buys broadcast time for advertising (including political advertising) the usual 20% of the advertising purchase goes to the broker that represented the advertising sell.  So if a politician purchases 20 million in advertising - the broker takes home 4 million.  Sanders set his wife up as his media advertising broker (something most running for political office do - including republicans).  The first time Sanders ran for president he spent close to 80 million in media advertising.  This is the reason his house hold suddenly became quite rich and could afford multiple expensive homes (needed for a tax break).  This is why someone like Sanders - who has no chance of ever being elected is so willing to run for president.  This is why and how career politicians are bought and sold by campaign donations.  It is also why such politicians release their tax filings for themselves and not for who ever is their media advertising broker.

This is all why I suspect that rich politicians (many which are Dem. and Rep.) support polities that coincide with the interests of drug cartels rather than any US citizens not involved in the illegal drugs (and other such industries - including sex trafficking - which is really another name for human salve trading) .

But the OP of this thread is about inflation.  I am not an economist but I follow Milton Freeman (a 1976 recipient of the Nobel prize in economics)  He clearly taught that inflation comes from a number of governmental efforts - which included money supply, government spending and below market value interest.  He also said that inflation has a 2 year delay cycle.  This means that Biden has very little to do with current inflation.  Rather it is the government reaction to COVID under the Trump administration.   The problem is that Biden is doing every thing wrong in dealing with inflation.  We have another at least another year before we will feel the effect of what Biden and the Democrats unleased as economic policy last year.  I am thinking that they are banking on the mid-term election before the next round of inflation hits.  I am thinking this is a gross oversite and that we will experience economic woes beyond anything this country has seen in the past.  I can go into great deal why I think so - but the summarize it is because I worked in automation and robotics in manufacturing and I am well schooled in supply chain problems and their effect on the economy.  There are no supply reservoirs.  I do not see any recovery possible or anyone taking steps that will correct supply chain problems.

It is not so much that I think I know so much - because we have never been in such a position that I can see anywhere in history.  Maybe something magic will happen - but I do not believe in magic.  One possibility is that we will learn to live without things that are so common until now.  But I do not see families trying to live with one car and one phone - let alone a year without sugar or some other food commodes.   We expect fresh fruit and vegies regardless of the season.  

I suspect that when we get to the spirit world we will have some very interesting stories to tell concerning the times and season we will soon be seeing.  It will likely seem like the last-days are actually upon us - or so it will seem.   Maybe?

 

The Traveler

 

Edited by Traveler
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