Inflation Plays?

[Chester01]

The inflation is not going to be bananas in the US, the reality is the government is stable, we can pay the bills, and the economy is/will grow and unemployment is not bad given what just occurred with Covid. The inflation is being driven by these extremely low interest rates. Things will stabilize and then plateau...things never get cheaper.

[enjoythemusic]

Originally Posted by Chester01

The inflation is not going to be bananas in the US.

Lumber prices, copper, food....... We're at 6% by the numbers, yet seems more like 8% to the everyday users of USA currency.
http://www.shadowstats.com/alternate...flation-charts

the reality is the government is stable.

Ummm............

We can pay the bills.

Yes because Federal Reserve currency is freely 'printed'. In reality, liabilities and other items means the USA is in debt over 100 trillion. Of course currency can be highly devalued as it's freely 'printed', just like many Banana Republics.

and the economy is/will grow and unemployment is not bad given what just occurred with Covid. .

O... k.... Yet decades ago a single income could support a family of four. This is not true today. Why?

The inflation is being driven by these extremely low interest rates. Things will stabilize and then plateau...things never get cheaper.

Reminds me of the naive Neel Kash n' Carry, same guy who helped push TARP and..... was bribed with a Fed position.

Things never get cheaper, agreed as I'm assuming you're basing it on currency and not items of intrinsic value. So yes, due to the current central bank scheme of unstable currency devaluation.....

But it's only currency, what could possibly go wrong.... and who really gets hurt hard due to devaluation? Why does the Fed buy USA debt, when then Fed Chair Bernake explicitly said the Fed will not monetize debt. Is the Fed monetizing debt?

Who said the following: "When things get serious, you have to know how to lie."

[Chester01]

Originally Posted by enjoythemusic

Lumber prices, copper, food....... We're at 6% by the numbers, yet seems more like 8% to the everyday users of USA currency.
http://www.shadowstats.com/alternate...flation-charts



Ummm............




Yes because Federal Reserve currency is freely 'printed'. In reality, liabilities and other items means the USA is in debt over 100 trillion. Of course currency can be highly devalued as it's freely 'printed', just like many Banana Republics.





O... k.... Yet decades ago a single income could support a family of four. This is not true today. Why?




Reminds me of the naive Neel Kash n' Carry, same guy who helped push TARP and..... was bribed with a Fed position.

Things never get cheaper, agreed as I'm assuming you're basing it on currency and not items of intrinsic value. So yes, due to the current central bank scheme of unstable currency devaluation.....

But it's only currency, what could possibly go wrong.... and who really gets hurt hard due to devaluation? Why does the Fed buy USA debt, when then Fed Chair Bernake explicitly said the Fed will not monetize debt. Is the Fed monetizing debt?

Who said the following: "When things get serious, you have to know how to lie."

I don’t disagree, but we live in a world where every major country is in debt (and printing money or some other monetary gymnastics) it’s about the perception of ones ability to pay back the debt. I also never said inflation is not happening, it is and yes the printing of $$ is an issue but so is the artificially low interest rates that have become like a drug and they are riding the bull for 12 years now and don’t want to tick that up even a 1/2 point.


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[EEpro]

Originally Posted by Chester01

I don’t disagree, but we live in a world where every major country is in debt (and printing money or some other monetary gymnastics) it’s about the perception of ones ability to pay back the debt. I also never said inflation is not happening, it is and yes the printing of $$ is an issue but so is the artificially low interest rates that have become like a drug and they are riding the bull for 12 years now and don’t want to tick that up even a 1/2 point.


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US is one of the cleanest of the dirty shirts as Bill Gross used to say.

[jltait]

Don’t worry. Everything is fine.

[enjoythemusic]

[QUOTE=Chester01;11442303]I don’t disagree, but we live in a world where every major country is in debt (and printing money or some other monetary gymnastics) it’s about the perception of ones ability to pay back the debt. <<<

Agreed, it's now a PR campaign to the bottom. All that central banks and governments can do is jabber-jaw and pray their scheme CONvinces people.

You can't have confidence in a currency today... without the CON.


>>>I also never said inflation is not happening, it is and yes the printing of $$ is an issue but so is the artificially low interest rates that have become like a drug and they are riding the bull for 12 years now and don’t want to tick that up even a 1/2 point. <<<

Cool and many thanks for correcting me. Agreed. Look fwd to seeing how this all plays out. We're good here

Why can't a family today live on one income as we did decades ago?

Are central banks monetizing their country's debt?

Bonus Question: How has the theft of income value through currency devaluation negatively affected family life... and society in general?

[Chester01]

[QUOTE=enjoythemusic;11442350]

Originally Posted by Chester01

I don’t disagree, but we live in a world where every major country is in debt (and printing money or some other monetary gymnastics) it’s about the perception of ones ability to pay back the debt. &lt;&lt;&lt;

Agreed, it's now a PR campaign to the bottom. All that central banks and governments can do is jabber-jaw and pray their scheme CONvinces people.

You can't have confidence in a currency today... without the CON.


&gt;&gt;&gt;I also never said inflation is not happening, it is and yes the printing of $$ is an issue but so is the artificially low interest rates that have become like a drug and they are riding the bull for 12 years now and don’t want to tick that up even a 1/2 point. &lt;&lt;&lt;

Cool and many thanks for correcting me. Agreed. Look fwd to seeing how this all plays out. We're good here

Why can't a family today live on one income as we did decades ago?

Are central banks monetizing their country's debt?

Bonus Question: How has the theft of income value through currency devaluation negatively affected family life... and society in general?

That’s a tough question, but it’s likely that we are all on the rat wheel longer, and longer each day. It’s like folks are climbing like the old donkey Kong game and someone is throwing barrels at them trying to knock them down as they climb up. And even before inflation has been in the news the past year or so, I started noticing it with healthcare 15 years ago. Every time someone got a raise, say 2-4% healthcare costs went up 10%, not only erasing the raise, but actually worse off every year.


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[Chester01]

Originally Posted by EEpro

US is one of the cleanest of the dirty shirts as Bill Gross used to say.

Indeed. And this will have an end. Once the shareholders have squeezed, strangled, wrestled, and shook the public out of every last dime of their stimulus dollars, and then some, and Joe consumer stops spending (hitting the shareholder) costs will come down or at least cease rising. It’s a a shell game. Govt gives stimulus to folks to lift them up, everyone raises prices, throws out excuses to justify that, and Takes the stimulus money. Little like sharks smelling blood (money in those metaphor) is what is seems like and they pouncing.


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[speedyomega]

Originally Posted by EEpro

US is one of the cleanest of the dirty shirts as Bill Gross used to say.

I'm not even sure that's true, but even if it were; the fact other countries are ruining their currency doesn't mean we don't have to worry about inflation ruining ours. I'm still lookin' for those inflation recs!!!!!! Gold, crypto....real estate?...maybe some commodity etfs?

[EEpro]

Originally Posted by speedyomega

I'm not even sure that's true, but even if it were; the fact other countries are ruining their currency doesn't mean we don't have to worry about inflation ruining ours. I'm still lookin' for those inflation recs!!!!!! Gold, crypto....real estate?...maybe some commodity etfs?

You need little of them all because no one can predict the future. I have 25-30% in a blend of those. Even Wealthfront now allows these choices (sans crypto) and rebalances for free for you.

During hyper inflation in Weimar the stock market did just fine losing only 20% purchasing power while the currency collapse to nil.

[landroverking]

I would pick silver over gold.
Real Estate, depending on property taxes.
The new age coins, Crypto I have concerns.
Did you see what the market did today after Musks comments on SNL?

[huncho]

buy more rolexes lol

[Carrera911]

Originally Posted by landroverking

I would pick silver over gold.
Real Estate, depending on property taxes.
The new age coins, Crypto I have concerns.
Did you see what the market did today after Musks comments on SNL?

I did, DOGE went down 30% and now bullish again. Great opportunity to pick up more.

[enjoythemusic]

Originally Posted by huncho

buy more rolexes lol

But even the Rolex store in Vegas had no Rolexes.

[superdog]

So as per OP, what are people actually doing?

Are you folks preparing or already comfortable with how you are invested? I imagine long term investors are not changing too much.

But with changing times, should come changing strategies, no?

Curious what specific things you guys might, or might not, be doing.

[Swearengen]

Blueberry GMT Inserts could be big

Originally Posted by egri

I'm long on tulips and new railroads. Also the South Sea Company; there's lots of promise there and they'll turn it around soon.

[beshannon]

Originally Posted by speedyomega

Just curious what kinda stuff you guys remember or plan on buying? Ideally I would like to hear some answers before a sandwhich costs $700 haha thanks!

I have looked at this thread trying to think of a way to answer.

The answer is, it depends on your situation, risk tolerance, liquidity, current balance sheet and goals.

Unless you are just hoping and praying to make quick fast money

Good luck!

[904VT]

Biggest MOM CPI growth rate since 81 and YOY since 2008. If companies can pass thru the inflation to end consumer they should do better. But that just means inflation hits the consumer instead, while stock prices become inflated. Either financial asset inflation and/or consumer goods inflation are possible.

[enjoythemusic]

To pass through prices, income will need to have more value / buying power. Keep an eye on food inflation imho.

Once the trillions in CV subsidies are discontinued........

[TC94]

Originally Posted by superdog

So as per OP, what are people actually doing?

Are you folks preparing or already comfortable with how you are invested? I imagine long term investors are not changing too much.

But with changing times, should come changing strategies, no?

Curious what specific things you guys might, or might not, be doing.

I have an allocations in bitcoin and ethereum. But the risks are mitigated by keeping the overall percentage low. Should they continue to soar, my portfolio will benefit. Should they crash 50%, my annual return won’t take much of a hit, and I entered almost all of my long positions in 2019. I’ve rolled out as prices have increased to keep the allocation percentage where I want it to be. That has been a rewarding strategy so far.

The stock market isn’t done. Whether or not the Fed steps in to slow inflation or allows it to run on its own, there’s literally nowhere else to park money. Cash still has poor returns, bonds are terrible during inflation. Metals will have short moments, but unless you time them perfectly, you won’t be that successful.

Trillions in cash still sets on the sidelines waiting for market dips. As the economy picks up steam, earnings will grow. Those who feel they missed out on the last few runs will remember this and move some of that cash into stocks.

It will be bumpy, but stocks will likely still be the easiest path to out earn inflation over the next 5-10 years. Real estate probably, but that takes more experience, is less hands-off, and tends to recover much more slowly when there’s a crash.

If you plan on retiring in the next 2-3 years, raise cash with each market rise. If you have a few decades buy stocks at regular intervals or on the dips.

[kaiserphoenix]

Uhm...Rolex??

[airchitect]

Basically stocks, real estate, your own education, and your own business. These are always the best sources of long term gains.


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[eanzenberg]

Originally Posted by enjoythemusic

O... k.... Yet decades ago a single income could support a family of four. This is not true today. Why?

A couple of factors: More women than ever have college degrees and are working. Houses are 50% larger than they used to be, goods are technologically more advanced and safer (cars) than they used to be. Cities are safer than they used to be. But what’s missing is, today you can live on one-income as a fam of 4 in the majority of the US…just probably not where you particularly would like to live. You see NYC or SF today and think wow those are great places to live (at least at end of 2019). 70 years ago those big cities had more crime, pollution, filth and were less desirable than today.

And you need to pay for all that progress :).

[enjoythemusic]

^^^ best answer I ever got on that question

[JasoninDenver]

I am still buying dips into dividend king stocks for a large percentage of our portfolio. Hopefully, our current real estate holding (overweighted already) will not do too poorly with inflation pressures.

However, I am considering refinancing the house to role in a HELOC remodel loan that we had intended on paying off in a couple of years.

What does everyone think of having a larger share of debt (and more cash to plow into other investments) at a low interest rate in inflationary times?

[GB-man]

Locking in low interest debt is clearly beneficial if you forecast interest rates increasing and asset prices going up.

As always it’s leverage and I would only do so if your income is extremely “recession proof” for lack of a better term.

[JasoninDenver]

Originally Posted by GB-man

Locking in low interest debt is clearly beneficial if you forecast interest rates increasing and asset prices going up.

As always it’s leverage and I would only do so if your income is extremely “recession proof” for lack of a better term.

We are as recession proof as anyone can get so the income is solid.

The rate of asset appreciation is what has my stymied right now. Our suburban neighborhood has seen unprecedented demand and price increases similar to much of the country but has always weathered downturns much better than the rest of metro Denver. Worst case scenario (similar to 08-09) we could see a 10% drop. Possibly less since a vast majority of our homes are all cash deals.

I am hoping someone has a crystal ball.

[scarlet knight]

Originally Posted by JasoninDenver

I am still buying dips into dividend king stocks for a large percentage of our portfolio. Hopefully, our current real estate holding (overweighted already) will not do too poorly with inflation pressures.

However, I am considering refinancing the house to role in a HELOC remodel loan that we had intended on paying off in a couple of years.

What does everyone think of having a larger share of debt (and more cash to plow into other investments) at a low interest rate in inflationary times?

I invest out of current income. If I lose it, I don’t owe it back.

[superdog]

Originally Posted by enjoythemusic

let's say the bubble drops 50%, crypto is still doing far better than many 'investments'.......... and ALL currency.

About a 40% decline since this discussion. Just a few short weeks.

Maybe it’ll go up again. Maybe it’ll lose another 40%

My concern is t necessarily the buy and hold people that, when the wash comes out, makes a good return.

My concern is the legions of overnight millionaires that spent recklessly, didn’t think about a tax liability, and just saw their top water line mark lose 40%.

Feels eerily similar to the dot.com bubble or even the housing bubble. Different, sure. But enough similarities to create the comparison.

Granted, I was born nervous. But it appears you simply can’t do much with crypto. I still don’t understand the actual value.

Not downplaying it. I’m certain it’s a great move for the savvy investor, which I am not. For the masses tho, I think it’s a recipe for disaster.

[huncho]

Originally Posted by superdog

About a 40% decline since this discussion. Just a few short weeks.

Maybe it’ll go up again. Maybe it’ll lose another 40%

My concern is t necessarily the buy and hold people that, when the wash comes out, makes a good return.

My concern is the legions of overnight millionaires that spent recklessly, didn’t think about a tax liability, and just saw their top water line mark lose 40%.

Feels eerily similar to the dot.com bubble or even the housing bubble. Different, sure. But enough similarities to create the comparison.

Granted, I was born nervous. But it appears you simply can’t do much with crypto. I still don’t understand the actual value.

Not downplaying it. I’m certain it’s a great move for the savvy investor, which I am not. For the masses tho, I think it’s a recipe for disaster.

i posted this in another thread but the price of bitcoin is not very indicative. majority of the big money is buying it otc to stay away from setting huge buy orders on exchanges and making the price go up. even though its been a super red week it was reported that $10b worth of btc has been bought in the past month. regardless, it can always go to 0 at any moment so who knows

also can't believe that a ceo of a $600b company can be this much of a clown and get away with it