Your paycheck is now worth 3.1 percent less than last year

#52
#52
LouderVol said:
Not really. Only a tiny percentage can afford keeping up with the Jones's.

Most people just know no other way than to live beyond their means. That doesnt make the system wrong. It makes people dumb, willing victims.
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Do you have 200k in the bank? Because that's what will get you a modest home in your city.
 
#54
#54
Velo Vol said:
Lots of people predicted this in 2008/9, and it never came.
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I was one of them. I still don't understand why it hasn't, tbh. I don't know how we can have such massive debt relative to GDP and it have no inflationary effect. I believe a tipping point exists but have no idea where that point is.
 
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#55
#55
McDad said:
I was one of them. I still don't understand why it hasn't, tbh. I don't know how we can have such massive debt relative to GDP and it have no inflationary effect. I believe a tipping point exists but have no idea where that point is.
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It doesn't seem like a foregone conclusion to me, and the bond market reflects that.
 
#56
#56
jvol1 said:
Balanced in what sense? Having some debt is a good thing. Inflation is telling us we're in the "too much" zone right now, but we have a big economy it makes sense to have some debt in the same way it makes sense to take out a loan to buy a house.

Of course this whole thing is kind of long term win for the conservatives because it will undermine social security, which I think is what's really going on.
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We're waaaaaaay beyond "some debt".
 
#57
#57
hog88 said:
Right, for now. I will also add that nobody should be doing 30 year mortgages. If you can't afford the payments on a 15 year you're buying a house too expensive for your income.
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You also shouldn't buy a vehicle if you can't afford to finance at 36 months, but people go 84 every day. I've even seen some go 96
 
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#59
#59
YankeeVol said:
You also shouldn't buy a vehicle if you can't afford to finance at 36 months, but people go 84 every day. I've even seen some go 96
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Agreed. I've seen people fiance $100k+ wake surf boats for 20 years it boggles the mind.

Now I have financed a couple vehicles at 60 months with 0%. With 0% if figure why the hell not use their money.
 
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#60
#60
hog88 said:
Agreed. I've seen people fiance $100k+ wake surf boats for 20 years it boggles the mind.

Now I have financed a couple vehicles at 60 months with 0%. With 0% if figure why the hell not use their money.
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Anything under 2% is basically free money so it makes sense sometimes.
 
#61
#61
jvol1 said:
Balanced in what sense? Having some debt is a good thing. Inflation is telling us we're in the "too much" zone right now, but we have a big economy it makes sense to have some debt in the same way it makes sense to take out a loan to buy a house.

Of course this whole thing is kind of long term win for the conservatives because it will undermine social security, which I think is what's really going on.
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I've always heard that said, but never could wrap my head around it then or now.
 
#64
#64
IMO inflation is a far different animal now than it was when Carter was POTUS and it was almost out of control. Cheap Chinese manufacturing has created 2 sets of data. Housing inflation is soaring. Clothes and computers and crap on the shelves at Walmart are still cheap. There is inflation once again on energy so EVERYTHING will trickle up but it could be gradual… the pandemic throttled spending.

Purchases that consumers typically borrow for before buying, like vehicles, have inflated because of consumer demand created by the cheap money. Food is a good barometer as people typically don’t take out loans to buy groceries (except for credit card debt) but food is heavily dependent on oil.

Sure seems like the high dollar items are being hit hard. Housing, vehicles, and college education due to the cheap money and competition from consumers.

IMO, O’Biden really screwed up with his pipeline EO. But it made oil equities once again investable.
 
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#65
#65
Thunder Good-Oil said:
IMO inflation is a far different animal now than it was when Carter was POTUS and it was almost out of control. Cheap Chinese manufacturing has created 2 sets of data. Housing inflation is soaring. Clothes and computers and crap on the shelves at Walmart are still cheap. There is inflation once again on energy so EVERYTHING will trickle up but it could be gradual… the pandemic throttled spending.

Purchases that consumers typically borrow for before buying, like vehicles, have inflated because of consumer demand created by the cheap money. Food is a good barometer as people typically don’t take out loans to buy groceries (except for credit card debt) but food is heavily dependent on oil.

Sure seems like the high dollar items are being hit hard. Housing, vehicles, and college education due to the cheap money and competition from consumers.

IMO, O’Biden really screwed up with his pipeline EO. But it made oil equities once again investable.
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Without the second data point of cheap retail goods, you'd expect inflation on par with late 70s . early 80s?
 
#66
#66
Heck, borrow as much as possible on real estate at 2%-3% and in another year or two long term bonds could be purchased with yields at twice as much. Or buy a dividend aristocrat ETF for a higher risk/reward profile. I think that residential RE is toppy but the Millennials are the 2nd largest demo and will be competing for housing for another decade or two until more Boomers move from the ‘burbs to the crypts and vaults.
 
#68
#68
McDad said:
Without the second data point of cheap retail goods, you'd expect inflation on par with late 70s . early 80s?
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It kind of seems like there are crazy prices already for housing, big assed pickup trucks, and degrees. I’d think that inflation would already be comparable to the late 70s but maybe the CPI leaves some of those things out. Maybe those things had already crept up and year over year the increases aren’t significant. I’m kind of an idgit when it comes to macro economics and monetary policies. Just my opinions, not stating any facts.
 
#69
#69
Thunder Good-Oil said:
It kind of seems like there are crazy prices already for housing, big assed pickup trucks, and degrees. I’d think that inflation would already be comparable to the late 70s but maybe the CPI leaves some of those things out. Maybe those things had already crept up and year over year the increases aren’t significant. I’m kind of an idgit when it comes to macro economics and monetary policies. Just my opinions, not stating any facts.
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I don't think any of us know for sure. But like Velo posted earlier, the bond markets aren't concerned. Honestly, it doesn't look like any markets are concerned. So either they "know" something or we are all whistling past the graveyard.
 
#70
#70
DinkinFlicka said:
Do you have 200k in the bank? Because that's what will get you a modest home in your city.
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I dont. Which is why I dont own. But I am not worried about keeping up with the jones's.

There is a big difference in what people actually need vs what they want.
 
#71
#71
Velo Vol said:
And postsecondary education.
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Three huge expenditures for families have been hit with big increases. Housing, vehicles, and college. But the borrowing has been cheap. Those paying cash have been hit harder. I think that housing RE is toppy because rates likely go up from here and the big Millennial demo will be secondary to the cheap money going away. Home buyers can afford $x per month so if rates go up the house price has to fall. Or wages need to escalate.
 
#72
#72
McDad said:
I don't think any of us know for sure. But like Velo posted earlier, the bond markets aren't concerned. Honestly, it doesn't look like any markets are concerned. So either they "know" something or we are all whistling past the graveyard.
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As stupid as the fiscal deficits are and the national debt level is, it’s not as concerning if the economy is growing. China has had our lunch but is starring down a demographic headwind. Their population is aging quickly. They are going to have a labor shortage… crazy when there are over a billion of them.
 
#73
#73
Thunder Good-Oil said:
As stupid as the fiscal deficits are and the national debt level is, it’s not as concerning if the economy is growing. China has had our lunch but is starring down a demographic headwind. Their population is aging quickly. They are going to have a labor shortage… crazy when there are over a billion of them.
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why is it not as concerning as long as the economy grows?
 
#74
#74
McDad said:
why is it not as concerning as long as the economy grows?
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I think that the ratio of GDP to the deficits and the debt is more relevant. Manageable leverage if the GDP can grow faster after a fiscal blip. The deficits are a pandemic anomaly. The debt will always creep up… the rate of increase just needs to slow down as things become more normalized.

Kind of like the debt-equity ratio on a corporate balance sheet. Adding more zeros is fine as long as the ratio can be soundly managed.
 
#75
#75
Thunder Good-Oil said:
I think that the ratio of GDP to the deficits and the debt is more relevant. Manageable leverage if the GDP can grow faster after a fiscal blip. The deficits are a pandemic anomaly. The debt will always creep up… the rate of increase just needs to slow down as things become more normalized.

Kind of like the debt-equity ratio on a corporate balance sheet. Adding more zeros is fine as long as the ratio can be soundly managed.
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I think you're mistaken on the debt/deficits as a pandemic anomaly.

I understand the rest. I disagree with the premise. Well, that's not entirely accurate. I can agree with the theoretical premise but disagree with how America applies that premise. Our debt grows faster than our economy. If we could simply cap our debt and allow the economy 50 years to catch up, I think that would be the same as paying down debt today.
 
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