A Short History on Inflation - Why Component Costs and No Costs Are Going Down Soon

[Buxndiverdux]

Bottom line is the lower you are on the working mans financial totem pole, the harder you are getting screwed. The very people these political clowns claim to protect are the ones getting hit the hardest.

Even the entitlement crowd is taking a big hit. When will these people learn?

The only way government can generate money are taxes, printing or borrowing. All 3 ways are bad for anyone that takes a breath in this country.

 

[Veteran]

Yes, Small govermment helps me breath better.

More money in my pocket, more ink in my ink well, and more money at the bank for me to borrow at lower interest.

 

[300sendero]

People are forgetting the other side of the equation. Wage growth is strong and employees are in high demand. My company added 6 vacation days this year to sweeten the benefits package. We got zero US holidays but got 26 days of PTO last year, then they added 6 more days this year. We are giving employees the option of being partially, 100%, or 0% remote, with nothing written in stone or mandated, so if you choose one option and it isn't working for you, you can switch.

Wage growth is strong, as is inflation. Real estate prices are up, but so is home equity (and so are rents). Remember that house you bought 3 years ago at 3.5% for a 30 year? Inflation makes that less of a burden each month, and the asset itself is very likely worth quite a bit more today. Asset up, real borrowing costs down makes for a pretty good return.

I'm not saying everything is rosy and not everyone owns their home, nor does every job have the same wage growth. But what I am saying is that you can't lament inflation alone without mentioning other factors that help offset the impact. Every single piece of the economy is tied together and should be looked at holistically.

How does inflation make that less of a burden each month? Wages aren't going up as fast as inflation. With the home value going up so are your taxes, repairs, water, power, etc etc. if you sell it to buy the next you can't rent in the mean time and replacing it is even more expensive. It's harder to make that payment every month not easier. Now you have $5 gas and food prices are following that fast. Unless your cashing out of a house it's not good no matter what holistic medicine you're on

 

[snox801]

People are forgetting the other side of the equation. Wage growth is strong and employees are in high demand. My company added 6 vacation days this year to sweeten the benefits package. We got zero US holidays but got 26 days of PTO last year, then they added 6 more days this year. We are giving employees the option of being partially, 100%, or 0% remote, with nothing written in stone or mandated, so if you choose one option and it isn't working for you, you can switch.

Wage growth is strong, as is inflation. Real estate prices are up, but so is home equity (and so are rents). Remember that house you bought 3 years ago at 3.5% for a 30 year? Inflation makes that less of a burden each month, and the asset itself is very likely worth quite a bit more today. Asset up, real borrowing costs down makes for a pretty good return.

I'm not saying everything is rosy and not everyone owns their home, nor does every job have the same wage growth. But what I am saying is that you can't lament inflation alone without mentioning other factors that help offset the impact. Every single piece of the economy is tied together and should be looked at holistically.

Part of the problem is wage growth is artificially raise by the government also paying so well for people not to work.
And I have a fairly large home loan. What I'm saving on that is eaten up far faster by inflation of all goods. Yes some aspects are gonna seem good but it's much scarier when actually looking at the holistic approach.
How do you remove dollars? Interest rates increase. So they do that boom housing crashes, along with home value. We are only a year into massive inflation. All the things you pointed to as being good are being caused by it but are short term spikes before the crash. I'm old enough to remember 2008.
How did your home price look then? That was after a brief period of huge value gains and job growth.

 

[Len Backus]

I am not referring to anyone specifically...but please keep this topic civil as the post count grows.

 

[nmarth88]

Simple: inflation>wage increases= less buying power. To simply say that it makes a less of a burden when everything outpaces wages in simply untrue. I pay $320 a week in fuel cost, my energy bills have increased when I'm using less energy, and the dollar is being devalued. I'm no economist, but the math to me is simple. Regardless of my home equity in real terms I have gained value, but my property taxes have also increased my home payment 100 a month. In other words it does me no good unless I borrow against my home for some monetary gain.

Just my .02

 

[blackbrush1]

The other elephant in the room.....all of those that have actually left the workforce as they have been made comfortable enough to stay home on the backs of taxpayers. This is heavily costing these companies and the consumer. Leupold, Nosler for example have real issues with this in the PNW. Wyoming is in their sights

 

[1mechanic]

And let's not forget that as wages go up then the product or services have to go up, it's a vicious cycle

 

[rcol317]

Wow, You're on top of your game Len, Thanks for the reminder. Truth is this is a generational issue that those under 50 really don't have a fear of inflation because of no experience. Those of us that lived through the late 70's and early 80's are fearful. When it takes $100 to buy what $20 bought it's really hard for pay increases to keep up. When you put everything on your plastic and then find no more money in your bank account to pay the bill it's a wake up call. I think we're going to see some wake up calls in the future. I remember going to the grocery store and half the items you put in the basket didn't have a price until check out because prices were changing daily and hourly. There may come a day when $140 for a brick of primers sounds good. I hope not!!!

 

[Lee Deming]

Several folks I knew were ruined in the inflation of the 70's and 80's. I bought my first house during that time. Paid 11.5% on a 30 year mortgage. I hope people connect the right dots.

 

[Will Gray]

Hillsdale College will send you Imprimis for free, just email and ask.

 

[Veteran]

Several folks I knew were ruined in the inflation of the 70's and 80's. I bought my first house during that time. Paid 11.5% on a 30 year mortgage. I hope people connect the right dots.

Yes interest rates on home mortgages went all the way to 21%
until Reagan hired Sheriff Paul Volker to put the fire out.

He did but it took brute force at the FED, and we had to have a whopper of a recession in 1982 to get things under control.

Double B Ugly......

 

[Will Gray]

Buy your brass from PPU and Starline, (or once fired brass) pick a caliber they sell for. If you go for Lapua 6.5 you will pay a lot. Just shoot 243, 308, 30-06 and search for bargains, use other powders than IMR and Hodgon. Primers are a problem. I have seen $117/thousand lately. A store here wanted $62 for one pound of IMR4831. HAZMAT fees!!!! a problem for small orders.

 

[Lee Deming]

Yes interest rates on home mortgages went all the way to 21%
until Reagan hired Sheriff Paul Volker to put the fire out.

He did but it took brute force at the FED, and we had to have a whopper of a recession in 1982 to get things under control.

Double B Ugly......

My next house was at 7.5%. I thought it was a bargain.