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Inflation Beyond the Stars Thread for April 12


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2022 Apr 12, 12:49am   81,746 views  755 comments

by AmericanKulak   ➕follow (9)   💰tip   ignore  

Since we know the numbers are going to suck since Peppermint Patty is leading the Amen Corner Media to blame Putin for it:
https://patrick.net/post/1344548/2022-04-11-putin-s-price-hike-failing-administrati

Frankly, I prefer my spaceship to have big tits and not fake inflated ones.

EDIT - numbers drop:
America goes back to the 80s: Surging gas prices and higher rents push inflation to 41-year high of 8.5% as White House blames it on Putin invading Ukraine
The consumer price index rose 8.5% in March from a year ago, the fastest increase since December 1981
Housing costs, which make up about a third of the index, have escalated and show no signs of cooling
Gasoline prices soared 49% in March from a year ago as the war in Ukraine rocked energy markets
Biden's administration tried to get ahead of the dire inflation news by blaming Russian leader Vladimir Putin
But Republicans place the blame for soaring prices on 'Democrats' reckless spending and failed policies'

https://www.dailymail.co.uk/news/article-10711311/Inflation-soars-new-41-year-high-8-5.html?source=patrick.net

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675   zzyzzx   2024 Jan 15, 6:12am  

The_Deplorable says





Some quick math here:
New House 3900 / Average income 1731 /yr = 1.733 years income (before taxes) to buy a house.
676   zzyzzx   2024 Jan 15, 6:21am  

Since this has more to do with inflation:
https://finance.yahoo.com/news/middle-aged-millionaires-row-average-101203138.html

Average US 50-something now has net worth over $1M
677   Misc   2024 Jan 15, 6:21am  

In 1938 people didn't use mortgages to buy property. They just saw anyone who did have their properties go back to the bank.

Also, most people's life savings were lost because of the thousands of bank failures.
678   Misc   2024 Jan 15, 6:24am  

zzyzzx says

Since this has more to do with inflation:
https://finance.yahoo.com/news/middle-aged-millionaires-row-average-101203138.html

Average US 50-something now has net worth over $1M


That's the Mean average including the super-wealthy. The Median is still a respectable $250k.
679   stereotomy   2024 Jan 15, 2:03pm  

zzyzzx says


The_Deplorable says






Some quick math here:
New House 3900 / Average income 1731 /yr = 1.733 years income (before taxes) to buy a house.


That's because back then, there were no 30-year, non-callable mortgages. They were 5 year balloon loans. Interest only for 5 years, then you had to pay off the note or be foreclosed on. This is why so many people lost their homes in the 30's. Banks called the notes on people who were 99% paid up, and worked their way down. The most responsible debtors were the first lambs to the slaughter.
680   AD   2024 Jan 15, 5:56pm  



681   Patrick   2024 Jan 20, 8:45am  

https://notthebee.com/article/biden-stopped-for-a-photo-op-in-a-north-carolina-restaurant-but-people-noticed-how-expensive-the-menu-got-since-he-was-last-there-in-2020-




It's true, though. Look at those numbers:

$4.99 for a junior tray in 2021, $6.59 today
$5.99 for a normal tray in 2021, $7.69 today
$2.99 for a "Big Double" then, $3.99 today
$1.39 for a corn dog then, $1.99 today
And on and on. Prices just keep going up!
682   AD   2024 Jan 20, 8:28pm  

$1.29 per pound for chicken legs at Walmart in Florida panhandle

Remember back in 2019 there were $1.01 about a 5% annual increase in chicken leg prices since then :-/
683   RayAmerica   2024 Jan 21, 3:24pm  

Proof the Middle Class in American Is Already Toast

"Inflation is way worse than everyone thinks."

https://rumble.com/v48fknb-proof-the-middle-class-in-american-is-already-toast.html
685   AD   2024 Jan 21, 5:30pm  

Eman says

https://x.com/charliebilello/status/1749147837181358589?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q


Eman, I'm not a gold or silver bug, but gold is at least continuing to track with (or exceed) inflation.

.
686   Eman   2024 Jan 21, 7:51pm  

ad says

Eman says


https://x.com/charliebilello/status/1749147837181358589?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q


Eman, I'm not a gold or silver bug, but gold is at least continuing to track with (or exceed) inflation.

.

The data suggests gold has about doubled the CPI in the last decade.

We all know how real estate has performed in the last decade. We also know how much rents have gone up, which means likely higher cash flow. The mortgage principal has also been paid down.

Real estate has 4 ways of making money: 1) value-add/sweat equity aka forced appreciation, 2) market appreciation, 3) cash flow, and 4) principal pay down.

Leverage is a double-edge sword. History suggests it has a high probability of success if it’s prudently used.
687   stereotomy   2024 Jan 22, 4:10pm  

If you go back to around Y2K, then gold has outperformed all other markets (obviously not individual stock picks, but then again, we're all not Congress).
688   Eman   2024 Jan 22, 6:29pm  

stereotomy says

If you go back to around Y2K, then gold has outperformed all other markets (obviously not individual stock picks, but then again, we're all not Congress).


This is where it gets muddy. I don’t believe gold can be leveraged like real estate where 20-25% down can control an asset.

My wife bought this house in 1999 for $300k. She put 20% down. It’s worth $1,486M now. Equivalent rent used to be $1,800/month and now $4.2k. How do we calculate the ROI? This is where I find Robert Shiller’s formula is off. Almost no one buys a house with 100% cash especially a starter house. Some people put down as little as 3%.




689   AD   2024 Jan 22, 7:17pm  

Eman says


My wife bought this house in 1999 for $300k. She put 20% down. It’s worth $1,486M now. Equivalent rent used to be $1,800/month and now $4.2k. How do we calculate the ROI? This is where I find Robert Shiller’s formula is off. Almost no one buys a house with 100% cash especially a starter house. Some people put down as little as 3%.


ROI is based on equity of about $1,186,000 (accounts for mortgage balance and cost to sell) from the $60,000 deposit. I will assume worst case of $0 net income (i.e., revenue minus expenses equals zero).

From 1999 to present day, you earned about $19 for every $1 invested for that residential real estate investment.

.
690   Eman   2024 Jan 22, 9:14pm  

Interestingly, we bought this house in 2013 for $440k as the housing market was coming out of the Great Recession. We had to put 25% down as it was an investment property. We rented it for $2,650/mo then and gradually raised it to $4k before we took the house back last year. It’s worth $1.4M today.

From an ROI perspective, I guess this one performs better. Right timing can really magnify the ROI.




691   Eman   2024 Jan 22, 9:16pm  

AD says

Eman says



My wife bought this house in 1999 for $300k. She put 20% down. It’s worth $1,486M now. Equivalent rent used to be $1,800/month and now $4.2k. How do we calculate the ROI? This is where I find Robert Shiller’s formula is off. Almost no one buys a house with 100% cash especially a starter house. Some people put down as little as 3%.


ROI is based on equity of about $1,186,000 (accounts for mortgage balance and cost to sell) from the $60,000 deposit. I will assume worst case of $0 net income (i.e., revenue minus expenses equals zero).

From 1999 to present day, you earned about $19 for every $1 invested for that residential real estate investment.

.

I think gold was around $250-$300/oz around 2000? Then it has gone up about 8x in 24 years?
693   richwicks   2024 Jan 24, 9:38pm  

The_Deplorable says




https://twitter.com/mazemoore/status/1749243622061744376


So, he's just like every president. Tell me anything that any president has taken responsibility for including Trump.
694   Eman   2024 Jan 30, 9:50am  

People are rich. Just give me the cash. I don’t have to watch the Super Bowl.



https://x.com/charliebilello/status/1752367848888955020?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q
695   AD   2024 Jan 31, 3:09pm  

.

got in mail today ... looks like a good deal for whopper meals in Florida panhandle .. same coupon price of $6.99 as back in 2021 ...

.



.
698   Misc   2024 Feb 3, 5:38pm  

You can make a ton of money at market tops, but watch that timing.
699   HeadSet   2024 Feb 3, 6:11pm  

Misc says

You can make a ton of money at market tops, but watch that timing.

If we could time the market, we would all be rich.
700   stereotomy   2024 Feb 3, 6:52pm  

I did it one time, thanks to iTulip - cashed out silver at ~$49. What happened next was not nearly as profitable until 2020. Ugh.
701   Eman   2024 Feb 3, 11:01pm  

If this is true, why is the Fed holding back on cutting rates while CRE is on the verge of imploding? History suggests the Fed will likely be late gain in cutting rates.


702   HeadSet   2024 Feb 4, 6:38am  

Eman says

why is the Fed holding back on cutting rates while CRE is on the verge of imploding?

If the Commercial Real Estate sector is dependent on subsidized low interest rates to stay afloat, then the sector is just a popping bubble. What you are calling a crash is just a return to actual market prices from an easy credit runup. The purpose of the FED is not to keep CRE prices elevated.
703   Eman   2024 Feb 4, 5:39pm  

For anyone who believes he’s smarter than the Fed, Powell said 3 rate cuts this year. WallStreet is trying to twist the Fed’s arm into 5-6 cuts. 😂

Anyways, the number of rate cuts is highly dependent on the state of the economy.



https://x.com/triplenetinvest/status/1754301062784413755?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q
704   AD   2024 Feb 4, 6:22pm  

How does he know there will be 3 cuts if he has no idea if 12-month inflation will remain at or below 2.25% for at least 2 consecutive months?

Annual PCE is 2.6%. Seems like he is being pressured by the Biden White House and Elizabeth Warren.
705   HeadSet   2024 Feb 4, 8:04pm  

Still, that is 3 rate cuts too many.
706   Blue   2024 Feb 4, 9:24pm  

Looks like the inflation may get much worse within very few years!

https://thehill.com/homenews/4447860-powell-the-us-is-on-an-unsustainable-fiscal-path/
Powell: ‘The US is on an unsustainable fiscal path’
Federal Reserve Chair Jerome Powell said “the U.S. is on an unsustainable fiscal path” in a “60 Minutes” interview with Scott Pelley released Sunday.

“The U.S. federal government’s on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy. So, it is unsustainable. I don’t think that’s at all controversial,” Powell said when asked if the national debt is a danger to the economy.

The U.S. national debt topped $34 trillion for the first time ever in early January, just over three months after surpassing the $33 trillion mark, according to data released by the U.S. Treasury.

Congress has punted on spending deadlines three times since the end of September as it grapples with how to fund the government amid tensions about the ballooning national debt.
707   AD   2024 Feb 4, 9:52pm  

Blue says


“The U.S. federal government’s on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy. So, it is unsustainable. I don’t think that’s at all controversial,” Powell said when asked if the national debt is a danger to the economy.


That is why debt needs to be normalized as far as measuring it as (1) debt payment or servicing as a percentage of the federal budget (2) debt payment as a percentage of tax revenue (3) debt payment as a percentage of GDP and (4) total federal debt as a percentage of GDP

Now you could also look at debt not owned by the social security trust fund... call it adjusted debt and examine that as a percentage of GDP

They need to at least "cut spending" by only increasing it at least 2% below annual inflation for a minimum of 3 consecutive years.

Then see how that impacts the total debt to GDP ratio as it should lower it from presently around 120% to pre pandemic levels (about 105%).

.
708   Eman   2024 Feb 5, 6:07am  

I’m not smart enough to know if the data is manipulated or not. Boots on the ground suggests the hitech job market has been tough the last year or so while blue collar jobs aren’t



https://x.com/vigilantfox/status/1754140246873190876?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q
709   Eman   2024 Feb 5, 6:10am  

The Fed said only 3 cuts this year so bond yields are rising. We’ll continue to sit on our rear end and do nothing.
710   Eman   2024 Feb 5, 6:15am  

Small caps continue to struggle. History suggests small caps tend to do well when the Fed starts to cut rates. Let’s see how it will play out this time.
711   Eric Holder   2024 Feb 5, 12:33pm  

A new "inflationary shock" was predicted for the Russian economy

Having experienced the strongest devaluation of the ruble in eight years and a sharp acceleration of inflation, the Russian economy may face a new shock next year, warns Alfa Bank.

According to his forecast, by the end of the year, the dollar rate will again rise to the 100 ruble mark, which it broke through last summer. "The key factor for the ruble exchange rate should be the search for new sales markets" for Russian goods, Alfa Bank explains: if this can be done, the inflow of foreign exchange earnings will increase.

But there are still problems with it: according to the results of last year, export revenues of the Russian economy fell by almost 30%, to $422.7 billion, the lowest level since the 2020 pandemic. This promises "risks of weakening of the ruble", which, in turn, "create the threat of new inflationary shocks", write analysts of Alfa Bank.


https://t.me/moscowtimes_ru/18973

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