INFLATION--FED's cutting rates again...
- Thread starter Chop
- Start date
The COLA we received on our Social Security (and my USAF retirement check) helped - but I'm already seeing additional erosion of purchasing power as inflation continues. Inflation is the most unfair tax of all.
Not if you are retired or on a fixed income.
Not talking about past inflation. I’m taking about later this year when there is 5.5% interest rate on money and 3.5% inflation. Between earning interest in a money market account and COLA increases on SS, you shouldn’t be regressing. You are free to blame the inflation here to date on the Fed and congress for their woke monetary policies.
Obviously, you haven't retired yet. COLA is always a year behind, which means retirement account withdrawals that eliminate any interest gains.
Please tell me which of the 3 scenarios that you prefer regarding inflation and interest rates:
a) 0.1% interest rate and 2% inflation
b) 5.5% interest rate and 3.5% inflation
c) 4% interest rate and 9% inflation
If I understood the Fed haters on this board correctly, the sound money policy of (b) is much preferred over (a) and (c). While (a) looks enticing (which we had for the most part since 2009), it invariably leads to (c) due to loose money floating around in the economy.
AC
2,500+ Posts
As if this isn't bad enough. Now Biden is selling 26 Million more gallons of Oil from the Strategic Petroleum Reserve. This will spark more fuel inflation long term. If fuel is up 1.5% food is up 10.1% and rent is up 7.9% over the last year. None of which is part of the CPI calculation, it is just wrong to say wages are keeping up and there is no inflation. You can quote Larry Summers and Paul Krugman all day long. They are media hacks. They say what they are told to say. The US economy is being sent off a cliff. Only those who study this and understand it will be better off.
Bitcoin, Physical Gold, Physical Silver, Land. Keep extra cash around too. It's time to prepare. There will be a war on cash, CBDC is going to attempt to be rolled out. We all must resist that. It is good for none of us. You can laugh at me, but eventually it won't be funny anymore.
AC
2,500+ Posts
We need a whole new monetary system. END THE FED!
AC
2,500+ Posts
Next 12 months: Stock Crash, RE Crash, Precious Metals & Bitcoin boom. Especially Bitcoin. Fed Funds rate hovers in the 4% to 6% range.
First of all, while the first and maybe the second COVID payments were justified, the last COVID payment screwed the equation as all they did is add to the debt. If the Fed Chair was someone who could think outside of a think tank that would help. Now indications are Goolsbee will be appointed the next Fed Chair. If he is the best we have interest rates will not make a difference as he is nothing but a political hack.
To answer your question my preference is low inflation. No, to extremely low interest rates do not bother me as money can still be raised and utilized.
The mishandling of the oil and gas industry may be this Administration's biggest fault.
As if this isn't bad enough. Now Biden is selling 26 Million more gallons of Oil from the Strategic Petroleum Reserve. This will spark more fuel inflation long term. If fuel is up 1.5% food is up 10.1% and rent is up 7.9% over the last year. None of which is part of the CPI calculation, it is just wrong to say wages are keeping up and there is no inflation. You can quote Larry Summers and Paul Krugman all day long. They are media hacks. They say what they are told to say. The US economy is being sent off a cliff. Only those who study this and understand it will be better off.
Bitcoin, Physical Gold, Physical Silver, Land. Keep extra cash around too. It's time to prepare. There will be a war on cash, CBDC is going to attempt to be rolled out. We all must resist that. It is good for none of us. You can laugh at me, but eventually it won't be funny anymore.
There's definitely a war on cash, and it's been going on for a long time. For instance, some sports venues aren't taking cash anymore, only cards. Use cash whenever you can. Cash won't give you the Wuhan Coronavirus. That's the best thing about so many of the recent immigrants--they seem to mostly use cash.
AC
2,500+ Posts
They can’t rig CPI enough to get inflation down to 3.5%! I know, I know FOMC says “ hold my beer”. If they do it, it will be a rigged number!
Monahorns
10,000+ Posts
If you want to see graphs and stuff. Looks at month over month inflation and different sectors.
Food and Shelter Prices Keep Climbing as CPI Growth Hits a Three-Month High | Ryan McMaken
Food and Shelter Prices Keep Climbing as CPI Growth Hits a Three-Month High | Ryan McMaken
Excerpt from the link:
"With the CPI rising both month over month and year over year, it’s a bit of a stretch to say price inflation “came down” in January. It would be more accurate to say that the rate of increase slowed very slightly."
Apparently the Biden Administration failed Econ 201. If the rate of inflation decreases slightly, it doesn't mean that prices decreased - it means that the rate of increase slowed a bit, while prices are still going up.
And I don't understand why food prices are included in the "Core CPI." I betcha nearly all people need to eat, and therefore must purchase food. Trips to the grocery store are very painful to the checkbook.
Not to diminish your point, but there were a lot of one-offs in the January reports for CPI, unemployment, and retail sales that won’t be repeated for the rest of the year. We need to wait another month for a better read on the economy.
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^Good point, mchammer. We'll see more as new data arrives. But so far the indications are that the rate of inflation may be slowing a bit, but we're a long way off from "stable prices" of the preferred 2% inflation rate. And the Biden Administration doesn't seem to care.
When you have been in DC for 40 years and have been inundated with bureaucratic agency people claiming this exact phenomenon is a budget "cut", maybe you no longer understand what a true decrease is.
You yourself said Fed has to raise the interest rate about inflation. Now that they do so, you minimize it. Another bitter ender.
Zimbabwe at least has a method of gaining foreign currency. When you enter Zimbabwe you have to declare how much currency you are bringing in. On that form at the bottom after all of the bs, and signature line, and in very small letters, is the phrase that says traveler's checks are currency and if you don't declare them, the government will confiscate them upon departure (at least they don't throw you in jail).
Since you one is very stupid to go into Zimbabwe with any currency other than traveler's checks, the government makes quite a haul collecting up and leaving the country.
Since you one is very stupid to go into Zimbabwe with any currency other than traveler's checks, the government makes quite a haul collecting up and leaving the country.
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