INFLATION--FED's cutting rates again...
- Thread starter Chop
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I've had that. Thought it was OK, certainly not spectacular.The inflation here is so bad that I have to drink Welsh whisky.
I'll put my beer credibility up against anybody's, but whisky is a completely different ballgame. I've only been a whisky drinker for about six months, so I claim absolutely no expertise at all. Nevertheless, it may not be spectacular, but my expectations were low. I didn't expect much from Welsh whisky, and it's not very expensive (about £32 for a 750 mL bottle). This is probably the best I have, and it's certainly better than the Penderyn. (It costs about twice as much.)
I am aware of the English, but I have never had the opportunity to try.
I went on a tour of the distillery, and English whisky is a relatively new product. I'm sure some export to the US, but it would be easy to overlook, because obviously when people think whisky, they usually think Irish or Scotch.
Seriously, I wish there were more beer drinkers here. This might be the best deal I've ever gotten on a beer. It is almost indistinguishable from Westvleren, which I've bought twice for €26 for one bottle. This cost me about £7. What an amazing deal.
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Wages have increased 5-10% annually for the bottom 80% for the last 2 years. The people most hurt are folks on fixed income.The inflationary damage has been done. The bottom 80% has been gut punched economically, and they’re not catching up anytime soon. It could be a mid or long term lowering of the standard of living for most in this country.
Perhaps most problematically (for The Fed), wages rose for 4th month in a row:
- June Private wages and salaries +5.9%, up from 5.8%, and the highest since Oct 2022
- June Govt worker wages and salaries +6.4%, up from 5.8% and the highest since Oct 21
Plot of the average American family.
1960s — only the Dads worked. 2 cars. Average house. A pretty decent regional driving vacation. Only the really smart kids went to college, and for next to nothing $. Eating out was rare and unusual other than drive in burgers, etc.
1970s — mostly only the Dads worked. 2 or 3 cars. Pretty good house. Good nationwide driving vacation to someplace pretty good. Smart kids to a state college for next to nothing $. Some eating out. Mostly economical places with the special occasion at a steakhouse. 2 spikes of inflation, but then back to normal.
1980s — Both Dads and Moms worked, but for a significantly higher standard of living. 3 or more cars. Good house. Driving or flying vacation to someplace good. National or international. Multiple good vacations each year for many. Eating out a lot and at decent restaurants. Most kids now go to college and it’s still cheap $.
1990s — Both Dads and Moms worked. Lots of divorce. Economic stratification between 2 parent and 1 parent homes. 3 or more cars. Good house. 2, 3, or more vacations to good places. National or international. Good $$ for most. Frequent raises. Most kids go to college, but college tuition now starts to cost a lot $$.
2000s — still pretty good, but getting tougher for most. Dads and Moms both working to make ends meet. Fewer vacations and to less glamorous destinations. Most still doing all right until 2008. Keeping cars longer than before. Still good houses, but housing inflation is getting a bit out of hand. Almost all kids go to college, but it now costs a lot of $$$.
2008 and decade of 2010 — both Dads and Moms working but not quite getting by. Debt racks up. Housing inflation is completely out of control. College tuition is completely out of control $$$. Keeping cars even longer. Cars are lasting longer but are $$$. Fewer vacations and to lesser locales. Eating out gets stratified with high end restaurants and fast food. The middle gets hit. Shopping is stratified. The middle market gets hit.
2020s — see 2010s but with big inflation added in, including food and energy. Average families are going into debt to try to scrape by. Standard of living is on the decline. Few or no vacations. People are now getting pissed at the situation. Eating out really declines and middle and upper end restaurants struggle. Housing inflation gets worse and worse, then it finally bursts.
1960s — only the Dads worked. 2 cars. Average house. A pretty decent regional driving vacation. Only the really smart kids went to college, and for next to nothing $. Eating out was rare and unusual other than drive in burgers, etc.
1970s — mostly only the Dads worked. 2 or 3 cars. Pretty good house. Good nationwide driving vacation to someplace pretty good. Smart kids to a state college for next to nothing $. Some eating out. Mostly economical places with the special occasion at a steakhouse. 2 spikes of inflation, but then back to normal.
1980s — Both Dads and Moms worked, but for a significantly higher standard of living. 3 or more cars. Good house. Driving or flying vacation to someplace good. National or international. Multiple good vacations each year for many. Eating out a lot and at decent restaurants. Most kids now go to college and it’s still cheap $.
1990s — Both Dads and Moms worked. Lots of divorce. Economic stratification between 2 parent and 1 parent homes. 3 or more cars. Good house. 2, 3, or more vacations to good places. National or international. Good $$ for most. Frequent raises. Most kids go to college, but college tuition now starts to cost a lot $$.
2000s — still pretty good, but getting tougher for most. Dads and Moms both working to make ends meet. Fewer vacations and to less glamorous destinations. Most still doing all right until 2008. Keeping cars longer than before. Still good houses, but housing inflation is getting a bit out of hand. Almost all kids go to college, but it now costs a lot of $$$.
2008 and decade of 2010 — both Dads and Moms working but not quite getting by. Debt racks up. Housing inflation is completely out of control. College tuition is completely out of control $$$. Keeping cars even longer. Cars are lasting longer but are $$$. Fewer vacations and to lesser locales. Eating out gets stratified with high end restaurants and fast food. The middle gets hit. Shopping is stratified. The middle market gets hit.
2020s — see 2010s but with big inflation added in, including food and energy. Average families are going into debt to try to scrape by. Standard of living is on the decline. Few or no vacations. People are now getting pissed at the situation. Eating out really declines and middle and upper end restaurants struggle. Housing inflation gets worse and worse, then it finally bursts.
For the bottom 80%, their rent, energy (gas and utilities), and food have gone up a lot more than 5-10%.
I doubt what you predict about the 2020’s will come true. We have a worker shortage, thus wages will be good. Housing cost is high mainly due to low supply. Historically, energy costs are not high. People refer to 50’s and 60’s as their reference point, but that was historically low, not the norm.
It’s already coming true.
Yes but food and energy only make up a small percentage of their salary whereas a salary increase applies to 100% of the salary. Housing is up due to low supply.
Like few or no vacations? It seems like 2023 is the biggest summer vacation season ever. Gas prices are high because so many people are traveling during summer vacation season (plus a large Exxon refinery is down for maintenance).
I think you are forgetting that a good portion of the populace relies on government subsidies like earned tax credit, rent assistance, and food stamps, etc. That gravy train ain’t ever ending.
If this were to happen, it would be due to the debt, not inflation.
ABSOLUTELY! Retirees are taking it on the chin. Our Social Security checks get COLA adjustments, as does my USAF retirement check. But the COLA (1) reflects last year, so it's a year behind, and (2) doesn't cover the full increase in goods and services due to inflation.
Prices have gone up more than 20% since January 2021. But the salary increases were 10% last year and 5% this year. Salary increases are now above future inflation. It will take 2 years but real wages (adjusted for inflation) will hit highs again. I think real wages have been positive now for the last 2 months (YoY), but they have a lot of ground to make up.
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Yes, but debt to GDP ratio is now lower than it would have been since debt is in past dollars and GDP is in current dollars. This is why debt (if not controlled) is the real culprit that ultimately makes you poorer, not inflation.
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My point went over your head. Money borrowed 20 years ago to buy your house doesn’t need adjusting. The value of your mortgage doesn’t inflate every year. Thus, debt to GDP ratio is calculated in nominal dollars, not real dollars (adjusted). And for this year’s GDP, nominal dollars = real dollars.
Sorry but nothing you say approaches any part of my body. After 40 years of working in the economic field I know what I am talking about.
To clarify, my comment was not intended to say my point is above your head (which would be condescending), but that you are not considering my point (“it went past your head” would have been more clear). Regardless, nothing I said was wrong.
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Fed of St Louis says debt is in nominal terms when discussing debt to GDP ratios: Inflation and the Real Value of Debt: A Double-edged Sword
A government’s nominal debt is the cumulated sum of past deficit spending. The real value of government debt is its value in terms of a basket of goods and services; it is calculated by dividing the nominal debt value by the price level. Because a government’s ability to service debt is closely related to its tax base, which depends on the size of the national economy, economists often consider the ratio of government debt to gross domestic product (GDP). This also allows us to compare debt levels over time and across countries.
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You won't go wrong with any of those.
https://www.usnews.com/news/best-co...-us-declines-in-annual-quality-of-life-report
The Decline of The American Standard of Living
Looking to the Future, Public Sees an America in Decline on Many Fronts
Black line = hourly earnings, flat $, not adjusted for inflation
Blue line = hourly earnings adjusted per CPI (which only captures about 1/2 of inflation)
Green line = hourly earnings adjusted per actual inflation
If you're old enough, remember when you could go get a part-time fast food job at 16 years old and pay for a car (a cheap car, probably used, but still a car), insurance, and have plenty of spending $ left over. That ain't happening these days. I paid for my entire first semester tuition at UT with leftover $ from a very lowly Summer job at a restaurant. That definitely ain't happening these days. Fast forward--you're newly married with an entry level corporate job, and you can easily buy a starter home and make the payments no problem. That ain't how it is for most young married couples these days.
Remember when the Astros played in the Dome, and you'd see all kinds of working class, and lower, looking families and individuals at the games, eating hot dogs, and drinking beer. The parking lot would be full of beater-cars, along with the nice cars. Back then, the only stratification was box seats vs cheap seats--and there were 20,000+ cheap seats available. Now go to an Astros game--the only place you'll find the working class and below is working the concession stand or cleaning the bathrooms.
The Decline of The American Standard of Living
Looking to the Future, Public Sees an America in Decline on Many Fronts
Black line = hourly earnings, flat $, not adjusted for inflation
Blue line = hourly earnings adjusted per CPI (which only captures about 1/2 of inflation)
Green line = hourly earnings adjusted per actual inflation
If you're old enough, remember when you could go get a part-time fast food job at 16 years old and pay for a car (a cheap car, probably used, but still a car), insurance, and have plenty of spending $ left over. That ain't happening these days. I paid for my entire first semester tuition at UT with leftover $ from a very lowly Summer job at a restaurant. That definitely ain't happening these days. Fast forward--you're newly married with an entry level corporate job, and you can easily buy a starter home and make the payments no problem. That ain't how it is for most young married couples these days.
Remember when the Astros played in the Dome, and you'd see all kinds of working class, and lower, looking families and individuals at the games, eating hot dogs, and drinking beer. The parking lot would be full of beater-cars, along with the nice cars. Back then, the only stratification was box seats vs cheap seats--and there were 20,000+ cheap seats available. Now go to an Astros game--the only place you'll find the working class and below is working the concession stand or cleaning the bathrooms.
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