You know that most people already own houses? If my house doubles in price how does that impact my cost of living?
Energy prices are up well over 10%.
Yes. Now multiply that by the % of income people spend on energy and you get what?
The AIG commodity index is up 13%.
Yeah, I heard copper was up big. And how much copper does the average consumer use each year?
Now if you are correct, why are long term bonds yielding well under your 6% to 10% numbers? Real interest rates would be -1.5% to -6%. Not very likely over the long term.
If most people already own houses, then why are prices increasing so much? Since demand is ostensibly low (after all "most people already own houses"), and supply isn't decreasing, why are prices soaring? My contention is that it's due to the federal reserve printing dollars like there is no tomorrow.
Yes. Now multiply that by the % of income people spend on energy and you get what?
So if energy really isn't that big a deal, why is it usually excluded from the "offical" inflation numbers?
But I'll answer your question. Let's assume $150 a month for your typical household energy bill, and $150 a month for gasoline. That's $3600 a year, and that's not including higher prices on other goods as a result of the increased cost of energy. That's a lot of money.
Yeah, I heard copper was up big. And how much copper does the average consumer use each year?
The AIG commodity index is 6% copper. The other 94% of "stuff" is increasing in price also.
Now if you are correct, why are long term bonds yielding well under your 6% to 10% numbers? Real interest rates would be -1.5% to -6%. Not very likely over the long term.
I don't understand why the bottom hasn't fallen out of the bond market yet. Perhaps because millions of Americans keep blindly buying them via 401ks and other "investment" (LOL!) plans. Personally, I would not want to be holding any bonds right now.