Numbers out this a.m. Inflation OFFICIAL numbers (they changed the way they calculated it) is over 9% yearly. If they went back and calculated it the way they did in Jimmy Carter's day, the rates would be over 15%. a couple of thoughts:
1 This has come on VERY rapidly. I remember people I trust saying (and I parrotted them, of course!) that the very act of delaying the correction would make it more rapid and intense, once it "got away from them" It looks like they were right
2 The last time inflation was this bad, we literally had to RUIN the economy to get it under control. Paul Volcker (chairman of the fed) raised rates to twenty per cent. and just left them there. You have no idea what kind of economic agony this created. You had to be there. I was in a relatively isolated part of the country (Boca Raton FL was very wealthy and was prosperous enough that lots of the populace were "above" this), but EVERY day it seemed I met plumbers, electrician, painters, carpenters, accountants, engineers, etc etc etc who just closed up shop in NY, MD, NJ and all of New England and just moved to Boca to try and find work. One guy who had been a plumber and running 8 trucks with a LARGE payroll just walked away, gave his equipment, home, trucks, buildings... everything, to the bank and came down; He was roughing in residential plumbing in an entry level job. When asked "why?" he siply said "there was no work. simple as that."
3 I hear talk in here and around the internet, largely repeating the talking heads on CNBC, that the initial downturn will "stop" inflation leading to a turnaround. Let me be clear. THE STRENGTH OF THE JOB MARKET DID NOT CAUSE INFLATION. This myth about money velocity being the root cause (rather than a result) of inflation is a horrible lie. Inflation will continue if we see a plunging job market.
How do I know that? BECAUSE I AM OLDER THAN YOU AND HAVE SEEN THIS BEFORE (if you are the one asking that question). It was worse than an attached tick (inflation) and is going to take drastic measures to get rid of it.
The reason why I believe we will, instead get hyperinflation (almost definitely) and war (probably/maybe) is based on one thing only. It takes moral fortitude to say "this may destroy my career but it is the right and needful thing to do." We had SOME of that in leaders in the 70s. It is all but evaporated. When the howls and predictions of doom and squealing that "YOU ARE KILLLING THE COUNTRY WITH THESE ***** INTEREST RATES!" come (and they did, and they will), this crowd will fold like wet tissue paper and go back to the feel good fix of printing money. My prediction is that the consequent insane rise in prices will cause them to go lurching about for a nice tidy little war to focus the attention of what Doug Casey calls "boobus americanus," who never met a flag he could not wave, nor a war he could not lustily send poor people's kids off to fight.
Me? I am still buying silver and gold, and am in more of a rush to become as independent as possible. There are a million things to do here, but I am trying to remember that God watches over His people. No need to panic. At a minimum I would counsel to 1) get out of debt 2) get out of the city 3) have 5-6 months of food/water 4) learn to grow your own 5) become less dependent on society for energy (lots of ways... I am VERY VERY weak here) 6) have some gold and silver (more is better) 7) have some ammo (again, more is better).
How about our spouses? THEY HAVE TO BE ON BOARD WITH THIS IN SOME MEASURE. When I broached this subject with my wife back in 2007, she got mad at me. It scared her, and she also thought I was bit unhinged. She was just pissed though at the idea that something was coming to upset her world, and our world was already upended by a number of things. I remember her saying "I don't know ANY Christian men who talk like you do about this" She was a National Review quoting, McCain supporting, Free Republic groupie who truly believed the Rs were he good guys and D stood for demonic.
Then came the Free Republic purges, and then Trump, and Q, and a general sense of unease about those Republicans, but when I would say "Trump is right, honey, there is not any real difference in the parties" she would segue into a vision of Trump being the leader of a bunch of "white hats" and were going to use various tactics (including a military coup) to overthrow this mess. When I sneered (never a good tactic) and mocked this, it just caused hostillity --gee, I wonder why!?!?!?!?-- I slowly learned to let her go her own path.
She is now a "we have to become more self reliant with food...., lets investigate this or that about the garden" don't want to spend any money on things other than necessary for survival, think about moving more rural than we are (!!!), we need to get all our money out of the bank... kind of woman. She is very fold of quoting this internet youtube chick PATERA in stating "no one is coming to save you."
All that is to encourage you to 1) be gentle and expect her to react emotionally, maybe with anger, at this "upending" stuff. 2) be patient and realize she MAY wind up where you are (in general) from a totally different path than you took (that part was delightful) 3) this MIGHT be an opportunity for stress to make your marriage stronger (not the normal result) 4) pray with her -not "for" her and definitely not "at" her.. lol... if you don't do that now, it might be a good time to start
Long rant from the CPI numbers this a.m. and consequent market swoon. I think we are headed for very difficult times. I wish the best for each of you.
Dow down 400 and heading south.
I bet 10% is on the horizon. Even with the historically unusual drop in gas prices over the 4th of July weekend, I think prices are going up. I don’t see anywhere that the Biden and Harris administration recognize the problems and are doing anything constructive to solve it.
I assume these are your thoughts?????
Nothing to worry about, we won’t run out of money, they can and will print more.
What comes next? The liberal media working overtime to either ignore the issue, claim it isn’t as bad as people think it is, or blame it on Republicans, Putin or someone other than the Democrats.
12-20% interest rates coming. I’ve been down this road before and it’s like a Jimmy Carter flashback but worse.
What comes next?
More inflation.
Dims ALWAYS find ways to pocket..I mean spend OPM.
I’ve been lurking on FR for about 20 years, seldom post or engage though. What were the “FreeRepublic purges” you mention in your paragraph 9?
By the way, I’m an optimist.
Excellent post. The huge ocean tanker of inflation is in motion at high speed. It is going to take a LONG time to turn it or turn it around...a VERY long time. This time, they are actually going to ruin this country morally and economically.
Was talking to a well-educated man who made his money from oil & gas this morning a few minutes ago with a Biden-Harris sticker on his truck. I asked him why he was supporting this administration, honestly. He talked to me without rancor and said he voted against Trump because he was immoral - has had three wives. I said that I didn’t like that either and mentioned Hunter’s immorality and that of Kamala Harris. He brushed that aside and indicated he didn’t believe she slept her way to the top (that needs to be better documented for folks that can’t see what she did). It finally came down to he REALLY believes in Climate Change.
His point was we have to do something about fossil fuels (he already made his money) because they will destroy the climate. A LOT of people believe this. Don’t see much hope.
Wow. Thank you. Had this very thing come up with my old lady yesterday. I said that I wanted to get chickens to help with our food situation and she got angry and couldn’t understand why. Glad to hear they come around eventually.
What’s your thoughts on buying property? I live in Eastern,PA and we have been wanting to move and could easily but my parents and family are all here. My sister just passed away and my parents are 80 years old and need us nearby.
We thought of moving and having them come with us but they refuse because all their doctors are here along with family. That’s when we thought to buy property in WV or KY as it’s less expensive but is at a historical high right now. Thoughts?
Human sacrifice, dogs and cats living together, mass hysteria!
Having lived through the inflation of the late 1970s early 1980s, look for interest rates to hit double digits. We bought our first home in 1979 with a 11.25% 30 year fixed rate mortgage and considered ourselves lucky…within 6 months 30 year fixed rate mortgages were at 15-16%. Some home buyers took the risk with adjustable rate mortgages and got burned when interest rates continued to climb and they soon could not afford the payments. Auto loans were as I recall 9%.. I also remember gasoline well over $2 per gallon…adjusted to today’s dollars about what were are currently paying.
Ronald Reagan and Paul Volker made the right choice to get the economy going and stopped the economic stimulus money that had fueled the stagflation. It was rough going, but the economy roared back fueled by Reagan’s tax cuts
If that's the case, then buying gold and silver isn't going to do much good. The prices for those commodities are going to decline (at worst) or stay flat (at best) over the long term, anyway.
The only major financial move I made recently was to draw on a major line of credit from my personal bank that I use for my business. I don't need the money, but they're offering a ridiculously low promotional interest rate for the next 18 months. I'll just put the money in the bank for 18 months and earn 1.2% interest while paying 0.5% on the loan.
“And what comes next”
C O L Buying power drop
Unemployment
Deflation
Patera is a good Christian woman.
Inflation, and what comes next?
Depression if things don’t pick by next year nothing is looking like a up tick gas will be the main season for the slide.
Go green go bust
Welcome to FR.
MJP and the Biden administration say things are going great. Don’t believe your lying eyes.
The administration is a clown circus with clown cars for the cabinet and their minions in the media.
5.56mm