Posted on 05/08/2022 5:13:19 AM PDT by EBH
With price levels continuing to spike, the Fed is no longer using the word ‘transitory’ to describe inflation.
U.S. consumer prices jumped 8.5% in March from a year ago, marking the fastest increase since December 1981. That could give the Fed more reason to continue raising interest rates — something that’s already casting a giant shadow over the stock market.
It’s a vicious cycle criticized by many investing veterans. And Rich Dad, Poor Dad author Robert Kiyosaki is one of the latest experts to sound the alarm.
“When inflation goes up, we’re going to wipe out 50% of the U.S. population,” he told Stansberry Research earlier this month.
Consumer crunched Kiyosaki isn’t exactly pleased with the current state of the U.S. economy.
“America has stopped producing products, we produce bubbles,” he says, adding that we now have bubbles in the real estate market, the stock market and the bond market.
The author also criticizes President Joe Biden’s decision to halt the Keystone XL oil pipeline, which he believes is a major reason energy prices are so high.
It also spells trouble for those who want to enjoy their golden years. When the bubbles burst, Kiyosaki says, the stock market will crash. So those relying on their 401(k) plans “are toast.”
“We don’t have a retirement, our pensions are bust.”
(Excerpt) Read more at finance.yahoo.com ...
Northern Maine? Most of Oklahoma or Nebraska.
The Federal Reserve is pretending to let the market function and doing its best to keep government borrowing costs far below actual inflation rates.
For some reason, the federal government always has money for welfare.
LBJ really screwed us over with his Great Society bill. At some point, the Welfare State is going to become unsustainable and then things are really going to get interesting.
Back in 1990, I thought it would have happened well before now. The abnormally lower interest rates we’ve had since the mid 1990s were specifically designed to keep the Welfare State afloat on the backs of savers. And he is spot on about the bubbles we have been blowing.
I absolutely hated Jimmy Carter (and still do), but one good thing I’ll say about the man is that he never resorted to bubbles to keep the US going. Sadly, every president since him has (including Reagan).
If you want pasta sauce, look into tomato paste. It’s very concentrated so it will save a LOT of storage space.
Don’t forget salt and medical supplies.
A well diversified mutual fund removes the need to be a good stock picker and allows reliance on those who in fact are.
The purchase of shares of such a mutual fund is infact not betting on stocks but betting on America.
Although the market is at present down, if you did not sell, you did not lose.
> Stocks will generally correct to realistic levels. <
Fear and greed will cause wild swings. But yes, I think your comment is the bottom line. Out of curiosity I just looked it up. By one measure the S&P 500’s current p/e is around 21. The historical average is around 15.
By those numbers we are far above realistic levels. On the other hand, bank CDs and bonds are paying very little. So perhaps many folks will stick with stocks simply because there’s no other place to go.
Northern Maine is very inhospitable from what I hear. Short summers loaded with biting insects from last frost to first frost.
It’s a very pretty state and very isolated and relatively inaccessible, but it has its downsides.
Paying 4% interest in a 10% inflation rate environment is like getting a 6% debt discount annually.
In many areas, houses are still selling fast as 5% mortgages are a great deal in a 10% inflation environment - a much better deal than a 3% mortgage in a 3% inflation environment for those that can afford to pay the 5%.
The bubbles want to pop on their own. The amount of unrest we will have if interest rates go to their natural level while 401Ks and RE crash is unimaginable. Think price inflation + asset depreciation + high interest rates and, maybe, a Government default. It will make all the classes protest simultaneously. Of course, nearly all classes won’t burn down their own communities — but the underclass will.
He’s a spokesperson for Stansbery Research a gold hawking firm.
I bought some silver in 1983 for $16/oz. It is still about the same price. Today it is $22.34. Gold has done better over the years. With Putin making the Rouble somewhat gold backed.... This helps put a floor under gold.
Paying 4% interest in a 10% inflation rate environment is like getting a 6% debt discount annually.
Walmart raised the price of 6oz. tomato paste to 62 cents, but I have a number of cans from Aldi at about 46 cents a can.
BOE is talking about a 10% Inflation rate already.
Here stateside, if inflation rate comes out anything over 9%, things will get very uneasy.
Bank of England hikes interest rates to 13-year high, sees inflation hitting 10%
https://www.cnbc.com/2022/05/05/bank-of-england-hikes-interest-rates-in-bid-to-fight-soaring-inflation.html
He’s a book salesman.
It’s still a great prepper item.
> Although the market is at present down, if you did not sell, you did not lose. <
Yep. That’s a key point. The only two prices of importance to an investor are the buying price and the selling price. What happens in between doesn’t matter much.
So if you weren’t planning to sell for 5+ years, no worries. Keep dollar-cost-averaging, and enjoy this spring day. But if you were planning to sell soon, perhaps you should rethink your portfolio diversification. Stocks are meant for long-term investing only.
Just my two cents. And thanks to Joe Biden, two cents ain’t worth much these days.
“Stocks are meant for long-term investing only.”
I agree.
The problem is that most “financial advisers” have their senior citizen clients with significant assets in the stock market since that has been the only way to get decent returns.
Those clients are gonna get boned—and quickly.
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