patrick.net

For asset holders, inflation is a gift.....

House prices up
Stocks up (especially my tech stocks)
And CRYPTO! Bitcoin at 68k!

Do I really care about $5 per gallon if I make a million in profit on the other side (investments)?

The crypto market has grown to a 3 Trillion dollar market cap......and retail investors are not even flooding in yet.....

True, my stocks seem to have nicely compensated for inflation, while my cash lost.

Patrick says

True, my stocks seem to have nicely compensated for inflation, while my cash lost.

Paper stock gains verses real cash purchase power losses?

Bitcoin says

House prices up

Yep, so now you get higher property taxes (except those under Prop 13) and higher insurance cost for the same house. Also, if you "cash out" in a sale, you will pay higher real estate fees on the sold house and your next house, in addition to the higher cost of the next house.

Bitcoin says

For asset holders, inflation is a gift.....

House prices up
Stocks up (especially my tech stocks)
And CRYPTO! Bitcoin at 68k!

not if it leads to widespread poverty and revolution...

FortWayneAsNancyPelosiHaircut says

Bitcoin says

For asset holders, inflation is a gift.....

House prices up
Stocks up (especially my tech stocks)
And CRYPTO! Bitcoin at 68k!

not if it leads to widespread poverty and revolution...

you can say that about everything. What you would need to explain is HOW mild inflation is supposed to lead to widespread poverty.

Otherwise, it doesnt mean much. If I say, its a good thing that we are getting some rain in sunny California.
You can reply and say, Not if it leads to widespread poverty and revolution.

Bitcoin says

FortWayneAsNancyPelosiHaircut says

Bitcoin says

For asset holders, inflation is a gift.....

House prices up
Stocks up (especially my tech stocks)
And CRYPTO! Bitcoin at 68k!

not if it leads to widespread poverty and revolution...

you can say that about everything. What you would need to explain is HOW mild inflation is supposed to lead to widespread poverty.

Otherwise, it doesnt mean much. If I say, its a good thing that we are getting some rain in sunny California.
You can reply and say, Not if it leads to widespread poverty and revolution.

The majority of people don't have the zero fucks given cash they can invest into a house or crypto or stocks, they mostly depend on paycheck increases. A sizable portion of lower and lower middle class becomes impoverished from inflation. And those in the upper middle and upper class who bet on the wrong horses. If you can't safely save money at a good enough rate to outpace inflation you're at the whim of speculation/investing or of your employer and savings account

HeadSet says

Bitcoin says

House prices up

Yep, so now you get higher property taxes (except those under Prop 13) and higher insurance cost for the same house. Also, if you "cash out" in a sale, you will pay higher real estate fees on the sold house and your next house, in addition to the higher cost of the next house.

yes, i am in CA and under prop13. so property taxes are capped.
I also have no interest in selling RE. Only holding and renting out.

Inflation is good for me as a homeowner. I dont like to pay off the house because a lender is lending me money at 2.75% for 30y. Instead of paying back the loan at once, i invest my cash at much higher returns. In the meantime, inflation is eating away the value of my debt. My debt is fixed and becomes less "valuable" while income rises.

We are in a prime situation......terrible for poor people. But best conditions for people with assets and cash to invest. This is the time to make a killing and set yourself up for early retirement and generational wealth.

He brought, doempit.

https://www.youtube.com/watch?v=TRXdxiot5JM&t=30s

mell says

If you can't safely save money at a good enough rate to outpace inflation you're at the whim of speculation/investing or of your employer and savings account

Totally, the poor are fucked. Middle class has to invest in stocks, crypto and RE. no other way to stay ahead.

HeadSet says

Patrick says

True, my stocks seem to have nicely compensated for inflation, while my cash lost.

Paper stock gains verses real cash purchase power losses?

Yes.

https://notthebee.com/article/get-ready-us-electricity-costs-have-spiked-the-most-in-over-a-decade-and-its-not-even-winter-yet

https://notthebee.com/article/inflation-in-america-just-reached-its-highest-level-in-30-years

https://notthebee.com/article/president-biden-did-you-ever-think-youd-be-paying-this-much-for-a-gallon-of-gas

I didn't make it up. He really said that. And he said it on the day U.S. inflation came in at a 31-year-high.

Now THERE is a sound byte for the ages.

Food prices going up...just increase the amount of food stamps some more.

Bitcoin says

mell says

If you can't safely save money at a good enough rate to outpace inflation you're at the whim of speculation/investing or of your employer and savings account

Totally, the poor are fucked. Middle class has to invest in stocks, crypto and RE. no other way to stay ahead.

You must live in some sort of bizarro alternate world.

It’s the average Joe that would be fucked. And your premise earlier that everyone’s underwater is not correct either. 2018 and 2019 financially were some of the best years in a couple decades for the average dude. It’s why wages were record setting. Of course Covid and a likely rigged election messed that up.

But anyway, yeah inflation now. Air flight are still underpopulated so not a good measure. Otoh US measured inflation is, as is noticeable price increases at the grocery store including with entirely domestic items like dairy and fresh meat. You’d be blind not to notice.

Good luck getting the unwashed masses to invest like you state. Better would be a federal government t hat raised interest rates substantially and quit printing money left and right.

Inflation is not a “gift” for investors, but investing provides some protection against it, unlike cash in the bank.

clambo says

Inflation is not a “gift” for investors

Correct. Inflation is a gift for irresponsible debtors.

HeadSet says

Correct. Inflation is a gift for irresponsible debtors.

Debtors, irresponsible or not.

Banks had over a decade of ZIRP. It's time to give to the debtors now.

6% inflation + 3.5% fixed rate = awesome for homebuyers (assuming they get some COLA)

Savers can finally get a decent CD or be in the stock market.

CaptainHorsePaste says

Savers can finally get a decent CD or be in the stock market.

I see the inflation everywhere, but I have not see decent CD rates.

CaptainHorsePaste says

Debtors, irresponsible or not.

More the irresponsible debtors. People who borrowed to invest in business see their daily costs for that business increase. People who overextended to buy consumer goods just see their folly rewarded a bit.

HeadSet says

I see the inflation everywhere, but I have not see decent CD rates.

ZIRP will end and the CDs will have to offer above inflation to be worth a damn.

When the free bankster money stops.

HeadSet says

clambo says

Inflation is not a “gift” for investors

Correct. Inflation is a gift for irresponsible debtors.

Wage inflation is a gift for irresponsible debtors.

But do we have as much wage inflation as cost of living inflation?

Patrick says

Wage inflation is a gift for irresponsible debtors.

True economic inflation includes both wages and prices. And yes, I would say the wage part is inflating. Around here, Job that were minimum wage are going begging at $15-$20 an hour. Government checks like Social Security will get a 5% increase this January.

Added comic to original post.

good one.

They seem to be taking this stance that the bill will help fight inflation. I think it will make it worse, at least in the short term, due to more spending. Infrastructure like new ports and roads will take years to build, and thus so will their contributions to supply chain efficiency that could give some inflation relief.

Either:
- They expect inflation to be short lived, which would allow them to falsely take credit for "fixing it" with their bill.
- They expect inflation to be long lived, and are positioning their rhetoric and actions accordingly, easing us into the new era of high inflation, making the poor more dependant on them, while enriching their rich asset-flush donors masters.

So far I've been more in the camp that the inflation will be short lived, but my left eyebrow is starting to rise. Our national debt is high, and I've heard many say that inflating the debt away is our only realistic option given that americans have zero appetite for austerity. I wouldn't be too surprised if we enter a period of engineered high inflation. Seeing our gas prices surge, while also seeing Xoe approve russian pipelines while stopping our pipeline projects and halting drilling smells bad.

Also, I was just at the grocery store. Beef and Bacon prices seemed about 30-40% higher than 2-3 weeks ago, although many other prices were about the same or less dramatic increases. Might be targeted supply restrictions on farting cows, so bill gates can sell us eco-safe boca burgers grown on his farmland holdings (staffed with all his newly hired illegals, supplied to him by the dems)? lol

https://babylonbee.com/news/biden-vows-to-keep-firing-his-giant-money-hose-at-everything-until-inflation-is-fixed

That means he is throwing gas on fire to control fire. There’s no credible reason to believe inflation will be controlled by firing people and intensify production and supply problems for his dangerous injections as a big pharma representative. All responsible savers get f* both by irresponsible spenders and gov.

"experts" are always wrong.

I read this book back in college, and it was great:

https://www.goodreads.com/book/show/836773.The_Experts_Speak




It's just a book of quotes by "experts" being very wrong.

FuckTheMainstreamMedia says
You must live in some sort of bizarro alternate world.


>>>>>nope, its not bizarre at all. money printing + long interest rates = asset inflation, add covid supply shortages and people who dont want to work to the equation and you have inflation across the board.

FuckTheMainstreamMedia says

It’s the average Joe that would be fucked.

>>>>>maybe we have a diff. definition of avg joe. I simplify: people who have' houses and stocks/crypto and have good paying jobs are just fine. The poor are fucked. poor means no stocks and no house. And people who wait for a crash and sit on cash are losing big time.


FuckTheMainstreamMedia says
And your premise earlier that everyone’s underwater is not correct either. 2018 and 2019 financially were some of the best years in a couple decades for the average dude. It’s why wages were record setting. Of course Covid and a likely rigged election messed that up.


>>>>>>when did i say everyone's under water? BTW 2020 was better than 2019.....i bought stocks left and right during the covid crash - a buying opportunity of a lifetime if you bought the lows.

FuckTheMainstreamMedia says
But anyway, yeah inflation now. Air flight are still underpopulated so not a good measure. Otoh US measured inflation is, as is noticeable price i...

>>>>>I flew twice to the east cost in the past few months. Airports are packed and flights are full. You can fly for 300 bucks with Alaska air to Newark and back to San Diego. Not that I care (the company pays for it) but its dirt cheap. Sure other items are up (groceries, gas) but my house, stocks and crypto also massively increased in value.

You just got to learn how to play the game in any market.

I am not so sure we will see inflation. Some comments from a spat between Dorsey and Cathie Wood (where Dorsey said hyperinflation was coming)...
==============================
Wood said the three roots of deflation will be:

Technologically enabled innovation, which will be the "most potent source." This includes artificial intelligence, an industry whose training costs have been dropping 40%-70% at an annual rate, in what she called a record-breaking deflationary force. "AI is likely to transform every sector, industry, and company" over the next 5-10 years, she said.

Creative destruction due to disruptive innovation. Many companies, she said, have catered to short-term-oriented shareholders who mainly seek profit, instead of investing in innovation. These companies "will be forced to service their debts by selling increasingly obsolete goods at discounts: deflation," she added.

Cyclical factors. After shutting down, many business are still catching up to consumer demand that surged during the pandemic and are likely ordering double or triple what they typically need. But she predicted that wave will pass. "Once the holiday season passes and companies face excess supplies, prices should unwind," she said, adding that some commodity prices such as lumber and iron ore have dropped 50%.

She also said oil demand is below 2019 levels, and rising prices should weaken it. Meanwhile, the ESG trend is forcing energy companies to shift investments toward renewables, and banks are lending less to the sector. Plus, electric vehicles are taking off, "sowing the seeds of a serious oil price decline longer term."

Bitcoin says

Sure other items are up (groceries, gas) but my house, stocks and crypto also massively increased in value.

You just got to learn how to play the game in any market.

So to stay ahead of the game, all you need to do is gamble and win!

After watching long enough, I am very convinced that deflation will never happen. Corrupt gov thinks it’s a gift to print even more money in additon to the regular printing. Imagine now with new “social spending” crap, it will bump up more inflammation. Every nation is devaluing their currency. Only difference is that it’s happening at faster rate now using “pandemic” tool.

Blue says

After watching long enough, I am very convinced that deflation will never happen. Corrupt gov thinks it’s a gift to print even more money in additon to the regular printing. Imagine now with new “social spending” crap, it will bump up more inflammation. Every nation is devaluing their currency. Only difference is that it’s happening at faster rate now using “pandemic” tool.

Agreed

For average Americans with debt, inflation is a gift. Sure it’s going to suck for a few years while wages adjust to the new fiscal reality, but everything you owe money on is going to become worth more while your debt depreciates.
Example: you owe $500,000 on your home valued at $600,000. You make $100,000 a year. After five years of this sort of inflation, the home is now worth $900,000 and the debt is the same. Thanks to market forces and employment being tight, you have managed to swing a commensurate 50% raise and now make $150,000 annually. Your income and house are now 50% greater, but your debt hasn’t changed much at all. In fact, it’s decreased slightly, meaning that the $3000 mortgage payment that used to tax you severely is now quite affordable and as a percentage of your salary has dropped from (100,000/$36,000=36% - 150,000/36,000= 24% = 36-24= 12%) 36% of your income to a mere 24%, a 12% drop, or 1/3 drop from where it used to be. You owe $465,000 now, about half what your house is worth, compared to the 83% that used to belong to the bank.
Yes, everything else is now more expensive as well, but none of your expenses are as much as your housing expense, and you have more of your income available to pay for them.
And your subjective wealth has grown by $400,000. You are now almost a half millionaire!