Alternative methods to fight inflation

[Snagglefoot]

Recently two Premiers in Canada ( like Governors in the USA) have officially requested the Governor of the Bank of Canada to stop raising interest rates. The Governor of the Bank of Canada is much like the Chairman of the Federal Reserve in the USA.

They feel that interest rate hikes are too damaging to ordinary mortgage holders. Instead they want to see increases in production capacity to help increase the sources of supply.

Although increases in interest rates are the traditional way to flight inflation it may be too punitive this time around. What say the experts at Bitog. ( without mention of political parties please.)

 

[GON]

Study the fall of the Roman Empire. Totally a result of "printing money".

Curbing inflation can happen by stopping the printing of currency, and removing government imposed barriers to entry for products and services.

Not rocket science ....Just that simple.

 

[Pew]

Recently two Premiers in Canada ( like Governors in the USA) have officially requested the Governor of the Bank of Canada to stop raising interest rates. The Governor of the Bank of Canada is much like the Head of the Fed in the USA.

They feel that interest rate hikes are too damaging to ordinary mortgage holders. Instead they want to see increases in production capacity to help increase the sources of supply.

Although increases in interest rates are the traditional way to flight inflation it may be too punitive this time around. What say the experts at Bitog. ( without mention of political parties please.)

Would be great, except production chains have been moved outside of the country and companies have now figured out they can make a lot more when there's less supply.

 

[John105]

Personally, not overall, my way of fighting inflation is to avoid things that have increased in price unreasonably, when possible.

Motor vehicles is one. My wife sees it differently but I buy food that's on sale.

What I do admit, is I know how to save money. I don't know how to make more, and I've never had passive income. Some major mistakes along the way!

 

[ripcord]

Economic silliness. Like a central bank can force producers to produce more. "Just pay for it with money out of your purse, Mommy."

 

[SC Maintenance]

Short term interest rates are designed to make borrowing more expensive which results in hardship for workers - fewer jobs, less credit expansion. Its by design, not a symptom. The premiers know this - there simply appealing to the masses - ie blame someone else.

Its a blunt tool at best, but its the tool they have. Central banks don't control supply.

@GON is correct. The government has spent too much money. Inflation in the USA remains high because even while the federal reserve is shrinking their balance sheet, the federal government is spending more. Yellen announced they will issue $1.9T more debt this year.

Inflation is just getting started.

 

[4WD]

AirCanada now charging by the mile to increase revenue

 

[ripcord]

The supply siders have been right all along. Everyone knows it, but the big government spenders don't want to admit it. Eventually, we will reap the whirlwind.

 

[ripcord]

Oops... double post.

 

[VTECOverRated]

Short term interest rates are designed to make borrowing more expensive which results in hardship for workers - fewer jobs, less credit expansion. Its by design, not a symptom. The premiers know this - there simply appealing to the masses - ie blame someone else.

Its a blunt tool at best, but its the tool they have. Central banks don't control supply.

@GON is correct. The government has spent too much money. Inflation in the USA remains high because even while the federal reserve is shrinking their balance sheet, the federal government is spending more. Yellen announced they will issue $1.9T more debt this year.

Inflation is just getting started.

Exactly. To think that politicians don't know what they have started is feigning ignorance. Most of them should be hung like in the old days for benefiting from this constant up down manipulation. If anyone thinks that democracy exists, it does not, the only thing that exists is central banking, and "fake money" manipulation (stock market).

The reason they called it the federal reserve, is to hide its true purpose. Its neither federal nor a reserve.

We are at a point where we either skyrocket into hyper inflation or plummet into deflation, which is worse? Deflation, duh. Hyperinflation will hurt, but deflation is not pain, its called a day light robbery.

Governments will keep spending until they reach a point that there is no point to print anymore. We are still a bit far off from that. We can easily hit 300-400% debt to GDP and people have a lot more to lose and become more poor.

 

[Hillbilly Deluxe]

We wanted burgers Sunday night after 6+ hours of painting and other work on our screened porch.

I ran to Publix to get some ground beef and buns, ice cream, milk, cream cheese and one other item, I believe. $49 with tax.


Today, to fight inflation, I brought two of the unused buns with me and the tuna I made last night and enjoyed a couple of tuna fish sammiches. Surprisingly, I wasn't "outta dat" on any items I wanted at the lunch counter, I didn't feel the need to tip myself and I didn't have to drive to an eatery that was going to let me down.

 

[dubber09]

Imho, when prices go way up average Joe cannot afford as much thus buying less and less. You most likely noticed how empty malls are and many closed all together. Increasing production of consumer goods does little as prices are still high, if they cannot sell product they produce what's gonna happen? Increased unemployment? Most people I see are just spending on food and postpone other stuff purchases.

 

[Vil_Riker]

[in the US] Deficits don't matter until they do. As Mr Musk said recently, the world is no longer willing to absorb our inflation.

The OP is in Canada, for a moment they might have thought they can behave like the US. Well, you can but it will much more painful.

 

[VTECOverRated]

We wanted burgers Sunday night after 6+ hours of painting and other work on our screened porch.

I ran to Publix to get some ground beef and buns, ice cream, milk, cream cheese and one other item, I believe. $49 with tax.


Today, to fight inflation, I brought two of the unused buns with me and the tuna I made last night and enjoyed a couple of tuna fish sammiches. Surprisingly, I wasn't "outta dat" on any items I wanted at the lunch counter, I didn't feel the need to tip myself and I didn't have to drive to an eatery that was going to let me down.

Today to fight inflation, I make my own buns, and grind my own beef (they charge like a 100% markup from a chuck to be ground), make my own ketchup, and grow as many of my own veggies as I can. In general, it doesn't cost me more than 2-3$ a burger to make. Time consuming? Maybe, but I don't there is anyone within 10 miles of me that can do this, so maybe when SHTF I will just open a burger joint. 100% organic and 100% hand made.

Prices are stupendously high, and when people say inflation isn't that bad, I tell them that it now costs me less to feed my chickens and get eggs, than it does to just buy eggs. Its never been profitable for someone to have a dozen chickens. Ever. It was 49c a dozen, then 69c, then 99c but still cheaper. 50lb of feed was 11-12$. Today its 22$ a bag and still cheaper for me to feed my chickens than it does to buy eggs at 3$ a dozen or more.

 

[Passport1]

'Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world'

This is why.

 

[gfh77665]

I work with some young 20 something, 30 something technical people. Brilliant minds, and I am not joking. They are way, way, smarter than me.

Its unbelievable how they spend money. One girl about 28 bought $4000 worth of fancy wheels and tires for her Jeep. She and the others "eat out" with Doordash everyday. Paying a nice delivery tip daily on top of the overpriced junk food they buy. Later in the afternoon, instead of walking into the next building to pay 75 cents for a can of Coke, you guessed it, she Doordashed a McDonalds coke. yes, a coke.

BTW most of them won't invest in the 401K. They leave the free company match on the table. Says "its too risky". It makes my head spin.

 

[Vil_Riker]

I work with some young 20 something, 30 something technical people. Brilliant minds, and I am not joking. They are way, way, smarter than me.

Its unbelievable how they spend money. One girl about 28 bought $4000 worth of fancy wheels and tires for her Jeep. She and the others "eat out" with Doordash everyday. Paying a nice delivery tip daily on top of the overpriced junk food they buy. Later in the afternoon, instead of walking into the next building to pay 75 cents for a can of Coke, you guessed it, she Doordashed a McDonalds coke. yes, a coke.

BTW most of them won't invest in the 401K. They leave the free company match on the table. Says "its too risky". It makes my head spin.

Inflation is systemic, has nothing to do with individual behavior.

YOLO is how your coworkers live. Just a different approach to life - why toil all your life and then die lonely? You are not gonna take a large 401k balance with you. And no, they don't think they will ever be able to retire just like a large chunk of people now work until their death.

 

[JavierH19]

Don't do what zimbabwe and the weimar republic did (we're doing it right now)

 

[gfh77665]

Inflation is systemic, has nothing to do with individual behavior.

YOLO is how your coworkers live. Just a different approach to life - why toil all your life and then die lonely? You are not gonna take a large 401k balance with you. And no, they don't think they will ever be able to retire just like a large chunk of people now work until their death.

I disagree. Inflation is systemic, but its driven by behavior. Market forces decide prices. If consumers starts to say "no" to something, prices will fall. If same consumers are willing to spend $70K on vehicles, and sales are healthy, look for $75K and $80K vehicles soon.

As far as the 401K, I have leveraged it to do quite well. I won't have to work 'til death by any means. Of course I can't take it with me, no one can, but I am proud to leave a legacy for my kids.

 

[JHZR2]

I work with some young 20 something, 30 something technical people. Brilliant minds, and I am not joking. They are way, way, smarter than me.

Its unbelievable how they spend money. One girl about 28 bought $4000 worth of fancy wheels and tires for her Jeep. She and the others "eat out" with Doordash everyday. Paying a nice delivery tip daily on top of the overpriced junk food they buy. Later in the afternoon, instead of walking into the next building to pay 75 cents for a can of Coke, you guessed it, she Doordashed a McDonalds coke. yes, a coke.

BTW most of them won't invest in the 401K. They leave the free company match on the table. Says "its too risky". It makes my head spin.

That’s been my suspicion too. These folks who live some lifestyle, even the high mortgage payment to income end, don’t have much long term savings as a result.

The million dollar house and other assets massively leveraged is the alternative to millions in the bank and equities for the long run. Unfortunately many of those assets are depreciating, others in overheated markets or pending massive tax changes that will bite them.

That said, certain assets during high inflationary times are better than others.