We got a raise that is less than inflation. Not really helpful. It will crash and rebound like always.
Is Inflation Going To Cripple The Economy ?
- Thread starter Warstud
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The minimum wage earners think the raise they are getting is spectacular.
Inflation is usually triggered by a event or policy that precedes the inflationary period. In the 70’s and 80’s many believe that the ending of the Bretton Woods money system was that trigger. Vietnam certainly played a role as did World War Two.
Inflation became stagflation under Carter, the worst kind of inflation.
Study the debt clock. If this doesn't keep you up at night, nothing will.
Look at what YOU owe, your KIDS owe, unfunded liabilities... there has to be an end point and we are rapidly approaching a point of insolvency.
https://usdebtclock.org/
Look at what YOU owe, your KIDS owe, unfunded liabilities... there has to be an end point and we are rapidly approaching a point of insolvency.
https://usdebtclock.org/
Well one thing is for sure, wages are not keeping up with home prices, the higher the home prices get, the more people are just going to live with roommates...... NYC style, three guys sharing an apartment.....just to make rent.
If home prices rise 30% on a 100k home, that is 30k, an entire years worth of wages, so as home prices increase, you are getting further and further behind, thus a lot of people have left the workforce giving up on the "American dream".
and people like me that make 30k are getting screwed at purchasing power. I'm holding off buying a new vehicle for AT LEAST two years! Right now they are selling at or above MSRP, used car market is crazy, and with all the component/experienced employee shortages, I am assured these vehicles sitting in baseball fields waiting on chips will have quality control problems!!!
If home prices rise 30% on a 100k home, that is 30k, an entire years worth of wages, so as home prices increase, you are getting further and further behind, thus a lot of people have left the workforce giving up on the "American dream".
and people like me that make 30k are getting screwed at purchasing power. I'm holding off buying a new vehicle for AT LEAST two years! Right now they are selling at or above MSRP, used car market is crazy, and with all the component/experienced employee shortages, I am assured these vehicles sitting in baseball fields waiting on chips will have quality control problems!!!
We do have DJIA historical data that can help us understand to expect a downturn at some point after years of steady increases. Some believe there is a general 7-10 year cycle that may be as long as 18 years. But no matter, it's not really predictable. What it does do indicate that there are occasional significant downturns, most of which include significant losses that can easily wipe out a lifetime of growth. 2008 is a great recent example where the index was temporarily halved and rebounded to about the same 3-4 years later. For some like my father, it was too little, too late.
I consider that a downturn and not a crash. The 1929+ crash resulted in a 90% drop.
Looking at just one company, Ford has a backlog of F150's sitting in vacant lots, waiting on chips. That's not good, as it represents an aspect of overproduction. Consumers will see these 2021 trucks in 2022, many of which have been sitting outside for over a year. They will compete with 2022 model trucks. Despite possible good news that chips are coming, dealership lots remain empty and to some extent, the associated knowledge base has retired or been laid-off. The well oiled machine has rocks in it's gears.
Can we predict the future? Not a chance. Can we understand the scope of the issues, and the likely results, Absolutely.
The smart people buy low.
It certainly could eventually. The problem is going to self-regulate itself as we come out of COVID though and the supply chain gets moving again. The inflation is all due to the supply chain issues.
The problem isnt increased wages and benefits because its been long overdue. Wages have not kept up with inflation over the last 50 years. Thats why the boomers were able to afford the American dream back in the day but people nowdays need to have both parents work and sometimes work more than 1 job and are still just barely able to afford to scrape by.
Officially I think inflation is supposed to be about 5.4% and people making minimum are getting $2-$3 raises which is probably more like 20-30%. So even if the numbers are a little off, I think people are still doing better. At the other end, the S&P 500 is still doing well, up 24.03% year to date. So even with 5.4% inflation, still making more money than losing it. What's really bad is if you have anything saved in CDs offering just a few percent if that in interest.
https://fundresearch.fidelity.com/mutual-funds/performance-and-risk/315911750
Funny how perception doesn't always line up with the reality doesn't it?
People are doing better? That doesn’t seem to be the consensus. Min wage increases aren’t across the board increases. The people who were making $20/hr and doing OK are now making $21-$22 which is barely more than Mc D’s and everything costs more
The build quality of 21-22 cars and trucks is less than stellar. Speaking with dealership mechanic friends it’s a disaster out there. Not sure if it’s quality of parts, start up and shut downs causing oversights or disgruntled workers
Well $1 more at 20 per hour is 5% so you'd be losing vs inflation but $2 would be 10% so you'd need to be more precise.
The consensus is always doom and gloom. Business is down with me but investment portfolio is killing it this year and investment property is up so can't complain here.
JHZR2
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What, pull themselves up by their boot straps and become wealthy? Everywhere.
Become a millionaire? Everywhere.
Opportunity abounds. Maybe VC money moves more freely in the Bay Area, but that comes with strings. You still need to have a product that can be monetized and be sustainable. Fortunes can also be lost. Easily.
And lots of paths towards getting investment and developing something can go away when inflation erodes buying power, economies shrink, etc. Silicon Valley was a far different place in the early 70s.
A 20% raise at work does not pay for the 20% increase of average goods and 50% increase in housing costs, vehicles, appliances, etc.
Example: A bump from $15 to $20 per hour is 25% increase, representing an annual salary increase from $30,000 to $40,000. A typical American salary. So that American has $10,000 more, minus taxes, so really about $7k more.
New cars have jumped tens of thousands of dollars. Used cars have effectively doubled in prices. Groceries are up 5-50%. Most home goods up drastically. Fuel has nearly doubled since the election.
Rents and mortgages for houses have skyrocketed across the nation with housing prices in some markets doubling, representing tens or hundreds of thousands of dollars more in 1 year.
Anyone care to explain how the working class is somehow doing better making a few grand more per year when the price of nearly everything is drastically up?
The truth is that the inflation we are experiencing kills savings, kills the working lower and middle class, kills anyone not already in a owned home or with a fixed interest mortgage and able to pay for it. The rich will do fine. Everyone else gets steamrolled.
Example: A bump from $15 to $20 per hour is 25% increase, representing an annual salary increase from $30,000 to $40,000. A typical American salary. So that American has $10,000 more, minus taxes, so really about $7k more.
New cars have jumped tens of thousands of dollars. Used cars have effectively doubled in prices. Groceries are up 5-50%. Most home goods up drastically. Fuel has nearly doubled since the election.
Rents and mortgages for houses have skyrocketed across the nation with housing prices in some markets doubling, representing tens or hundreds of thousands of dollars more in 1 year.
Anyone care to explain how the working class is somehow doing better making a few grand more per year when the price of nearly everything is drastically up?
The truth is that the inflation we are experiencing kills savings, kills the working lower and middle class, kills anyone not already in a owned home or with a fixed interest mortgage and able to pay for it. The rich will do fine. Everyone else gets steamrolled.
It drives me nuts when people win the life lottery, such as stumbling on a very unique time or opportunity that is nearly impossible to replicate, and then boasting about how easy it was to get rich. It's only opportunity if you already own the high priced homes, FYI.
The truth is that your numbers are way off.
You forgot about taxes. Not 10% take home
What I am seeing here is very similar to the time prior to Y2K / dot com bubble crashing.
1) Due to a fear of risk (it was the Y2K bug back then, covid right now) that the central bank around the world is artificially keeping interest rate low, hoping to mitigate any potential collapse due to crisis.
2) Overpriced assets (back then it was dot com stock, right now it is crypto and tech stock) and everyone tries to get in before it is too late
3) Foreign market entering financial crisis (back then it was Japan entering a recession, right now it is Chinese entering recession and real estate bubble popping).
I think after the pandemic is over (financially speaking, whether you believe covid is real or not is irrelevant in the macroeconomics), the overall interest rate will increase and we will start seeing companies failing, and asset bubbles will start popping. Before that the insanity can sustain longer than you can stay solvent betting against it.
Cupertino, one of the "expensive" middle class area, is starting to have significant student enrollment decline and have to close schools, due to mainly being too expensive for young family to buy into the area and the people who bought decades ago becoming empty nesters. Our school outside of this area (slightly more affordable but still 1.5M) is also seeing this reduced enrollment, an indication that asset prices probably have peaked. I think the work from home revolution since the pandemic means the metropolitans across the world are getting bigger, the further away area are increasing in value whereas the overpriced central area near work hubs are reducing in value relatively speaking. I don't think the bubble is as big as 2008 for residential buyers, but I am worried for those companies who bought too much at a high price, like Zillow's residential holding, unless they are buying to hedge against inflation for big clients (those who used to buy Federal Debt / T Note but no longer trust it, yet still need to invest in the USD region). One thing I'd stay away from for sure is the SPAC and Blank Check companies who IPOed recently, and REIT.
I'm not too concerned about min wage or the supply chain issue in the long term. Karens gonna Karen but most of us know the real cost of living has increased and eventually will settle down to what market can bear. Our real min wage according to McD ads are way above the legal min wage anyways, and realistically the legal min wage can't even hire an undocumented worker these days.
The real poverty earner these days are the gig workers and self employed, they can work below min wage as they are "business owners".
1) Due to a fear of risk (it was the Y2K bug back then, covid right now) that the central bank around the world is artificially keeping interest rate low, hoping to mitigate any potential collapse due to crisis.
2) Overpriced assets (back then it was dot com stock, right now it is crypto and tech stock) and everyone tries to get in before it is too late
3) Foreign market entering financial crisis (back then it was Japan entering a recession, right now it is Chinese entering recession and real estate bubble popping).
I think after the pandemic is over (financially speaking, whether you believe covid is real or not is irrelevant in the macroeconomics), the overall interest rate will increase and we will start seeing companies failing, and asset bubbles will start popping. Before that the insanity can sustain longer than you can stay solvent betting against it.
Cupertino, one of the "expensive" middle class area, is starting to have significant student enrollment decline and have to close schools, due to mainly being too expensive for young family to buy into the area and the people who bought decades ago becoming empty nesters. Our school outside of this area (slightly more affordable but still 1.5M) is also seeing this reduced enrollment, an indication that asset prices probably have peaked. I think the work from home revolution since the pandemic means the metropolitans across the world are getting bigger, the further away area are increasing in value whereas the overpriced central area near work hubs are reducing in value relatively speaking. I don't think the bubble is as big as 2008 for residential buyers, but I am worried for those companies who bought too much at a high price, like Zillow's residential holding, unless they are buying to hedge against inflation for big clients (those who used to buy Federal Debt / T Note but no longer trust it, yet still need to invest in the USD region). One thing I'd stay away from for sure is the SPAC and Blank Check companies who IPOed recently, and REIT.
I'm not too concerned about min wage or the supply chain issue in the long term. Karens gonna Karen but most of us know the real cost of living has increased and eventually will settle down to what market can bear. Our real min wage according to McD ads are way above the legal min wage anyways, and realistically the legal min wage can't even hire an undocumented worker these days.
The real poverty earner these days are the gig workers and self employed, they can work below min wage as they are "business owners".
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