With talk of hyperinflation coming...

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SandiSAHM
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Location: Oklahoma

Re: With talk of hyperinflation coming...

Post by SandiSAHM »

floridacatlover wrote: Thu May 06, 2021 8:12 pm I remember my old boss (favorite boss throughout my career) buying a home in 1980-81 in the Maryland suburbs and his mortgage interest rate was 18%. Yikes!
I cringe at it now, but my first mortgage was at 10%. This one is a little under 2%.

I remember when CDs were worth the effort.

The weirdest thing I've gotten lately is offers from... I think it's Chase, may be Citi (starts with a C, LOL), where they want me to open a checking acct with $10k and start direct deposits for a reward of $500. At first I thought "just $500? What kind of incentive is that?!?" then I realized... it's a 5% return on that $10k.

I actually gave it serious thought. It'd just be a little detour for part of the emergency fund.
clemencia2us
Posts: 11446
Joined: Fri Aug 28, 2015 9:21 am

Re: With talk of hyperinflation coming...

Post by clemencia2us »

SandiSAHM wrote: Thu May 06, 2021 9:41 pm When I was young (and dinosaurs roamed the earth...) we lived for a while at Nellis AFB in Nevada. From there we visited some of California. It's lovely.

That said, if you offer me triple what I paid for ANY house, it's sold. And if I lived in a part of CA where a "normal" house (by normal I mean like a 3-4bd contemporary on 1/3 of an acre) sells for the prices Ellen Marie talks about - SOLD! I'll take my profit and go somewhere quieter (even quieter than here) where 1/4 or less of what I made off the house would be spent to pay for another one around the same size, which leaves me with a paid off house and at least 3/4 of the $ yield to invest. I'd make sure to go somewhere property taxes are low (taxes in general being low would be nice). Not too far south, though, the heat is really starting to get to me. Somewhere with good soil, not clay.

I might spend some $ on road trips to go back to CA now and then, but no house that represents that kind of investment is going to be where I stay. Once I sell, the bubble bursting can be the next owner's problem.
I have an acquaintance that was living in Santa Monica. Rent controlled apartment. She said it was beautiful. Perfect weather. No need for AC in the summer. The hubby would walk down to the pier and fish. She would take a commuter train to work.

Why she left there and came here to Texas? Her hubby did not want to move.

And yea if someone gave me three times what I paid for this house -sold!
frugalmom
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Joined: Fri Aug 28, 2015 10:52 pm

Re: With talk of hyperinflation coming...

Post by frugalmom »

floridacatlover wrote: Thu May 06, 2021 8:12 pm As inflation takes hold, interest rates will rise and your money will be earning more. Sounds strange but my parents were very risk averse and mom always said they made the most money during the 1970s inflation. Cleaning out with her before she died we came across old CDs that paid 14%. I saw it with my own eyes. Of course they were lucky, like you and I are now, and did not have a mortgage.

During high inflation, the ones hurt are the borrowers, not savers. I remember my old boss (favorite boss throughout my career) buying a home in 1980-81 in the Maryland suburbs and his mortgage interest rate was 18%. Yikes!

Yes, food cost are of course negatively impacted by inflation. That is probably where we will first see inflation.

Janet Yellen was head of the Fed but she is now Sec. of the Treasury.

I do think that we are going to see inflation, just not hyperinflation. All the federal spending right now is going to create a hot economy right now, I believe. Because of that I moved some cash back into the market a few weeks ago. My thought is leave it there for the next year or so and then move back to cash. Big thing is that although I wouldn’t want to lose the money if the market crashed, I could afford it and life would go on.
YES! THAT is TRUE! I remember the days of higher interest rates! I particularly remember an elderly woman that had her hair slicked back into a tight bun and wore the same gray sweater and dress like a librarian or old school marm type and she had lots of money in her accounts! She was loaded BUT one day as I was on my way to work on the bus I saw her digging through the trash in front of a store, but I knew she was rich! I was a teller back then and no money at that point, but I was thinking hmmm,maybe that is why she has all this money lol! Being frugal!

You speak prudently and sounds like you made wise decisions and pretty well off! My goal is to be a millionaire (at the very least). It was touch and go for awhile there just wondering if we would even make it to have something incoming even. THAT made me even more conservative and save even more-I can save anywhere from 34-over 54%(based on the last few months from Jan records). There have been months last year I can save up to 75% even. However, it all looks good on paper my assets, but most of these things are all tied up and cannot touch unless I sell which like a house I need shelter so I won't. I just want to make sure I will be set up in the event he dies first(he is 10 years older than I am) and I can live off a smaller income and support the last two kids. Although my 16 yo son is doing well in his own business and said he could support me-lol! If he keeps it up, yes he could-he told me not to worry he will take care of me and kissed me! My other kids told me they would take care of me too if I ever needed them, but you know you never want to burden the kids or have to rely on them with their own lives going on.

So I am not poor, but again do live a poor lifestyle just bc I am frugal and there is nothing I need or want and I just spend a little. I just don't want to waste my money and like I said to my husband most people would spend what we got already and we can't even decide what to do with it except we want it to last as long as possible bc we know that is all we will be getting ever again. The lawyers even asked what we would do with our money, and all I could blurt out automatically was to "Save it!" I told him most would have spent it already(and so easily given the amount) and we are just holding onto it tightly and still frugal!!!

It really was not that much considering what we lost and what we went through(piddly really-it was sad) just bc we settled unfortunately, but my dh had it and just wanted to be left alone and not go to court to fight it out. WE waited that long so who knows how long going to court would have taken!? He just wants to go back home where he grew up to visit once. He hasn't been back in 50 years ever since he came here and wants to see it before he dies he says and visit a couple of family members still left (rest died before he could get there).

He had the other night an electric shock to his heart area that jolted him out of bed so he will have to do another stress test now. So I hope he will be able to go one day! And we have never traveled out of the US, so I would like one day to go on a trip to Italy and Greece (I don't know why but I have some morbid curiosity to want to visit Pompeii!? Also the Sistine Chapel and Colisseum and the Parthenon!). Then I am good-only thing on my bucket list-I can't think of anything else rn?! But my dh's knees are bad now too (can't operate til after a year of his stents due to blood thinners) so he thinks we may not be able to go anywhere bc he wouldn't be even able to walk, so who knows we may not even be able to go travel either-sigh!
Last edited by frugalmom on Fri May 07, 2021 1:13 am, edited 1 time in total.
frugalmom
Posts: 1710
Joined: Fri Aug 28, 2015 10:52 pm

Re: With talk of hyperinflation coming...

Post by frugalmom »

Quilter51 wrote: Thu May 06, 2021 6:08 pm I wish there was a like button on some of these posts.

If aittle bit of a younger person . I would be investing sensibly. If I were to go beyond that it would not be fold or bitcoin. It would be things and skills snd knowledge that can easily be traded among my neighbors and family in hard times. Some if which I have now.
YES, I was thinking the same thing as sometimes I go to find a like button and forget this doesn't have one! It would be so much easier! Yes skills and knowledge or something I could barter if need be. But at my age, is what I am thinking what can I do bc I am older but need for later in life and don't have that much time to wait for any rebounds if it falls!? So that is why I am stuck figuring it out!?
frugalmom
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Joined: Fri Aug 28, 2015 10:52 pm

Re: With talk of hyperinflation coming...

Post by frugalmom »

Beverley wrote: Thu May 06, 2021 6:15 pm Frugalmom; I do not live that far from you so I do get what you are talking about. While "hyperinflation" may be a little extreme I can also vouch for the fact we have been going into an inflationary period for quite a while and its getting worse. All you have to do is compare trips to the grocery store year by year (or even month by month) to see how crazy it's going. And the housing market is beyond ridiculous. Bay Area people have been selling out for the past few years and moving eastward, it has intensified since the pandemic. The selling price of my house has more than tripled since I bought it 22 years ago.

I don't remember a whole lot about the housing market in the early to mid 1970's but I do remember the double digit inflation. You could buy a widget and sell it a few months later and make a nice profit from it. Remember the "WIN" President Ford talked about? Whip Inflation Now. The thing that finally put the brakes on the inflation was escalating interest rates. We went to double digit interest rates in the 1980's (Remember when 10-12% mortgages were a good deal?). When that happened the economy tanked. Interest rates gradually dropped throughout the 90's and then reached the point where the lower rates started heating up the real estate market. That went on with people going on a borrowing frenzy either buying more house than they could afford or using their home equity as their personal bank account. And the crazy mortgages. This led to the 2008 real estate crash. Then homes were super cheap...lots of foreclosures. People who were priced out started to buy. Then the banks and investors came in and scooped up all the housing inventory and prices started rising again.

The only reason you don't see the double inflation figures now is because the feds tweaked that. Housing, food, gas, medical, education and other necessities are not taken into account when the inflation rate is figured. Only things like electronics and other toys. But don't be fooled. It is happening and the feds think we are dumb enough not to see it. Interest rates should be going up but the feds seem inclined to screw the savers. They want us to spend money.

So while it's best not to go into panic mode don't lose sight of what is happening beneath the surface.

Bev
Yes, you are always a voice of reason and common sense too. So what would you do with money that you have? At this age, invest it to grow (but I am old enough maybe it cannot rebound to make up for a crash),real estate but it is too much out here that even if I ever did have that,the payments would be outrageous and I am not willing to pay that much even if I have it or not! So gold and silver-I am noty sure! I told dh to invest in gold back when it was 200./ounce and he said can you eat gold!? So now it is like 1800./ounce or so and I told him SEE, you didn't listen to me back then, what happens if it does the same and goes way up again and we miss our chance again!? Gold is to preserve your wealth. So I don't know-given all the scenarios we are facing at the moment!
frugalmom
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Joined: Fri Aug 28, 2015 10:52 pm

Re: With talk of hyperinflation coming...

Post by frugalmom »

clemencia2us wrote: Thu May 06, 2021 7:28 pm You will be okay
Thanks Clemencia-it makes me feel better coming from you! :)
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