Just out of curiosity, I look at Japan's M1 and M2. Holy money!
Between 1980 and now, its money supplies grew several fold. Add deflation on top of that, and that's a lot of cash sitting there. Cash that people hoard and not used for anything. Cash that is hoarded the same way that gold is hoarded by some people. You keep it just because it's good to have, and not because you want to exchange it for something else that is truly useful.
Hmmm... Why does that ring a bell? Is it because that's what we misers often talk about in this forum; hoarding money just for the pleasure of counting it?
From what I read it's better to wait until inflation raises it's head before buying TIPs. You don't get an advantage buying ahead of time.I've said this before, but will say it again, now is a good time to buy tips given the low inflation forecasts, just in case the forecasts are wrong sooner, rather than later.
From what I read it's better to wait until inflation raises it's head before buying TIPs. You don't get an advantage buying ahead of time.
Personally, I don't invest in TIPs. Or any long-term bonds.Possibly, but price can move up very quickly unless you are paying close attention or your clairvoyant. Probably not something that should be market timed, but if your port is devoid of tips, now is a good time to allocate as part of your bond mix.
Personally, I don't invest in TIPs. Or any long-term bonds.
TIPs are quite vulnerable to rising long-term interest rates.
Why TIPS Won't Protect Against Rising Rates
This thread made me look at my personal spending from an inflation spending POV.
Groceries - steady for 3-4 years. This despite the increasing appetite of 2 boys in middle school - one who seems to directly convert caloric consumption to growth in height and shoe size. (Kid's in size 14 shoes and already 6' at age 14 - but skiiiiiiinnny). I expected to see some increase since we're cooking from scratch more now that I'm retired, and we're buying more high end/organic ingredients. But... nope. Spent $200 less last year than the year before.
Autos - 2014 saw a big tick down - mainly in gas consumption. We also had fewer repairs to our older cars. Probably because I dropped my commute mid year. We still schlep our kids to school and/or the bus stop for their non-neighborhood magnet school.
Insurance - 1% uptick for homeowners/auto. Added umbrella last year so that's new. Had a HUGE increase in health insurance... Went from employee subsidized to cobra mid year. I am paying full freight for an exchange coverage this year (because covered CA would not let me have 2 plans - one for hubby, one for kids & me if we took subsidy). I'll get the subsidy back in the form of a tax refund in 2016. If I apply that tax refund to the 2015 year, it would show rates similar to my employer provided coverage.
Shelter. Maintenance is on budget. We had some big spikes (remodeled kitchen, new windows) but that's all paid for.
Utilities. Phone went down. Cable went down. (changed cell carriers, switched to VOIP, downgraded cable package.) Gas and lights - slightly up. New windows reduced consumption, increased rates took that savings. Expect increase this year since rate increases kicked in 1/1/2015.
Overall - our spending is where I expected, with no inflation adjustments. I accounted for increased healthcare, less driving, etc.
Groceries - steady for 3-4 years. This despite the increasing appetite of 2 boys in middle school - one who seems to directly convert caloric consumption to growth in height and shoe size. (Kid's in size 14 shoes and already 6' at age 14 - but skiiiiiiinnny). I expected to see some increase since we're cooking from scratch more now that I'm retired, and we're buying more high end/organic ingredients. But... nope. Spent $200 less last year than the year before.
Insurance - 1% uptick for homeowners/auto. Added umbrella last year so that's new. Had a HUGE increase in health insurance... Went from employee subsidized to cobra mid year. I am paying full freight for an exchange coverage this year (because covered CA would not let me have 2 plans - one for hubby, one for kids & me if we took subsidy). I'll get the subsidy back in the form of a tax refund in 2016. If I apply that tax refund to the 2015 year, it would show rates similar to my employer provided coverage.
Utilities. Phone went down. Cable went down. (changed cell carriers, switched to VOIP, downgraded cable package.) Gas and lights - slightly up. New windows reduced consumption, increased rates took that savings. Expect increase this year since rate increases kicked in 1/1/2015.
Overall - our spending is where I expected, with no inflation adjustments. I accounted for increased healthcare, less driving, etc.
Have tracked expenses carefully for 6 years. Groceries have gone up 50% in that time. Insurance has risen from 30% to 100% depending on type. Cost of having repair person come out has gone from $95 to $145. Lawn tractor service (pick up drop off) costs twice what it cost in 2009.
Amethyst
Stability in spending is not necessarily evidence of no/low inflation. Choosing to substitute lower priced products/services in one's life does not mean inflation went away. If I was eating salmon and T-bone steaks on my food budget last year but spent the same this year by buying canned tuna and ground beef that does not mean that food inflation was zero.
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I see your point MooreBonds - but I was looking at it from a personal POV - like Mulligan was with ACA changing his health insurance premium.
I tried to note what I considered factors in changes. (Changed providers, changed commute, changed energy rating of the house, etc.)
I am NOT saying current inflation is what many of us lived through in the 70's/80's, but I gotta throw the BS flag when I hear that inflation is under 1%.