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How worried are you about inflation?
05-06-2021, 08:41 AM
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#1
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Moderator
Join Date: Nov 2014
Posts: 9,070
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How worried are you about inflation?
Thankfully, I already own my house and cars but some of the items on this list are definitely concerning with regards to inflation that impacts my budget. Gas, certain meats, truck driving (shipping in general). I find it hard to believe that inflation is going to remain low, at least in the near term.
https://www.businessinsider.com/why-...t-paper-2021-5
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05-06-2021, 08:54 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Feb 2021
Location: Puget Sound
Posts: 3,191
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Not worried about something I cannot change. Not concerned, not bothered, not staying up at night.
There are other things to worry about, namely how soon we can go if DW's job evaporates. Losing her salary right now would change the dynamics.
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Class of 2023
OMY to 2024
Operating Engineer for a commercial plumbing contractor
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05-06-2021, 08:55 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: Reading, MA
Posts: 1,672
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Try buying plywood or a new car right now if you enjoy sticker shock...
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05-06-2021, 08:58 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 5,991
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Quote:
Originally Posted by TheWizard
Try buying plywood or a new car right now if you enjoy sticker shock...
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Yeah, unfortunately we had to bite the bullet and buy 11 sheets a few days ago at $66 (for low grade CDX sheathing!). On the plus side, it is something like $70 a sheet now.
New way to make money....long plywood!
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05-06-2021, 08:58 AM
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#5
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,518
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Consumer price inflation is not on my list of the top 10 things to worry about or even the top 10 financial indicators to worry about. Prices will probably rise this year, but as long as there is a global shortage of demand I’m doubtful chronic inflation is a risk.
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05-06-2021, 08:59 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
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Quote:
Originally Posted by Jerry1
... Gas, certain meats, truck driving (shipping in general). I ...
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Assuming the international value of the dollar drops due to inflation (or vice versa) the list is much longer than that. Basically everything that is traded internationally: metals and other industrial inputs, virtually all food, etc. Then consequently, personal services like barbers, health care, etc. as they struggle to keep heads above water.
Worried? Yes. Our entire fixed income tranche is in TIPS, but if we get serious inflation, no one is going to be having any fun -- including us. We will be better off than many.
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Ignoramus et ignorabimus
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05-06-2021, 09:01 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 37,931
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Quote:
Originally Posted by skyking1
Not worried about something I cannot change. Not concerned, not bothered, not staying up at night.
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+1
I have a large enough equity allocation that it should eventually catch up with inflation.
For now our investments have grown well ahead of inflation. I won’t be surprised if I end up giving some back.
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Retired since summer 1999.
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05-06-2021, 09:01 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Feb 2021
Posts: 2,324
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Quote:
Originally Posted by skyking1
Not worried about something I cannot change. Not concerned, not bothered, not staying up at night.
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This.
It is what it is. Inflation goes up and down. We've been enjoying very low inflation for quite a while but we've lived through periods of high inflation too. The sky didn't fall. We all just went about our business - and bought 13% CDs.
Inflation is a much bigger issue for lower income folks who don't have a lot of discretionary income. For us, we save over 40% of income. If inflation really kicks up, maybe we'll have to trim that back to 38% or 35%. I think we'll survive.
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05-06-2021, 09:05 AM
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#9
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Moderator
Join Date: Nov 2015
Posts: 13,846
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Not worried. We've had slightly under-plan inflation for several years now, and with interest rates so low the fed can has some levers if needed.
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05-06-2021, 09:10 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 1,155
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I'm extremely worried about inflation.
Pumping trillions of dollars into the economy while doing other things that reduce supply (eg: eliminating oil pipelines) is "Econ 101" in terms of predictability that prices are going to up - WAY up. (Just increasing the cost of oil is going to affect..just about everything, as commodities need to move point A to point B somehow)..
In the meantime, cash and bonds are returning net negative and equities are at least 2X over-valued by most measures.
I fear we may see a return to the 70s. Just as wife and I are starting our 3rd year of retirement.
Adam Taggart of Peak Prosperity (who has some really great guests on his YouTube channel show) called this "the most challenging investment climate of our generation", and I agree. The old rules no longer apply and I see nothing but extreme risk ahead, culminating in potentially a 50+% drop in equities, cash and bonds returning negative real and just about everything going into the shredder. All that quite possible yet in 2021 given economic, tax policy and related factors..
I'm only at <25% equities and even that makes me very nervous in today's market. But cash and bonds are getting creamed and high inflation is going to hit both classes even harder. So there's no port in the storm aside from potentially Gold..and I don't plan to touch crypto with a ten foot pole.
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05-06-2021, 09:13 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Oct 2017
Location: Tellico Village
Posts: 2,596
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Not worried!! It won't help to worry. I have positioned my portfolio to handle whatever comes my way. If it fails, that won't be my biggest concern.
VW
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Retired May 13th(Friday) 2016 at age 61.
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05-06-2021, 09:28 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 4,344
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I would not say worried, but concerned about it yes. I can do fine, it will just take more moeny to buy things or travel. With the great returns over past 12 years, my savings has grown way over the rate of low inflation for the same period. So may end up giving up some of the increases going forward due to higher withdrawals. But I have the resources to handle it.
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The problem isn't artificial intelligence, it's natural stupidity.
You can't spend yourself to prosperity.
Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
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05-06-2021, 09:44 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,515
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It is a concern. Having said that, with low population growth, it seems difficult to get much inflation other than a rise driven by once in a lifetime events (such as now).
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05-06-2021, 09:47 AM
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#14
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Recycles dryer sheets
Join Date: Jan 2020
Posts: 246
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Not surprised many poster here commenting "I'm not worried". But inflation is what keeps most working class Americans in poverty generation after generation.
McD Hashbrown that used to cost $0.50 last year is now $1.99
McD Apple Pie that was $0.69 last year is now $1.29
Organic milk that was $5.99/g is now $7.99/g
A house that was $350k last year is now $500k
You could buy a decent new car around $17-18k. Now Dealers (once they ask you to come in) will not have anything under $22-$25k that is decent.
It hurts people on fixed income the most. It's sad. But yeah.. there is no inflation. Just keep believing propaganda.
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05-06-2021, 10:02 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 5,170
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I wouldn't say worried, but I hope USD$ doesn't fall in relation to CAD$. If CAD$ falls with it, I have no issue. Most of my money is still in the US/USD and for the last several years, I've been enjoying a 25% to 35% gain on my USD (1USD to 1.25-1.35CAD) and now it's coming down to about 1USD to 1.22CAD and it's still going down...) Before I moved here, it was at one point reverse (CAD was stronger than USD) which would be a bummer for me if it happened again.
My financial planning is based on my USD, so I can withstand the reversal of the USD/CAD exchange rate.
As long as the market keeps up with the inflation, I should be OK...
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05-06-2021, 10:03 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Feb 2021
Location: Puget Sound
Posts: 3,191
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I don't see anybody here not believing there is inflation.
Getting worked up about it is an exercise in futility. The solutions are political and we're not going to talk about it here I don't think
__________________
Class of 2023
OMY to 2024
Operating Engineer for a commercial plumbing contractor
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05-06-2021, 10:08 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 5,170
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I heard on the news or read in the paper that the stimulus checks would temporarily cause some inflation but it would be temporary. Prices in some sectors have gone up for other reasons like the shortage of materials due to COVID (Some lumber mills have shut down or partially shut down, delayed chip manufacturing for auto), combined with some increase in demand, which I think should ease once the production is back to normal or at least semi-normal. At least, these are my hopes.
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05-06-2021, 10:21 AM
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#18
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
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I’m concerned, but I retired in 2007 and survived that stretch. What bothers me now is things are not available. I ordered some reloading tools in March, the company said it may be 6 months to fill the order.
If one of my outboard motors were to go out it could be a year to get a replacement. Some parts are also unavailable.
Luckily I bought my saltwater access home last year, I don’t think I could have afford it now. Thankfully Florida has a homestead exemption that limits how much my taxes can go up a year.
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05-06-2021, 10:23 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,654
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Not much, then they start basing inflation on things I actually use I will study it more closely.
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"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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05-06-2021, 10:25 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 1,155
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Quote:
Originally Posted by yhoomajor
Not surprised many poster here commenting "I'm not worried". But inflation is what keeps most working class Americans in poverty generation after generation.
McD Hashbrown that used to cost $0.50 last year is now $1.99
McD Apple Pie that was $0.69 last year is now $1.29
Organic milk that was $5.99/g is now $7.99/g
A house that was $350k last year is now $500k
You could buy a decent new car around $17-18k. Now Dealers (once they ask you to come in) will not have anything under $22-$25k that is decent.
It hurts people on fixed income the most. It's sad. But yeah.. there is no inflation. Just keep believing propaganda.
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EXACTLY! I remember going round in circles on some previous posts with folks who insisted there was no or minor inflation in gasoline, even though I watched it go from roughly $2/gal to $3/gallon basically since November. Couldn't convince some otherwise..
Groceries are also way up. As is housing. And autos. Basically, most major commodities have had double digit percentage increases.
Even Buffet said the other day they are seeing "very substantial" inflation..
https://www.cnbc.com/2021/05/03/warr...ng-prices.html
I do think there's a pretty good chance we are headed for the worst inflation we've seen in nearly 50 years. Plenty of policy and economic reasons as to why, exacerbated by the Pandemic and supply shortages such as we've seen with lumber.
Saw a good interview with a contrarian fund manager on Taggert's channel recently..he was a Wall Street fund manager for something like 40 years and said this is the first time since the 70s that we will have substantially increasing inflation. That means all the old investing rules - like a 60/40 portfolio - go out the window. Bond funds (especially longer duration bonds) are likely to get hit pretty hard. The 10-year is inching up..basically, the signs are everywhere for those who are looking for them..
Unfortunately, I see our own situation as being on "fixed income" even though I have portfolio assets to pull from. There's only so much coming in in terms of dividends from funds and CDs..after that, it's portfolio sales to fill the gaps..and with CD rates at pretty much zero, things are getting a lot more dicey for those of us looking to fund ER mostly via income vs. selling assets..
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