Inflation

I think that most people find ways to spend less inflation adjusted. Since some large number don't have emergency savings and prices go up more than wages for the most part, they only have few options. Run up debt more or spend less.
 
Amazon Fresh sent me some coupons by mail and email, they must know I'm on a fixed income.

So in my quest to fight inflation I figured $10 off a $20 purchase would be a fun way to see their store.

We go and look around the high priced items and were surprised to find boneless, skinless chicken breasts 1/2 price at $1.50/lb.
That is a good deal, so I bought 10 lbs and a couple of other things.

I don't think I'll see the effective rate of $0.75 /lb for chicken like that again.
Amazon Fresh must be different from their Whole Foods Stores, they just announced closure of some stores today.
https://www.businessinsider.com/ama...abama-massachusetts-california-chicago-2022-5
 
I would say that USD has proven to be not so liquid as it was/is touted to be. Russia can't even get zero cents (or rubles) out of their $400Billion plus USD(+Euro) reserves. So much for its convertibility. Any country that is not in the sphere of US/EU influence will have to think twice of parking their hard-earned savings in US/Euro reserves. Because those can be frozen (effectively stolen and given away to others) any time based on political circumstances.Russia is not the only one that has happened to. It was done to Iran. It happened to Venezuela.

This points to the strength of 10,000 years history of Gold standard in human society. If you had possession physical gold, you had the full liquidity of gold. That was yours and only yours. Lot of introspection will occur world over after current macro level events come to their natural conclusion.

Perhaps the lesson learned from the Russia events won’t be to avoid USD. Perhaps it will be don’t roll tanks into your neighbors country, massacre civilians, and rape women and children. What we have there is way beyond “political events”.
 
Yuan/renimbi is not considered freely convertible...China's government can and has intervened in setting its value.

I was going to say the same for the Russian ruble but post-February 24 the ruble is no longer convertible in world markets...for the moment it has basically become an internal currency only.
It is our intention to crush ruble back to the Soviet ruble condition. However, as soon as US/EU sanctions were announced, ruble had crushed from about 78 rubles to US$ to 125 - 129 rubles per US$. Then Russia announced that the Nat Gas supply to the "unfriendly countries" would be paid only in rubles, set up Gasprom Bank to receive Euro or US$ and exchange them to ruble, result is 71 ruble p US$. Russian main exports are metals, oil, NG, wood, grain, weaponry, sea food, all of them have demand in many countries. In regard to China, they try to sit on the fence in Ukraine war and understanding that soon or late clash with US is going to happen. Russian economy is only less then 10% of our but Chinese is already ahead of us by PPP GDP. Surely they control Yuan exchange but many countries are looking at Russia, which kept large amount of their reserves in US$ and Euro. Now they are frozen. From 1940s through 1990s we were the largest in the world producer of durable goods. But now we print fiat money and invest them around the world while it is China which is main world manufacturer and most people understand it.
 
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Just got back from Costco where I saw a clear example of inflation.

I needed to get some pool chlorine tablets, and had to pay $189 for a pail of 40 lbs. The last time I bought one such pail was a bit more than 1 year ago, and I am not sure but think I paid around $100 or not a lot more than that.

Back at home, my wife urged me to go look online at other stores to see if any of them would have a better price. I said it would be highly unlikely, but did it anyway to be sure.

Walmart has 50-lb pails for $250. Home Depot has 25-lb pails for $105. Sam's Club has 40-lb pails for $199, but they are out-of-stock.
 
Also, China has far greater reserves in US$ than any other country. Only US Treasuries are above $1trillion. Do you think China does not understand what might happen if we are not going to be able to repay it or because of any their hostile actions, we may freeze it? Keep in mind that China is the oldest, largest in numbers civilization (around 5,000 years), surely they developed their philosophy and policies to survive so long while all ancient empires and great nations of the past had perished. It is not going to be easy competitor for us while we are adding enemies instead. Our chance to win this competition and strengthen the US$ is in development of new technologies, do not let them being stolen and cheaply copied and make it only in US. Globalization is over. Just what I think.
 
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There are already signs that the American public is starting to pull back in the face of inflation. Granted some things like travel, which was basically stopped for over a year, are still going strong, but we will work through that this year, IMO.

https://www.wsj.com/articles/americ...tigue-and-some-companies-see-a-breaking-point

Companies that made everything from baby wipes to washing machines were able to raise prices without denting demand much. Now, some executives and analysts say that Americans’ buying power is being squeezed by inflation, which in March hit the highest annual rate since 1981. Grocers and other food and staples sellers, for instance, say shoppers have increasingly been seeking discounted products and lower-cost brands.
“U.S. consumer confidence has been shaken by rampant inflation and geopolitical uncertainty in recent months,” Tempur Sealy Chief Executive Scott Thompson told analysts Thursday.

OTOH, McDonalds, Coca-Cola and Amazon are continuing to see strong demand for products. Right now I think it's the lower-income people getting hid the hardest. What else is new? But even we LBYM folks may start the feel the pinch as inflation reduces the buying power of our IRAs, 401Ks, and pensions.

For the first time since I retired my pension's COLA cap will keep me from being made whole. The cap on the COLA increase is well below 8.5%.

FWIW, I just tried to blow some dough on nice accommodations while taking a two week vacation. But, the hotel insisted on upgrading my room for free. Then they gave me 20,000 extra points - almost enough for another free night.

FYI, I still have not heard back from my Congressional Representative on my idea to raise the I-bond limit to 50K during these inflationary time.
 
I think I just retired at the wrong moment

Might be time to take a contract job after all!
 

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$147 for Pa state inspection,and oil change at Ford dealer. Crazy. 5/22
Just back in 2/22 had my car inspected and oil change at Honda. $88
Oldmike
 
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There are already signs that the American public is starting to pull back in the face of inflation. Granted some things like travel, which was basically stopped for over a year, are still going strong, but we will work through that this year, IMO.

https://www.wsj.com/articles/americ...tigue-and-some-companies-see-a-breaking-point

I don't have a budget, but one of my fun, free pastimes is to record every last cent that I spend in an Excel file. At the end of every month, I add up what I spent that month and keep records of everything.

So, on April 30th I added up what I spent in April. Then I determined exactly how much I had spent in 2022 up through April 30th. Comparing that with 2021, it turned out I had spent $65.79 less in the first four months of 2022 than I did in 2021. I guess this was all due to a little bit of instinctual pull-back, since I was not even trying. Everything is higher in price but there are a lot of cheap/free things that I like to do, so maybe I have been having fun focusing on those things a little bit more than I did last year. I know I can be a lot more frugal than this if I really "hit it" when it comes to LBYM.

I wonder if maybe other ER forum members also find they are spending less than last year?
 
FWIW, I have found that eating out is one of those things that has a big effect of spending while not hitting the overall quality of life very hard. On my last trip, the room I rented had a small kitchenette. Through the clever use of frozen meals and desserts from Trader Joes, fresh fruits and veggies, and cheap wine I probably ate for 1/3 the cost of of normal vacation meals. If nothing else I will often skip the glass or wine with dinner or the beer with lunch and instead consume adult beverages purchased at the supermarket in my room while relaxing for the evening. Did I mention I can got six slices of cheese cake from Trader Joes for the about 20% more than the price of one slice from a local restaurant? That and a bottle of Portuguese wine from TJ's cost little more than a dessert or a glass of wine from a restaurant.
 
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Food and dining are our biggest expense. Trying to figure out how this is possible. $2265 / month for two people. That's $75/day. It hasn't changed much in the last 2 years. Just cutting dining in half would offset the market losses for 2022. $600/mo for 35 years is a lot of savings.
 
Food and dining are our biggest expense. Trying to figure out how this is possible. $2265 / month for two people. That's $75/day. It hasn't changed much in the last 2 years. Just cutting dining in half would offset the market losses for 2022. $600/mo for 35 years is a lot of savings.


What kind of places do you eat out at? Even $600 would buy a lot of meals out for pizzas, Chinese, Mexican, Indian or pub food.
 
Food and dining are our biggest expense. Trying to figure out how this is possible. $2265 / month for two people. That's $75/day.
We have been spending about 1/3 of what you are spending on food. But part of that is because we are getting older, and trying to lose weight, so we don't eat much at all any more. We generally share one take out meal and often skip a meal in our eternal weight loss efforts. We also are very choosy about what restaurants we get our food from, and choose the healthiest meal we can order there, and don't buy extras like appetizers, drinks, desserts, etc.
 
What kind of places do you eat out at? Even $600 would buy a lot of meals out for pizzas, Chinese, Mexican, Indian or pub food.

I just broke it out:

Food: $1,087 / mo This includes everything we buy at the grocery store which includes cleaning supplies, paper products and who knows what else.

Dining out: $718 / mo Our average bill is $80-$100 and has at least $30 of alcohol

DoorDash: $459 / mo Holy Crap! This is an issue. There were months where we spent over $1000 on DoorDash. We'll start with this.
 
DoorDash: $459 / mo Holy Crap! This is an issue. There were months where we spent over $1000 on DoorDash. We'll start with this.

I have known people to pay $7 to get $5 worth of fast food delivered. It's crazy.

Does anybody still use Schwans delivery service? I would think they would be doing very well these days. A neighbor is a regular customer, getting deliveries at least three times a month from the guy in the Schwans truck.

https://www.schwans.com/
 
It's amazing how small expenditures add up over time.

Agree. $459 / mo x 35 year planning timeline = $192,780 in 2022 dollars. Using the 4% rule, that means I would need $137,700 more savings to retire. Yikes!
 
Agree. $459 / mo x 35 year planning timeline = $192,780 in 2022 dollars. Using the 4% rule, that means I would need $137,700 more savings to retire. Yikes!

Add that to some other non event type spending that a person does and it adds up to real money!

There are a few posters on this site that never earned more than $40 K per year and saved enough to retire. Granted, they probably aren't driving a Mercedes, but they made it.
 
My WR is so low, inflation has to hit harder and for longer before I need to consider changing my spending habit.

Still, I cannot help notice the higher prices. When you spend more to get the same things you used to get for less, of course it does not escape your attention.
 
I know that Jim Rickards is Gold promoter, yet he does not advise to keep Gold in more than 10% of anyone portfolio. However, how true is what he states about US$ future and statement that we are in depression, what will last longer than any depression or deep recessions before in history? Like many of us, I do nothing with our equities but wait till the Market/ economy improves. What do you think, how true Mr Rickards predictions?
https://jimrickards.blogspot.com/
 
I just broke it out:

Food: $1,087 / mo This includes everything we buy at the grocery store which includes cleaning supplies, paper products and who knows what else.

Dining out: $718 / mo Our average bill is $80-$100 and has at least $30 of alcohol

DoorDash: $459 / mo Holy Crap! This is an issue. There were months where we spent over $1000 on DoorDash. We'll start with this.

Our food/alcohol all in budget is 1,375 monthly, so not cheap. We both don't like to cook, so there is that.
Just changed the mix and will be healthy food service for 2 days, pick up microwavable healthy dinners 2 days and eat out or order in 3 days a week.

Trying to use Uber Eats type services less, as with all the fees it is equal to tipping in a restaurant.
 
I am seeing the biggest impact in fuel costs. DH and I like to take rides in the country at least every week, maybe take a picnic lunch. We are cutting that out and just having the picnic in our own yard.
 
I don't burn a lot of gas. But it's the cost of home repairs, building materials, and such that are the hardest on me because I had been putting off a lot of stuff hoping to retire first. Combined with my retirement fund slashing the net fixed return to less than half what it was was and stocks falling, it's the perfect storm.
 
I don't burn a lot of gas. But it's the cost of home repairs, building materials, and such that are the hardest on me because I had been putting off a lot of stuff hoping to retire first. Combined with my retirement fund slashing the net fixed return to less than half what it was was and stocks falling, it's the perfect storm.


The chances of a recession are pretty good and high mortgage rates are going to slow down home buying and home equity improvements, so in a year or two those home projects might not be as expensive.
 
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