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US Consumer Price Index up 4.2%

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Re: US Consumer Price Index up 4.2%

#261

Post by tharmas »

uep wrote: post #141
tharmas wrote: post #38

Earlier quoted context omitted.

Some businesses use that as cover to increase prices even when their costs may not have actually been affected by the price of energy. Never waste an opportunity to put the big squeeze on. Steadily rising prices will be the norm from now on. What will be interesting to see is how fast the corporate elite figure they can boil the frogs without them noticing too much. $50.00 hotdog is coming.

A small number of companies control the meat supply in the United States. If you decide that you don't want to buy that $50 hot dog, you likely won't have many comparable options.

Agreed, which is one reason (there are others) why restaurants are disappearing.

Re: US Consumer Price Index up 4.2%

#262

Post by inigyou »

jr3592 wrote: post #229
fluoridation wrote: post #194

Earlier quoted context omitted.

>The value of your savings is decreasing at a faster rate than ever before, so its a good time to stop saving and spend it? Inflation does incentivize spending, yes. Would you rather have 100 kilos of rice today, or wait and have 99 kilos of rice tomorrow for the same price?

> Inflation does incentivize spending, yes. All inflation incentivizes is finding an asset class that isn't devaluing. If that is what you mean by "spending" then we align. But does inflation incentivize spending money on depreciating assets? Only for fools.

Everything depreciates in a long enough term. What would you rather own?

Re: US Consumer Price Index up 4.2%

#263

Post by inigyou »

wat10000 wrote: post #224
jr3592 wrote: post #185

Earlier quoted context omitted.

This actually makes 0 sense. Like, do you even understand what you're saying? The value of your savings is decreasing at a faster rate than ever before, so its a good time to stop saving and spend it? The stock market increasing is not the same thing as inflation. What you're saying makes sense only if you are referring to stock market valuation... strictly retiring because inflation is high makes no sense.

Stock market returns will tend to exceed inflation. Salary may not. It's quite possible for inflation to make your salary shrink in real terms, making it no longer worth working if you can afford to retire.

There is absolutely no guarantee that stock market returns exceed inflation. The big US indices have for the last few decades, but they're extreme outliers.

Re: US Consumer Price Index up 4.2%

#264

Post by inigyou »

win311fwg wrote: post #241
rottencupcakes wrote: post #123

Earlier quoted context omitted.

Also is having twice as much money (1x from interest and 1x from income) not a benefit? Maybe you are the strawman consumer that skeptics point to in guaranteed basic income debates, who just stops working because they get a check.

If the first 1x covers all your spending, what else are you going do with the other 1x? Invest it in even more investments to produce more income that you already cannot spend? That turns into what is essentially working for free. Why bother?

That turns into working hard so you or your descendants can eventually own the world. Jeff Bezos did it. Elon Musk did it. Bill Gates did it. If any of today's billionaires stopped when they had enough money, we wouldn't be talking about them.

Re: US Consumer Price Index up 4.2%

#265

Post by fhdkweig »

grassfedgeek wrote: post #192
paulddraper wrote: post #27

Earlier quoted context omitted.

Also, any asset that isn’t appreciating at least 4.2% is losing value. Ah…inflation.

The solution is Treasury Inflation Protected Securities (TIPS). You do have to pay taxes on the inflation adjustment (OID income). As long as the interest (after taxes) is higher than taxes on inflation adjustment you're good.

Don't forget the $10,000 annual limit of purchases. If you want to go heavy into TIPS, you can hit that limit pretty quick.

Re: US Consumer Price Index up 4.2%

#266

Post by usrnm »

advisedwang wrote: post #30
usrnm wrote: post #24

Earlier quoted context omitted.

Energy going up drives evrything up, including food. Everything we do depends on energy in many different ways.

It's possible for energy to be behind the rises in other cost, but the data presented here gives no evidence for or against that possibility.

It obviously is part of the rises in other cost. We can argue how large a part, but I cannot imagine a world where they are unrelated

Re: US Consumer Price Index up 4.2%

#267

Post by Balgair »

tencentshill wrote: post #254
Balgair wrote: post #236

Serious question here: Can we trust these numbers out of this admin? I've not been super plugged into the latest news out of the BLS, but I seem to remember a lot of political firings in the 'econ' part of the government. I do not mean to be glib here either or start a flame war. I am genuinely asking.

It's currently headed by a pretty by-the-books guy, after a series of trump loyalists were rejected. Next up for nomination is another boring career professional, who actually pushed back against trumps bullshit and survived. https://www.reuters.com/world/us/trump-nominee-head-bls-supp...

Whew! thank you!

Re: US Consumer Price Index up 4.2%

#268

Post by win311fwg »

inigyou wrote: post #264
win311fwg wrote: post #241

Earlier quoted context omitted.

If the first 1x covers all your spending, what else are you going do with the other 1x? Invest it in even more investments to produce more income that you already cannot spend? That turns into what is essentially working for free. Why bother?

That turns into working hard so you or your descendants can eventually own the world. Jeff Bezos did it. Elon Musk did it. Bill Gates did it. If any of today's billionaires stopped when they had enough money, we wouldn't be talking about them.

Except all of the above settled for 1x, quitting their jobs (where they had one) to pursue their personal dreams. It so happens that their dreams also turned into something valuable, but that's secondary. They would have never been able to seek out their dream or turn that dream into something valuable had they accepted 2x.

Re: US Consumer Price Index up 4.2%

#269

Post by phil21 »

jr3592 wrote: post #244
fluoridation wrote: post #240

Earlier quoted context omitted.

??? "All" it incentivizes? Uh, no. The vast majority of people don't treat their salaries as an investment opportunity, they have to live off it. If you need to fix your water heater, you might get it fixed now while inflation is high than wait until winter (not a great example given the time scales involved, but it gets the point across). Even if you have nothing that you desperately need, if inflation is really hig…

??? OBVIOUSLY if you absolutely HAVE to spend money because your life depends on it (ex: hot water) then you're going to be incentivized to spend it sooner rather than later in an inflationary market. I'm referring to discretionary spending. Eating out. Buying a new laptop. Traveling. Etc. This statement: "it pushes people to get rid of currency by any means they have available." is just flat out wrong. If you're dra…

Inflation absolutely stimulates spending. Especially if it's predictable and people are paying attention.

Peak COVID it was obvious inflation was going to hit hard in some sectors. So I loaded up on durable goods like HVAC, hot water heater refreshes, major appliances, and even pushed some home maintenance forward where labor and materials were likely to skyrocket.

I certainly made a bet, and a lot of it had to do with "lifestyle" - in that I wanted upgrades of most of those things either way over the next 5 years. I just pushed the spending forward by a whole lot since money was going to be rapidly worth less and those specific goods I predicted were going to outpace generalized inflation. I also wasn't certain my income was going to be secure for the long haul so I'd rather spend the money while it was still regularly coming in vs. being stuck later.

Same went for looking at laptops late last year. Since I'm in the IT industry it was obvious memory and flash storage prices were going to go parabolic, and consumer pricing was lagging the market at the time. If you saw this happening you'd be pretty silly to sit and wait on it for another 6mo.

And the same goes for investment class assets. As those outpace wage growth by multiples, your salary becomes less and less important. Once your salary is in the low double digits of your total income in a given year I'd say it's probably time to take a hard look at continuing to work. The juice no longer becomes worth the squeeze. And asset price inflation means this decision point is brought forward years - perhaps decades - for some people.

It obviously doesn't mean go YOLO in your 20's. But if you're 58 years old and were thinking you'd work another 8 years - perhaps it's time to reevaluate the situation. Adding another 3% a year to your dragon hoard via wage savings might not pencil out how you think it will.

Re: US Consumer Price Index up 4.2%

#270

Post by dlandis »

SirMaster wrote: post #219
bluGill wrote: post #7

Remember this next time you get your yearly review/raise. 4.2% is what you need to stay even, anything less is a pay cut.

This never made sense to me. Doesn't this assume you are spending ALL your income though? If I make 100K and get a 3% increase, that's $3000 more. But if I only spend 30K to live, and my living expenses go up 5%, that's only a $1500 increase to my living expenses while I earned $3000 more that year. So how is that a pay cut if I actually have even more money left over that basically just goes into my investment accou…

You are exactly right. You are most likely not getting a pay cut just because your raise doesn't match inflation. It totally depends on how much of your money you are spending and what you are spending it on.
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