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How hard is inflation going to hit, or has hit?

It'll hit hard enough that I'm thinking I should be getting more and more into selling firewood. I have a steady supply and can deal with cash under the table.
 
ThePanzerFuhrer said:
The stupid thing is the best way to hedge against inflation is buy as much shit as you can on credit. When you repay it with currency that is worth 80-90% the purchasing power you bought the shit with. If you can hold the note while the economy swings because of inflation you win and the banks lose.
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This is the concept I really need to start grasping. I sit down and think about this for a bit, it does make quite a bit of sense. Buy a $30k whatever now, when in five years the same thing is $75k.
 
Inflation has already hit... but its nowhere near done yet.

Use the low interest rates to catch up on outstanding debts.

Learn to live on a low taxable income and hang on tight.

EDIT: The big flaw in buy-now/repay later is your wage won't inflate the same.
 
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I think it’s in full swing.
 
ThePanzerFuhrer said:
It’s the stupid Mitsubishi 6 cylinder motor. Cat calls it a 3046. They have a notorious tendency to window the block. Which it’s windowed as we speak. Was gonna retrofit a 4bt in there but I’m always short on time. I can find new ones for about 12,000ish. It’s a nice dozer it can’t have but 100 hours on a new undercarriage.
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Basically what i have said i always wanted. Land, a dozer, and a case of beer for the weekend. Just cruise around and plow trees over.
 
We plan on selling our house within a year to take full advantage of this mess. We have a place to stray rent free in the mean time and will capitalize once the market corrects itself.
 
So what I took out of this, is that I should sign a note on another new car.
 
Might have waited a little too long to buy that piece of land in the country. :mad3:
 
montrose818 said:
So what I took out of this, is that I should sign a note on another new car.
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No they lose way too much value driving it off the lot. It’s hard for inflation to beat that instant loss you get.

In my case it’s a used cone crusher. A really nice machine for 200,000. A new one of the same model costs 880,000 this year. Next year they will be 950,000. My 200,000 machine will almost certainly go up in value as long as I don’t blow it up. Even then do the repairs and she is good as new. I have quite a few machines like this. Where I can sell them for more today than what I originally paid for them.

You need to buy stuff that will be in demand and don’t depreciate fast.
 
Wizzle said:
They claim gdp will be 6% this year but we’ve produced hardly anything and spent trillions on “stimulus”. If these stimuli were actually working there’s be no need for more of them but yet they’re talking about $4T more...China however has produced trillions of goods and we are consuming them with our stimulus money.

They claim no inflation is happening at all but I’ve read that figure is actually 2% inflation. No inflation is the word of the government claiming nothings wrong and we all know how good their word is. The FED is working side by side with treasury with no degree of separation and refuses to move interest rates above zero. Money is cheap to access right now and the more you play the game the higher you’re credit score goes and the more you’re rewarded with more free money.

We’ve all seen how the average American citizen can’t be trusted to think past the “it’s only xxx per month” concept so this all surely will end poorly. It seems like China is licking its lips for this situation exactly.

To all the guys who plan to hoard cash(myself included) what good is a mountain of cash once the dollar loses reserve status and it’s buying power is diminished?
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I don't know if a believe "we’ve produced hardly anything".

Apparently you can't get boats and RV's so we are selling every one we can produce.

My line of work is BUSY and all my suppliers added multiple lines and they are still 6 months on getting us product. That is pure anecdotal, but it's what I see.

I don't know anyone WHO WANTS TO WORK who isn't. ( I know some who are out of work, and blame COVID, but they are really just not wanting to work)

I mean we are slammed.
 
woods said:
yea, tell me something I don't know. :flipoff2: :laughing:
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home costs are up $26k due to covid, currently, and my estimate increase an additional 8-10%
average down payment is 5% on median value $290k
equity used to take 3-5 years to build up to decent level (presuming appreciation and 20% down)
people are maxing out their budgets.
lending is exceptionally easy.
nearing the apex of greater fool theory as demonstrated in lot values given the bottom is rising, but the top has been relatively stagnant.
toy purchases are huge.
copper & large vehicle sales.
banks will need bigger mailboxes to accept all the keys theyll be receiving.


everyone is upgrading/upsizing, taking longer and larger notes, with less and less down, spending left and right. I'm over here slinking towards the exit building up any cash on hand i can.

As an FYI:

2/3rds of our builds are between $340-400k, the other 3rd is $400k+
2/3rds of all our clients had 1 adult working fulltime,1 part time max.
2/3rds of all out clients had leased vehicles, vehicles within 2 years old at the time, or bought new soon after closing
2/3rds built to their max allowances.
2/3rds within 18 months were calling to ask who installs inground pools, and most had that done (guessing equity)
2/3rds of our clients had travel trailers, boats and/or motorcyles.
most of the time, the above people were the same ones building between $340-400k, few were in the $400k+ range.

Im not a genius, but when i look around, i cant fathom what peoples monthly payments are and how they stomach it, knowing the jobs they work and some brief background of their finances. its no wonder most cant afford a surprise $1,000 bill.
 
u2slow said:
EDIT: The big flaw in buy-now/repay later is your wage won't inflate the same.
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your wage doesn't need to inflate. If you've bought x item now at a certain amount, and your pay doesn't decrease, then when that X item is twice as much due to inflation you're good.
 
I also don't think we've really seen inflation.

I think people have been stuck at home for the past year and have cash to burn that they either would have spent needlessly shopping for shit (clothes/purses/tools), haven't gone on vacations and want shit to do around town (boats/RV's) or have decided to use the crazy low interest rates to buy a house.

I think the rise in cost for many things is due to containers and transportation costs rising two or three times as much as it previously has, many factories around the world were shut down for 2-4 months last year and many are still not at full capacity and some of it is futures buying (construction) that is really just price gouging.
 
midwestzj said:
I also don't think we've really seen inflation.

I think people have been stuck at home for the past year and have cash to burn that they either would have spent needlessly shopping for shit (clothes/purses/tools), haven't gone on vacations and want shit to do around town (boats/RV's) or have decided to use the crazy low interest rates to buy a house.

I think the rise in cost for many things is due to containers and transportation costs rising two or three times as much as it previously has, many factories around the world were shut down for 2-4 months last year and many are still not at full capacity and some of it is futures buying (construction) that is really just price gouging.
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Yes. Some here are using inflation too general. The dollar (currency) hasn't really inflated, but costs have of many/all things.
 
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Trackerbacker(fvckvs) said:
home costs are up $26k due to covid, currently, and my estimate increase an additional 8-10%
average down payment is 5% on median value $290k
equity used to take 3-5 years to build up to decent level (presuming appreciation and 20% down)
people are maxing out their budgets.
lending is exceptionally easy.
nearing the apex of greater fool theory as demonstrated in lot values given the bottom is rising, but the top has been relatively stagnant.
toy purchases are huge.
copper & large vehicle sales.
banks will need bigger mailboxes to accept all the keys theyll be receiving.


everyone is upgrading/upsizing, taking longer and larger notes, with less and less down, spending left and right. I'm over here slinking towards the exit building up any cash on hand i can.

As an FYI:

2/3rds of our builds are between $340-400k, the other 3rd is $400k+
2/3rds of all our clients had 1 adult working fulltime,1 part time max.
2/3rds of all out clients had leased vehicles, vehicles within 2 years old at the time, or bought new soon after closing
2/3rds built to their max allowances.
2/3rds within 18 months were calling to ask who installs inground pools, and most had that done (guessing equity)
2/3rds of our clients had travel trailers, boats and/or motorcyles.
most of the time, the above people were the same ones building between $340-400k, few were in the $400k+ range.

Im not a genius, but when i look around, i cant fathom what peoples monthly payments are and how they stomach it, knowing the jobs they work and some brief background of their finances. its no wonder most cant afford a surprise $1,000 bill.
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I have some family that do this. Never figured out how they keep affording stuff.

I don’t mind carrying a mortgage and/some SMALL debt to keep my credit score afloat (government contractor, so credit score matters...), but I could not imagine a $2200 monthly mortgage payment, $650 monthly car payment, and whatever else these people have. Insane.
 
ThePanzerFuhrer said:
No they lose way too much value driving it off the lot. It’s hard for inflation to beat that instant loss you get.

In my case it’s a used cone crusher. A really nice machine for 200,000. A new one of the same model costs 880,000 this year. Next year they will be 950,000. My 200,000 machine will almost certainly go up in value as long as I don’t blow it up. Even then do the repairs and she is good as new. I have quite a few machines like this. Where I can sell them for more today than what I originally paid for them.

You need to buy stuff that will be in demand and don’t depreciate fast.
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I only deal in <$50k equipment and trucks, but I'm finding out theres a HUGE seperation in middle class now.

Very few people have $10-50k cash on hand. But theres the opposite of people who cashed out from commiefornia (or other high priced shitholes), run like the intolerable rats they are, and pay $500k+ cash for a new house. Fucking up local markets.

They still finance everything because "they can afford it". On the same token they couldnt pay anything off if they lost their jobs in 6 months. But hey, that's the american way.
 
I'm buying equipment and income generating property that could be left to my kids. I like silver. I've sold my shiny toys, but holding back a few fixer uppers, so that i can someday just add the hours and have a classic
 
grumpy356 said:
When we are so concerned with how the economy is about to tank, yet there is such a demand for toys, makes me think that we aren't in any danger.

When people quit looking at Boats and RV's.. because they can't afford their rent and groceries, then we are starting to have problems.



My GAWD!! MY GAWD!!! WHAT IS HAPPENING TO THE ECONOMY????? I CAN"T EVEN GET A NEW BOAT!!!
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Venezuela had a good sized upper-middle class, all out buying boats, atv's, new cars, new houses etc... 8 years later those mother fuckers were eating rat sandwiches with no bread.

Just something to think about.
 
Alpine4x4 said:
We plan on selling our house within a year to take full advantage of this mess. We have a place to stray rent free in the mean time and will capitalize once the market corrects itself.
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Turning anything in cash right now seems like a bad move. Land and real estate will always grow in value over time (even though there can be some up and down fluctuations superposed). They ain't making any more land. The same cannot be said of cash. Its just ink on paper that can become worthless. Ask people in Venezuela what their bolivars are worth these days.
 
ThePanzerFuhrer said:
Yes and no. I said you finance those big purchases that will most definitely inflate in value. I want cash to be able to capitalize on others misfortune. The guys that need to sell their toys today because tomorrow they need to make the house payment.
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Financing gives you leverage. Same as buying a house or other large assets that don't super depreciate fast allowing you to put your money to work. For instance if you bought a house last year and could pay cash but you financed it and put the rest in the market you would have basically doubled your asset value with no 'work', always have to weigh the opportunity cost.
 
Wizzle said:
. . . To all the guys who plan to hoard cash(myself included) what good is a mountain of cash once the dollar loses reserve status and it’s buying power is diminished?
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Why on Earth would you hoard cash if you expect its buying power to diminish? That makes about as much sense as a soup sandwich.
 
Eric said:
Turning anything in cash right now seems like a bad move. Land and real estate will always grow in value over time (even though there can be some up and down fluctuations superposed). They ain't making any more land. The same cannot be said of cash. Its just ink on paper that can become worthless. Ask people in Venezuela what their bolivars are worth these days.
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Its valued at more than its worth right now because we're on a bubble with low interest rates and material shortages and COVID causing a lack of inventory. As soon as those interest rates creep up in ~2yrs this bubble will pop, prices will fall (not plummet) and the market will be ripe for those with the cash reserve.
 
Cash is King, always has been, always will be. If no one has cash how are they gonna buy your junk?
 
Wizzle said:
They claim gdp will be 6% this year but we’ve produced hardly anything and spent trillions on “stimulus”. If these stimuli were actually working there’s be no need for more of them but yet they’re talking about $4T more...China however has produced trillions of goods and we are consuming them with our stimulus money.

They claim no inflation is happening at all but I’ve read that figure is actually 2% inflation. No inflation is the word of the government claiming nothings wrong and we all know how good their word is. The FED is working side by side with treasury with no degree of separation and refuses to move interest rates above zero. Money is cheap to access right now and the more you play the game the higher you’re credit score goes and the more you’re rewarded with more free money.
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What the Fed says isnt what they are actually facing. You cannot take it at face value and have to look between the lines. They are saying they will keep interest low because they want to target an average inflation of 3% (ya know, it is the best for a healthy economy and all my homies in the markets) and we have been near zero for so long, so inflation needs to run wild for a bit to get to the average.

This is horseshit double-speak to feed the msm to appease.

The Fed is in a major pinch right now. The gov doing the stimulus money dumps is putting the economy into flash overdrive, which we see in all the dash to buy dumb stuff. Too much free money sloshing around. The Fed should be bumping interest up to cope with inflation. It is really their only "responsibility". BUT..... raising interest rates on the stuff we do, also raises rates on a good portion of our federal debt, which Biden is actively adding to. That increases our interest payments on national debt. Our debt service payments become a larger and larger part of our fed spending, ie increasing the interest rate adds to our yearly deficit. The big problem is, if the interest rate is raised enough, our debt service obligations can exceed our total tax revenues. Then the downhill slide turns into a death spiral.

Sitting on cash banking on better opportunities from devalued dollars is a risk. While you sit on the cash, you are taking all the devaluation. There may be opportunities later, but your buying power is also reduced. It is kind of like timing the market trying to buy at the bottom and sell at the top, you might get lucky and hit it right, but most people dont. However, as long as you understand the risk you are taking, I say go for it.

There are only a few ways to resolve the debt since it aint getting paid back. The most likely in my mind is a new currency that will be installed as an emergency manner and will have transferability for a short time at a huge loss to anyone with cash. ie New Money = USD x .01 or USD x .00001. All USD debts will be wiped (well, those connected people will get compensated, but everyone else will get the bum rush). If that is really what happens, having all your money tied up in tangible things and real estate is about the only way you will get through without a huge loss. It hasnt been done here before, but has in other countries. The new one will probably be digital only and backed by a collection of foreign financial structures, you know, cause the Euro has worked out so very well.
 
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