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

(Untitled)

What is the obsession on rental property?  I could see is pre covid but with the ongoing eviction moratorium why take the risk.  Hell my state just expanded it thru July of NEXT year.  Going forward when Covid 21 or 22 hits you can be stuck with the payments while someone sits in your house and you cant do anything about it.
 
I know a guy who sold his house last April when the news said we were all going to die and the house he sold is now worth $400k+ more. He has rented the past year :homer:
 
TRINDU said:
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.
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​​​​​The house I'm renting in a good example case. It's worth about 900k when comparing recent comps. We are renting for $3000 a month. We made them a 1.1 offer on it, which they turned down. They put it on the market, and sold it for a 1.5m cash offer from a lawyer in new hampshire. It is going to screw up valuations for a year around here (very limited market), and now we have to move out in 2 months.
:mad3:
 
jpmassey said:
​​​​​The house I'm renting in a good example case. It's worth about 900k when comparing recent comps. We are renting for $3000 a month. We made them a 1.1 offer on it, which they turned down. They put it on the market, and sold it for a 1.5m cash offer from a lawyer in new hampshire. It is going to screw up valuations for a year around here (very limited market), and now we have to move out in 2 months.
:mad3:
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I understand I'm in a shitty location... but 900k here is Hugh Hefners house on 100 acres with a 56 acre lake. :laughing:
 
clodhopper said:
.

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.
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The first paragraph, the battle between QE, QT a rollercoaster market, and killing confidence = 1 credit card/loan to centralize a debt, and getting a 2nd to gain access to collateral, then a 3rd to pay of 1, #4 to appease 3 short term. Once entered, it's only a spiral. Sometimes up, sometimes down, but best to just ride it..

The 2nd paragraph, yes, mostly. But buying land/mortgage assets will devalue more severely. For instance, 3 years ago you buy a house for 300, today, its total value now is 370, during crash you lose 5k/month or instantaneously loses 80k because you bought the up cycle and now you still have to sell for another 20k loss.(exaggerated ish) or your 300k in cash (worst case for liquidity/ conversation sake) 3 years ago, is still worth $300k today, face value.

Assets are only worth what liquidity you can garner from them, in most cases, $1 bill printed in 1970 has the exact same exchange rate with one printed today, where as the item you bought with $1 in 1970, is only worth what one will pay for it today..

Cash=king
Cash >gold/silver>assets for purchasing power. Hedges/investments totally different.
 
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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Dont forget its been pretty much against the rules to evict people for non payment for over a year now. #covid
 
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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I'll give you $1750 and 2 30 packs of your favorite beer for it delivered :laughing:
 
Lots of leverage out there, inflation will run 5%-10% for the next few years. The stock market is set up for an ass kicking when it pops, like always there will be a run for the door and a lot of people loosing their stuff they can no longer pay for. My biggest fear is holding too much in US dollars as inflation really gets fired up.
 
Watch out for truck prices. Cars, trucks, toys, vintage trucks are hot. Vintage trucks are hot because they're both toys, and trucks, and when a new f150 is 50k, it kinda makes sense to put 5k worth of tires wheels paint upholstery into a 87 long bed.
Here's where the inflation isn't textbook, gas goes to $6 gallon and employment dips, or fails to rise. The bottom falls out of the truck market, hitting the vintage trucks twice as hard.
Happened in 2009, 10, 11, couldn't give trucks away.
 
Projectjunkie said:
Watch out for truck prices. Cars, trucks, toys, vintage trucks are hot. Vintage trucks are hot because they're both toys, and trucks, and when a new f150 is 50k, it kinda makes sense to put 5k worth of tires wheels paint upholstery into a 87 long bed.
Here's where the inflation isn't textbook, gas goes to $6 gallon and employment dips, or fails to rise. The bottom falls out of the truck market, hitting the vintage trucks twice as hard.
Happened in 2009, 10, 11, couldn't give trucks away.
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I can’t wait. I’m gonna pick up every one i can possibly afford.
 
Projectjunkie said:
Here's where the inflation isn't textbook, gas goes to $6 gallon and employment dips, or fails to rise. The bottom falls out of the truck market, hitting the vintage trucks twice as hard.
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i want a big block powered 3door, so fingers crossed
 
ThePanzerFuhrer said:
I can’t wait. I’m gonna pick up every one i can possibly afford.
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that'll be the time to do it


go cruise the tow rig forum and listen to everybody that bought a new 2009-12 diesel truck for 30k go on and on about how they put 100k on it and traded it in on a 70k 2017 and got 30k trade in :laughing:

Yup, they got a good deal new, and did ok, but bought the new truck at the inflated price

Me, I hope to slide right in on a brand new skid steer with factory 0% financing, then pay it back with watered down dollars.
I know that's just a toy in your world, but that's a decent one man career I can hand off to my son.

ROI probably better than a 4 year degree
 
So with wages being the last to rise, how does taking out dept/ loan now benifit you in an inflation scenario.

Even if a $5k tractor today is worth $10k in a year it still only holds the same buying power... unless you are going to trade the tractor for 2 Escalades that are now worth a lot less since no one is working

I must be missing something


Or your truck thats worth 15 today (half what a new skidsteer is worth) will be worth 30 tommorow and you can "trade up"
 
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Quit reading on page 3. Agree we are seeing the first of the inflation, and I am dumping all my toys for down payments on storage facilit(ies). Just bought one with 113 units, working on another. Raise the down payment money now while people are getting into debt by selling toys, buy with 2021 dollars and pay back with 2031 dollars once rates chase up the inflation. First one is working out well thus far. Had my first "wake up, first of the month" payday event, it's much cooler than making stuff out of metal and then waiting 45 days to get paid for wearing out your body on concrete
 
Trackerbacker(fvckvs) said:
The 2nd paragraph, yes, mostly. But buying land/mortgage assets will devalue more severely. For instance, 3 years ago you buy a house for 300, today, its total value now is 370, during crash you lose 5k/month or instantaneously loses 80k because you bought the up cycle and now you still have to sell for another 20k loss.(exaggerated ish) or your 300k in cash (worst case for liquidity/ conversation sake) 3 years ago, is still worth $300k today, face value.
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I dont disagree with your math. I fully understand what you are wanting to do. The risk is your income increase will lag the market (cost). Depending on the lag, you may find you need your cash to stay afloat paying bills. In this situation, having the cash in hand helps as hard assets are likely hard to liquidate fast enough to cover the difference between cost and income. But that might be the reason to make hard changes financially rather than be tempted to dip into cash. The main reason I sit on the asset side of things is the potential for an end to USD and intro some new currency will really jam it in to cash holders and less a problem for asset holders. I spent enough years talking to people who lived through the depression to compare how some did well and others lost it all. The one thing I learned was a bucket of cash can turn into nuthin pretty quick.
 
ThePanzerFuhrer said:
No shit. I just purchased a 180 acre farm with house barn machine shed for less than half that :eek:
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i've been poking around at property in the Cable area... very affordable compared to here... but the politics...
 
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.
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Doesn't the "official" GDP number still include gov't (debt) spending?
 
2big bronco said:
So with wages being the last to rise, how does taking out dept/ loan now benifit you in an inflation scenario.

Even if a $5k tractor today is worth $10k in a year it still only holds the same buying power... unless you are going to trade the tractor for 2 Escalades that are now worth a lot less since no one is working

I must be missing something


Or your truck thats worth 15 today (half what a new skidsteer is worth) will be worth 30 tommorow and you can "trade up"
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Well, the tractor is a good store of value. But if you have a use for it, it can also be income in the meantime

taking on debt now means you have to have enough savings to service the debt before the appreciation.

i won't buy a boat on payments, but I'd buy something with utility value, like a backhoe, tow truck, or 14k equipment trailer:laughing:

Hold enough cash on hand to still scoop up deals, but convert the savings to income producing property or equipment. :usa:
 
Projectjunkie said:
Watch out for truck prices. Cars, trucks, toys, vintage trucks are hot. Vintage trucks are hot because they're both toys, and trucks, and when a new f150 is 50k, it kinda makes sense to put 5k worth of tires wheels paint upholstery into a 87 long bed.
Here's where the inflation isn't textbook, gas goes to $6 gallon and employment dips, or fails to rise. The bottom falls out of the truck market, hitting the vintage trucks twice as hard.
Happened in 2009, 10, 11, couldn't give trucks away.
Click to expand...

"Vintage" is powered by heartstrings. The asswipe that thinks his clapped out 80s K10 is worth $10k will see the hit. The nut and bolt restoration for a <70s pre smog will still pull money. Labor and material will still be premium.
 
TRINDU said:
"Vintage" is powered by heartstrings. The asswipe that thinks his clapped out 80s K10 is worth $10k will see the hit. The nut and bolt restoration for a <70s pre smog will still pull money. Labor and material will still be premium.
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Maybe, maybe not.

I want a super clean 67 mustang fastback, and some day may shell out 30k for the right barn find. But if 2020 f250 king ranches with air conditioned seats are sitting in repo lots I might go putting $25k bids on them, I may put my car enthusiast dollars into a different sector. Maybe i opt for one of those 700hp late model dodges. Or the guy who would be buying a 50k restoration looking around, going, shit, I can buy 10 foot drivers for 7k, I'll get a red one, a blue one, and a black one.

We don't know what'll happen. I think there'll be choppy water, not necessarily all boats on a rising tide.
 
gunracer1 said:
i have been thinking about buying another house because of this.
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you and everyone else
to my mind, people are scrambling for things to put their money into, that's the driver for the massive inflation
people see their dollar getting to be worth less, so they don't trust it and are trying to get anything they can with it
 
As many others have stated, hoarding cash is the wrong move right now. With that being said, always keep a 5-10k buffer of it. Anything more should go toward tangible items..

I just paid my truck off way early since it was costing me the most interest, now that payment is going toward the principle of my mortgage while still keeping my eye on land and properties.

We've seen nothing yet as far as inflation goes... with the way they are printing money, the artificially stimulated economy, and the bulk of idiots not living within their means, I have no idea what's going to happen
 
bgaidan said:
So what's the best way to hedge against the inevitable mass inflation as far as cash and/or property go?
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brantb said:
I think everyone would like to know the right answer. I am trying to find income generating land to dump my cash into.
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Finance property at an interest rate lower than inflation, or gold. Gold has historically been the benchmark against inflation. An ounce of gold in the late 1800's would buy a nice suit. Same holds true today.

Trackerbacker(fvckvs) said:
Dont confuse supply v. demand, inflation and price increase/gouging.

Theres a metric fuck ton of shit going on with weird dynamics in play not seen before that'll skew past indicators.

My opinion, 7-14 months you'll see crumbling and dominoes swaying. Reasoning will be the early 70s,late 80s and late 00s recessions basis all rolled into 1.

I hope im wrong, but if I'm right, I'm planning to take advantage. :stirthepot:
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My wife and I have been getting ready to take advantage of the inevitable, similar to you.. We transferred the bulk of our go-time money to high liquidity investments to gobble up properties. There are 6 million people right now not paying their monthly mortgages. Eviction restrictions are propping up the real estate market right now. Once those restrictions end, you'll see a collapse similar to 2008.
 
clodhopper said:
I dont disagree with your math. I fully understand what you are wanting to do. The risk is your income increase will lag the market (cost). Depending on the lag, you may find you need your cash to stay afloat paying bills. In this situation, having the cash in hand helps as hard assets are likely hard to liquidate fast enough to cover the difference between cost and income. But that might be the reason to make hard changes financially rather than be tempted to dip into cash. The main reason I sit on the asset side of things is the potential for an end to USD and intro some new currency will really jam it in to cash holders and less a problem for asset holders. I spent enough years talking to people who lived through the depression to compare how some did well and others lost it all. The one thing I learned was a bucket of cash can turn into nuthin pretty quick.
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I was using hyperbole.

Im doing a few things. Cash, hedge assets, and (exhaustively searching to) purchase rental w/high downturn occupancy rate, while reducing assets that'll take the hit on a housing correction as utilization for better personal/ business advantages.

People dont realize how truly little they need to be happy, provide a happy childhood to their children, and how quickly being accustomed to luxuries can be your downfall. It's good to visit luxury, keep poverty as you neighbor, and remain grounded in knowing itll all be torn from you one day.

Kind of a hedonist approach on steroids. grandparents i grew up with/ raised me/ passed me around as if joint custody during my youth, grew up in the depression (born 1915-27), my wife grew up during the Bosnian war (spent a few years 'camping' as she says), all we know/ learned/ taught was self reliance, ignore the out side, and how few ingredients you needed to make a hearty meal that could be stretched and repurposed for a week.

When my grandparents died in 07,I cleaned out a pallet of surge....and drank that for about or so
 
Thunderer said:
Finance property at an interest rate lower than inflation, or gold. Gold has historically been the benchmark against inflation. An ounce of gold in the late 1800's would buy a nice suit. Same holds true today.



My wife and I have been getting ready to take advantage of the inevitable, similar to you.. We transferred the bulk of our go-time money to high liquidity investments to gobble up properties. There are 6 million people right now not paying their monthly mortgages. Eviction restrictions are propping up the real estate market right now. Once those restrictions end, you'll see a collapse similar to 2008.
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Source on 6m? Cross referencing
 
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