Hyperinflation starting? What's happening in your area? Post your ground reports.

[Aditya Gunjal]

I am opting for learning to grow veggies in the backyard. It's like printing your own money.

Yeah and organic too.

 

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[MJ DeMarco]

Miami housing prices hit record high, UM students anxious - The Miami Hurricane

Supply chain disruptions, the continuing impacts of the C0VlD-19 pandemic and rising gas prices have significantly raised the cost of living across the country. In South Florida, these new costs are coupled with a steep increase in housing prices. In their Feb. 2022 rental report, Realtor.com...

www.themiamihurricane.com

Within the last year, the price of purchasing a single-family home has increased by almost 30% and the price of monthly rent has increased by 58%.

Couple of takeaways... A) Your government is lying about real inflation numbers (gee, really?) especially when it housing and shelter is a human's biggest expense. A 58% increase in bread or milk, is not the same as a 58% increase for a roof over your head. and B) Looks like owning real estate with rental income has inflation protection.

 

[farmer79]

Miami housing prices hit record high, UM students anxious - The Miami Hurricane

Supply chain disruptions, the continuing impacts of the C0VlD-19 pandemic and rising gas prices have significantly raised the cost of living across the country. In South Florida, these new costs are coupled with a steep increase in housing prices. In their Feb. 2022 rental report, Realtor.com...

www.themiamihurricane.com

Couple of takeaways... A) Your government is lying about real inflation numbers (gee, really?) especially when it housing and shelter is a human's biggest expense. A 58% increase in bread or milk, is not the same as a 58% increase for a roof over your head. and B) Looks like owning real estate with rental income has inflation protection.

This is a long term trend I think. Institutional money flowing into all areas of the housing market including single family dwellings. It will be harder for the average Joe to buy a home and the rents will essentially be pegged to inflation+expenses. Never a better time to leave the Rat Race, if only someone would write a book about it.

 

[MJ DeMarco]

Not sure if this should go here, or in the Stock Market Chat thread, but either would work...

Target reported disastrous earnings, basically due to inflation that was not properly passed on to consumers. All retail stocks are taking a bath this morning on stock prices.

Think prices are high in the store? You ain't seen nothing yet!

Stock is down 25%, the most since October of 1987. (And we know what happened in that month).

 

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[MJ DeMarco]

UK's inflation rate hits 40 year high...

MSN

 

[JunkBoxJoey_JBJ]

@MJ DeMarco I know you talk about owning your home outright, owning some bonds and being clear of any debt ...but with this particular temperature of things have your thoughts shifted on anything?

Example(s); Own a home now, sell high and keep the cash, calculating rent for 2 years and see where things land? Or buy an exisiting business and/or property (actually accumulate some debt) ...Or buy more bonds or I-bonds when others are fearful? Or buy the 1985 Mustang 5.0, hahaha...

Obviously very difficult as know one knows what will happened but I think today it became even more interesting...

 

[YanC]

New Zealand found how to deal with inflation... Let's go BRRRRR again baby !

New Zealand Plans to Spend NZ$1 Billion to Ease Inflation Pain​

• Finance minister announces temporary stimulus in annual budget
• Treasury projects economic slowdown as borrowing costs bite

 

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[Andreas Thiel]

Talked to colleagues who have recently bought houses and it seems - at least in Germany in more rural areas, prices are starting to come down again because there are no buyers at the current mortgage rates above 3%. I would't bet on runaway inflation in the sense that prices will just go up and somebody will buy at these elevated prices. Economic activity will probably slow down significantly and companies will have to scale down. Those who could afford to buy at the high prices are very likely to understand that a bubble is currently deflating and they'll wait for a firesale.

 

[Yogi_Fastlane]

Inflation is high in India as well, Govt says it's around 6%, and wholesale inflation (food) is around 15% as per official data.

In cities, food price is 1.5X of what it was pre-covid, Real estate has been a bubble but during C0VlD-19, prices were slashed, however Govt estimates for properties (based on tax) are higher than the developer themselves, so can't blame them, commodity prices have increased from Steel, Oil, Copper.

 

[MJ DeMarco]

I know you talk about owning your home outright, owning some bonds and being clear of any debt ...but with this particular temperature of things have your thoughts shifted on anything?

I don't own my home outright, I put 66% down and took a loan at cheap money, 2.25%. I did that because of the inflation prognosis. Safe to say I got an interest rate perfectly picked at the rate bottom.

As for my temperature on things, I'm having solar panels installed on my home, inflation was a concern there. But overall, I'm a big believer in hard assets and things that can float with inflationary issues... that means business assets, rental real estate assets, and other tangible goods. Inflation was a big reason why I spent more on a home than I originally budgeted -- I needed to get out of cash. I'd rather have $5.5M in bricks, wood, drywall, and land, than $5.5M in a Federal Money Market. The utility of having cash VS having cash invested in something with daily utility is a no-brainer for me, especially as am at the back third of my life.

 

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[farmer79]

So something very interesting and I don’t know if it belongs in the inflation thread but thought I would put it here as it is a government/supply chain issue.

So I farm in Saskatchewan(Canada) and one of our tractors is a John Deere. We were having some issues with engines alerts that didn’t makes sense and the emissions system. The dealership has figured it is the ECU (Engine Control Unit) sort of the electronic brain of the engine. So our dealer didn’t have one in stock so they ordered one (i assume directly from John Deere, but I didn’t actually ask.)from the US. It was supposed to be here today and I got a call from the service manager that it is held up at the border. According to him they are now required to show some sort of proof to US customs that there is an actual tractor that requires this part not an attempt at the dealership to hoard parts. This is unbelievable and a sign that we seem to be devolving into a 1980’s Soviet Union style economy. Very concerning.

PS There is also the possibility that the dealership made a mistake and is telling me a tale to justify why the part is late. But I don’t think that is the case.

 

[Antifragile]

we seem to be devolving into a 1980’s Soviet Union style economy.

In Soviet Russia, the ECU part would be ordering you.

Yes, sounds like dealership / stealership may be making something up?

 

[Guest-5ty5s4]

So something very interesting and I don’t know if it belongs in the inflation thread but thought I would put it here as it is a government/supply chain issue.

So I farm in Saskatchewan(Canada) and one of our tractors is a John Deere. We were having some issues with engines alerts that didn’t makes sense and the emissions system. The dealership has figured it is the ECU (Engine Control Unit) sort of the electronic brain of the engine. So our dealer didn’t have one in stock so they ordered one (i assume directly from John Deere, but I didn’t actually ask.)from the US. It was supposed to be here today and I got a call from the service manager that it is held up at the border. According to him they are now required to show some sort of proof to US customs that there is an actual tractor that requires this part not an attempt at the dealership to hoard parts. This is unbelievable and a sign that we seem to be devolving into a 1980’s Soviet Union style economy. Very concerning.

PS There is also the possibility that the dealership made a mistake and is telling me a tale to justify why the part is late. But I don’t think that is the case.

Comrade, your government is now rationing ... tractor parts.

Sick. Welcome to the world not of abundance, but of scarcity. Everything they touch turns to loss.

What's the opposite of excess? It's poverty, not "just enough."

 

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[MJ DeMarco]

Ever notice whenever there are price changes for items you use, it is never at or near the stated inflation rate? But always double or triple?

Government: Inflation is 6%!
Me: Then why has X, Y, and Z gone up 18%?

 

[biophase]

Ever notice whenever there are price changes for items you use, it is never at or near the stated inflation rate? But always double or triple?

Government: Inflation is 6%!
Me: Then why has X, Y, and Z gone up 18%?

Price for Chipotle bowl with double meat and guacamole!

 

[Guest-5ty5s4]

The political class really seems to be doing everything it can to keep inflation going higher and higher. More spending, more stimulus, "forgiving" debt, printing billions to send to other countries, what else can they do to make the situation worse?

 

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[CaptainAmerica]

It's the little things:
Sneakers, while holding their price... are unavailable in the color and size I want. The cost to adopt a dog went up 20% in the last 6 months. My favorite Italian pesto is unobtainable, unless I know someone traveling to Europe. First world problems, yes. But also, part of a trend.

 

[biophase]

Also, Amazon inflation surcharge.

Increases my fees by $.15 per unit. Drops my profit by $40k!!!! Do I raise my prices $.15?

 

[msufan]

Also, Amazon inflation surcharge.

Increases my fees by $.15 per unit. Drops my profit by $40k!!!! Do I raise my prices $.15?

View attachment 43571

I think the answer is yes, you do raise your prices 15 cents. It would be expected in this environment.

 

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[Aditya Gunjal]

Ever notice whenever there are price changes for items you use, it is never at or near the stated inflation rate? But always double or triple?

Government: Inflation is 6%!
Me: Then why has X, Y, and Z gone up 18%?

I think they average the rate of inflation? Sorry if i am wrong but sir government cant tell us inflation on each product so they might just average it and display it to us.

 

[biophase]

I think the answer is yes, you do raise your prices 15 cents. It would be expected in this environment.

It's kind of hard to go from $19.99 to $20.14. There's always that ceiling that you try to stay under.

 

[GIlman]

Ever notice whenever there are price changes for items you use, it is never at or near the stated inflation rate? But always double or triple?

Government: Inflation is 6%!
Me: Then why has X, Y, and Z gone up 18%?

The government numbers have been a lie since the 1980's. The problem is that the government started using inflation measurements to create a target, which results in the metric being manipulated so the number gives the target the government wants. This is called Goodhart's Law. Goodhart's law - Wikipedia

I do not personally pay any attention to official government data like the CPI, because the calculation is constantly being manipulated. Instead I use the shadow stats site which calculates current inflation and other parameters based on the historical methods from when these metrics were established.

Alternate Inflation Charts

www.shadowstats.com

Based on shadow stats, current inflation is about 17-18% if calculated using 1980's methods. This seems to be more in line with the real world experience that I am seeing.

Remember that inflation data is presented year over year, so since 2020 cumulative inflation is well over 25-30% according to shadow stats.

Another worrying thing to me, based on shadow stats, is that GDP has been negative since 2020. To me when I look at this there is a significant chance that this is the lead point of a prolonged financial depression. I sure hope not, but it's hard for me to look at the current state of the economy, true unemployment, and other factors and not see that we are on the precipice of something possibly on order of the great depression.

For the first time in my life, at the beginning of end of April I 100% devested from all my stocks at went 100% to cash, there is just too much risk in the market at the moment for me. I could easily miss out on some bump, but at least I'm protected on the downside which I think really is the bigger risk at the moment. I am still trading options and also dabbling in commodities futures cautiously (since this is new territory to me), but I'm able to play both directions of the market with options and can profit from inflation with commodity futures.

 

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[msufan]

It's kind of hard to go from $19.99 to $20.14. There's always that ceiling that you try to stay under.

this is true -- good call

 

[msufan]

The government numbers have been a lie since the 1980's. The problem is that the government started using inflation measurements to create a target, which results in the metric being manipulated so the number gives the target the government wants. This is called Goodhart's Law. Goodhart's law - Wikipedia

I do not personally pay any attention to official government data like the CPI, because the calculation is constantly being manipulated. Instead I use the shadow stats site which calculates current inflation and other parameters based on the historical methods from when these metrics were established.

Alternate Inflation Charts

www.shadowstats.com

Based on shadow stats, current inflation is about 17-18% if calculated using 1980's methods. This seems to be more in line with the real world experience that I am seeing.

Remember that inflation data is presented year over year, so since 2020 cumulative inflation is well over 25-30% according to shadow stats.

Another worrying thing to me, based on shadow stats, is that GDP has been negative since 2020. To me when I look at this there is a significant chance that this is the lead point of a prolonged financial depression. I sure hope not, but it's hard for me to look at the current state of the economy, true unemployment, and other factors and not see that we are on the precipice of something possibly on order of the great depression.

For the first time in my life, at the beginning of end of April I 100% devested from all my stocks at went 100% to cash, there is just too much risk in the market at the moment for me. I could easily miss out on some bump, but at least I'm protected on the downside which I think really is the bigger risk at the moment. I am still trading options and also dabbling in commodities futures cautiously (since this is new territory to me), but I'm able to play both directions of the market with options and can profit from inflation with commodity futures.

Great post. I just can't see how people will make it when costs have gone up 25-30% over the past two years. Stimulus payments and the like bailed people out for a time, but it sure feels like a massive crisis is coming. My concern is that people won't just tighten their belts in a healthy way, but that they will look to the government to bail them out again, exacerbating the problem.

 

[JordanK]

Inflation hitting me where it hurts :'(

 

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[Ing]

I think the answer is yes, you do raise your prices 15 cents. It would be expected in this environment.

Wouldn’t it meet the requirements to rise ,45?
You could rise 19,90 to 23,99 and give a 10% inflation support discount!

 

[RicardoGrande]

Any other SMBs or freelanders having a tough time mentally dealing with the controlled implosion of the economy?

Sure the money is hyperinflating, but the supply chain issues coupled with the market starting to grind to a halt is making a lot of the SMB owners I've reached out to rather non-commital about doing business.
I had a simple yet robust system to planned out to be able to take my web design full time over the summer, with the way the sphincter of the market tightened these past two weeks, it looks like I'll have to triple my effort just to see the same touchbacks I was seeing in march. Not the easiest thing to handle considering my dayjob eats up my valuable time in a saturnian way

I suppose this is just a challenge to develop better outreach and better value propositions, more opportunity to overdeliver; just wonder why all this adversity had to happen now, and for almost no reason except a TON of poor governmental decisions coming to a head this year.

Grain futures are still skyrocketing, started stocking up on cans of food in march and have a canner coming in. At the very least, I have 170 cans of sardines and tuna for the fall famine

 

[MJ DeMarco]

Couple Plans to Spend Their Retirement Years on Cruise Ships Because It's Cheaper Than a Mortgage

Richard and Angelyn Burk of Seattle say they've spent the past year living on cruise ships, and have no intentions of ever returning to their land home.

www.complex.com

Something is seriously wrong with the economy when you can live on a cruise ship as an alternative... but yea, if everything keeps skyrocketing, from food, to insurance, to taxes, why not.

 

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[Andy Black]

Any other SMBs or freelanders having a tough time mentally dealing with the controlled implosion of the economy?

Sure the money is hyperinflating, but the supply chain issues coupled with the market starting to grind to a halt is making a lot of the SMB owners I've reached out to rather non-commital about doing business.
I had a simple yet robust system to planned out to be able to take my web design full time over the summer, with the way the sphincter of the market tightened these past two weeks, it looks like I'll have to triple my effort just to see the same touchbacks I was seeing in march. Not the easiest thing to handle considering my dayjob eats up my valuable time in a saturnian way

I suppose this is just a challenge to develop better outreach and better value propositions, more opportunity to overdeliver; just wonder why all this adversity had to happen now, and for almost no reason except a TON of poor governmental decisions coming to a head this year.

Grain futures are still skyrocketing, started stocking up on cans of food in march and have a canner coming in. At the very least, I have 170 cans of sardines and tuna for the fall famine

Which businesses will want or need more from their website when people tighten their belts?

Which businesses will thrive when people tighten their belts?

 

[Andy Black]

Couple Plans to Spend Their Retirement Years on Cruise Ships Because It's Cheaper Than a Mortgage

Richard and Angelyn Burk of Seattle say they've spent the past year living on cruise ships, and have no intentions of ever returning to their land home.

www.complex.com

Something is seriously wrong with the economy when you can live on a cruise ship as an alternative... but yea, if everything keeps skyrocketing, from food, to insurance, to taxes, why not.

I’d rather live in a VW camper van and be able to get away from the maddening crowds!