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

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MJ DeMarco

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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

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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

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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

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JunkBoxJoey_JBJ

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@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...
 
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Andreas Thiel

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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

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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

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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

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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.
 

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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?
 

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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

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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

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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!

FE904639-584B-401B-B317-8C4D8A317277.jpeg
 

thechosen1

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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

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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

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Also, Amazon inflation surcharge.

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

9818EAF2-AA40-4C43-9E58-6B1E731390A4.jpeg
 

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