Inflation: How much for real?

Baron said:
It's amazing to me how many wealthy business people there are that have no idea what inflation is and how it impacts them. One of my buddies has a 76-foot yacht down in Ft. Lauderdale and I went down there this past weekend to have fun with a group of my friends. We got into an economic discussion and the topic of inflation came up. He said he just didn't understand Bitcoin and more broadly why anyone would ever want to keep their money in anything but U.S. dollars. I explained to him the dangers of rampant money printing and the effect that has on escalating inflation and the dollar.

Then he said, "Yeah I always hear all that but it never seems to impact the number of dollars I have in the bank, so why should I care?" It was only until I told him, "It's not that your dollars disappear. It's that your purchasing power with those dollars goes down. You want to buy a house here in Orlando? That same house was 20% cheaper last year. And no matter where you look these days, things are just more expensive across the board. So it's not that your dollars disappear in the bank, it's that you need more of those dollars just to buy the same things you bought last year. Now what if money printing continues like that for the next couple of years? That same house will now be 40% - 60% more expensive that it was when you deposited your money in the bank a few years ago. Your purchasing power is literally going down the drain by the day." And that's when his "Aha moment" finally happened. He's a successful land developer and that's all he's ever really focused on. So the concept of what happens to the purchasing power of his money after he sells some lots and puts that money in the bank was something he had never even thought of.
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The rich also, have tangible assets like expensive cars, gold, mansions, yachts, diamonds, etc which will hold its value. Even a used yacht would fetch a higher value. And if they have businesses that generate income, that income will continue to come in at a faster pace than most average Americans earn their monies. That is why the rich do not worry. They can also, move places for the tax advantages that they can reap.
 
Baron said:
It's amazing to me how many wealthy business people there are that have no idea what inflation is and how it impacts them. One of my buddies has a 76-foot yacht down in Ft. Lauderdale and I went down there this past weekend to have fun with a group of my friends. We got into an economic discussion and the topic of inflation came up. He said he just didn't understand Bitcoin and more broadly why anyone would ever want to keep their money in anything but U.S. dollars. I explained to him the dangers of rampant money printing and the effect that has on escalating inflation and the dollar.

Then he said, "Yeah I always hear all that but it never seems to impact the number of dollars I have in the bank, so why should I care?" It was only until I told him, "It's not that your dollars disappear. It's that your purchasing power with those dollars goes down. You want to buy a house here in Orlando? That same house was 20% cheaper last year. And no matter where you look these days, things are just more expensive across the board. So it's not that your dollars disappear in the bank, it's that you need more of those dollars just to buy the same things you bought last year. Now what if money printing continues like that for the next couple of years? That same house will now be 40% - 60% more expensive that it was when you deposited your money in the bank a few years ago. Your purchasing power is literally going down the drain by the day." And that's when his "Aha moment" finally happened. He's a successful land developer and that's all he's ever really focused on. So the concept of what happens to the purchasing power of his money after he sells some lots and puts that money in the bank was something he had never even thought of.
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imagine owning a 76' yacht but not understanding fluctuations in a currency's purchasing power...fuck im doing it all backwards.
 
Until logsitics cost come down inflation will be real for quite some time.... 2022 will still have elevated freight rates and trucking costs and if they come down a bit in 2022 retailers and vendors will still keep prices up a bit to make up for lot of money lost in 2021 when rates spiked and they had to eat a lot of logistics costs.
 
piezone should be here any minute now to straighten us on our naive quaint thinking that deficit and especially debt really does matter.

He says it is all just numbers and as long as debt/gdp ratio doesn't get above 10 zillion to one or some such we are ok.
 
Baron said:
It's amazing to me how many wealthy business people there are that have no idea what inflation is and how it impacts them. One of my buddies has a 76-foot yacht down in Ft. Lauderdale and I went down there this past weekend to have fun with a group of my friends. We got into an economic discussion and the topic of inflation came up. He said he just didn't understand Bitcoin and more broadly why anyone would ever want to keep their money in anything but U.S. dollars. I explained to him the dangers of rampant money printing and the effect that has on escalating inflation and the dollar.

Then he said, "Yeah I always hear all that but it never seems to impact the number of dollars I have in the bank, so why should I care?" It was only until I told him, "It's not that your dollars disappear. It's that your purchasing power with those dollars goes down. You want to buy a house here in Orlando? That same house was 20% cheaper last year. And no matter where you look these days, things are just more expensive across the board. So it's not that your dollars disappear in the bank, it's that you need more of those dollars just to buy the same things you bought last year. Now what if money printing continues like that for the next couple of years? That same house will now be 40% - 60% more expensive that it was when you deposited your money in the bank a few years ago. Your purchasing power is literally going down the drain by the day." And that's when his "Aha moment" finally happened. He's a successful land developer and that's all he's ever really focused on. So the concept of what happens to the purchasing power of his money after he sells some lots and puts that money in the bank was something he had never even thought of.
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Raising taxes is extremely unpopular. Prining a ton of money for whatever governmental projects you want to fund is the secret way to raise taxes without raising taxes. Now you dont have to see the federal government is taking 10% more out of your paycheck.

Your political opponent cannot throw the scarlet letter at you of taking people's wages through higher taxes. Sure they can say you are printing money and reducing the buying power of the citizenry, but that goes right over most people's heads. To them it's a boring talking point that gets plucked from some arbitrary list of talking points people dont care about. In actuality its detrimental, but to the person hearing it they only care about the normal amount they see on their biweekly paycheck, and that amount is still the same so in their minds nothing has changed.

Instead they are dying the death of a thousand cuts. They dont notice the bread is 15 cents more or the can of peas is 8 cents more, and that's what the political establishment is banking on, and they are right.

Wait until the dollar ceases to become the world currency, because that is where we are headed.
 
ElCubano said:
The most insane thing is USED CARS have gone up. USED CARS never go up and only depreciate. Unless of course its a classic car etc.
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used cars are up because demand for new auto is high and supply low due to chip shortages. Not surprising most of the items seeing the biggest issue are supply chain or re-open related.
Housing demand up due to record low APR's? No surprise.
Gas up after plunge in price of oil on shutdown demand? No surprise

Yes, high demand with short supply also creates inflation.
 
And demand is up, not just because supply can't satisfy it, but because there is plenty of money "floating" around.

Gubmint and market supplied money - stimmy/QEternity and appreciating stock market, crypto and real estate bubble assets.
 
Besides the negative on money printing, there is also a big positive. What governments basically do is printing whenever a ‘disaster ‘ strikes, thereby softening the potential dip which would occur otherwise. It’s basically roaming a little money from everyone and thereby over ovecoming a big recession with social unrest ( which also comes at a cost).
We ( and other people with wealth) have to stay away from holding wealth in fiat money.
 
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