DawgTalkers.net Forums DawgTalk Palus Politicus Sigh…the economy... Part 2

A volatile stock market is one thing, inflation hits us all where it hurts with every dollar we spend.

I'm the type of investor that has no problem sacrificing upside with a suitable "hedge" against the negative... nothing ever wrong with profit.

How do you hedge against inflation?

There are plenty of complicated ways, here's a no-brainer move for anyone with over $25.


IBONDS:

Protect the value of your cash from inflation.

Are risk free and guaranteed by the government

Are paying a record 9.62% through October.


The catch:

Investment limit is 10,000 per person per calendar year.

Money is locked for 1 year.

Withdrawal during first five years costs you the previous three months interest. Although this is a 30 year bond, there is no penalty for withdrawal after 5 years.


Bottom line:

9.62% destroys any savings rate.

Inflation isn't going away over night.

After a year, you simply weigh the return (which is stated in advance every six months) and decide when you want to exit... Worst case scenario -- Inflation stops dead in it's tracks and they reset the rate to something like 1%... wait three months, sacrifice the 1% you made over the past three months and take your cash back.



https://clark.com/save-money/i-bonds/

https://treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm

thankfully i haven't raised rent on my tenants, but the complex owner up'ed the monthly maintenance fees at the beginning of the year, so it eating into the profits a bit. however, not a problem.

why? REITs, or Real Estate Investment Trust. i've got a portfolio based around REITs and equity capital companies. they pay quarterly and monthly, because REITs are mandated by law to give back 90% of their revenue back to the shareholders. that portfolio alone more than covered the fee increase on my units, and i'm just pouring more money into it, and then buying ETF's and individual stocks on the cheap.

the other portfolio is for pure growth. so i have all those quarterly dividends DRIP'd, and filled with emerging market and bond ETF's, as well as index ETF's. i'm only 34 so i dont care about market dips. just an incentive to buy more.

but literally anything besides a savings account is where the bread is. savings has emergency funds and thats it, not about lose value on so much cash every year like that.

that's why i stay trashing these dudes in this country so hard. here i am wanting to go out and grind, but the government said nah, so i have to make myself my own financial ecosystem.

so many jobs available, so many different ways to make money and earn passive income. i don't understand how any of these young men with no kids just aren't out here putting in work like that. i can't even imagine how much bread i could make if when i was 18, the economy was like this. i'd have two jobs easy, no college, stacking racks paycheck after paycheck.

yeah... things are about to get really bad if Secretary Janet Yellen is apologizing.



"I was wrong then about the path that inflation would take. As I mentioned, there have been unanticipated and large shocks to the economy [...] that I, at the time, didn't fully understand."

at least she owned it. we have elected officials who won't even acknowledge getting something wrong.

Nothing but communists and criminals in charge of the government.

Things are going just like they planned: Kill the middle class and wipe them off the face of the earth.

I'd rather they admit a mistake than lie about it, and I can see how they didn't anticipate all the crap that has come along to create this inflation being a rational explanation for the mistake. So we know what happened, and why, and now they need to figure out what can be done. But after the backlash on stimulus spending, all I see coming is austerity measures for the working class.

They didn't already exist. (the middle class)
In response to OldColddawg, final 5 of the last thread.
On the list of things the democrats don't know how to do is how to blame themselves for the disasterous results of their flawed thinking and thus policies.

You are right. Much of this was self inflicted with all the free money we were passing out...and probably still are when you get down to it.

If you and I have any disagreement is it might be on who we would call working class and what they do for a living. Some people might be making more money, but they are getting up and going to work just like everybody else. Mid-levels of management jobs are usually some of the first to be gutted.

When the guy or gal on the shop floor start getting cut, you can bet that many of those jobs in the middle floors of the corporate tower have been cleared out as well.

a lot of middle management workers are worried (i dont really care about their worries) because workers moving remote showed how useless a lot of them were. people who were able to keep their jobs while moving to remote schedule increased their productivity and got to spend more time with the family. middle management and some corporate executives are ticked only because their jobs became publicly useless and the half empty commercial properties are costing them money.

so there's that complexity when it comes to money, because for remote workers, yea goods overall went up in price, but they are no longer filling up once a week on gas to get to work everyday. going from filling up 4 times a week to 2 makes a difference, especially with the gas prices today.

i dunno if you and i share the same definition of working class, but i always thought of that as non-degree workers in industrial or manual labor jobs. that's a "sub-class" to middle class. sort of like how indie or metal is a subgenre of Rock music.

the working class are the main ones i'm worried about. they are getting hit in every direction imaginable, and the last couple of years with the pandemic has only made everything worse. not just domestically, but globally as well.

I guess I am more inclusive than you.

My point is you are wrong it is just one group hit by inflation.

Retired people such as myself are hit by inflation. You should care that all groups are hit. Everybody is paying the same new, higher prices for the same goods. Most of which has been self inflicted wounds. Well, at least as far as people who actually spend their own earned money of things like food and rent.

If we want to start talking about worthless jobs, maybe we should discuss all the things in this country that are worthless.

uhh, when did i ever say just one group is hit by inflation? i've reread my posts and couldn't find anything close to that.

fair enough...you said something about not being worried about people in the office and are most worried about people on the shop floor.

I worry about all of them.

i worry about anybody seriously affected by inflation. i'm simply talking about the middle management in the corporate environment when it comes specifically to working remote. that's my bad for not being specific on that. I don't consider managers at the warehouse middle management. i consider them part of the working class.

He was voted out in 2020

I actually agree with you that everyone is hit by inflation. What's hard to avoid understanding is that those working class people who make less, get hit harder than those who make more. If your wages already have you hovering at say 20 to 30 percent above the poverty level, it doesn't take nearly as much to put you at or below the poverty level.

That isn't meant to distract from those who make more. They have worked and fought their way up to making a better living and they're seeing that hard work being wiped away by inflation.

It's painful for everyone at all levels.

I am not stupid. I know if you have more money you have it easier, but you are still feeling it as much as anybody else.

You seem to be contradicting yourself in the same sentence. Either you feel it more when you can't afford to absorb the cost or you don't. "As much" would indicate to me that each are impacted and feeling it the same amount. Maybe I'm misunderstanding your intent here.

You are misunderstanding.

When I pay $4.20 per gallon for gas, I feel it as much as anyone else. Just because I might have some money left over at weeks end and someone else might not have much left doesn't mean I haven't felt inflation as much as anyone else. I just have more money. That doesn't have anything to do with inflation.

You're lucky. It's $4.89 here. I believe in Cali it's over $6.00.

I don't have a choice. I need gas to work. Just as trucking companies pass the increases off to customer's, I do as well - as much as i can, anyway. When things are priced too high, what do people do? Don't buy the product or service. In the end, all inflation gets passed down to the end consumer - and many are feeling it HARD right now, and all indications are it will get worse.

Thanks for helping clear that up for me.

I would strongly disagree. The impact of inflation is not suffered equally - because if you have disposable income remaining after you fill up - others don't. Some might not be able to fill up at $4.39 or whatever the price per gallon is. Some might have to choose between fuel or food.

Inflation increases everyone's cost of goods by the same % or dollar amount - that impact is far from equally felt. Taken to an extreme - the one percenters also pay more for everything, I doubt they even notice, there is certainly zero pain.

Yep. It's like you have a super-padded cup but you still feel the kick in the nuts, just not as bad.

I may not have been following all this, but that statement taken on it's own I think is ...
1= left over money, 2. = zero.
Then the inclusion of "as much as" ... by definition people with leftover money won't feel inflation as much as the broke.

If you really don't have what you need, it doesn't matter if it's a dozen donuts, or Le'bron James' house, if you truly can't afford the one, it might as well be the other. See, if you really can't afford the donuts, the donuts cost exactly the same as a Ferarri automobile, the amount of out of reach.

Well, there goes variety at the big retail chains. Bezos will make a fortune from this. And of course, the right will lay 100% of the blame on Biden, while dismissing all the crap that happened under Trump, Putin's war, and corporate price gouging that all took place pre-inflation. No way it's a market correction compounded by all those factors... no way.

trump has been out of office for one and a half years and Biden is 1/3 of the way through his presidency. stop blaming trump.

Do you realize how blind and lost you are in your hate for Trump?

It is really quite sad.

Keep propping up your "installed" leader while you are destroyed by his regimes policies!

Stop acting like this isn't the consequences of a long period of spending without paying your bills. This goes back before Biden, before Trump and before Obama. At some point the bills come due.

I don't like to brag about taking expensive trips, but I just back from the gas station.

Question...who did you blame for the 2008 financial crisis?

That one's easy. (Not full-fledged blame, but the move set the table)

In November 1999, President Bill Clinton publicly declared "the Glass–Steagall law is no longer appropriate". Some commentators have stated that the GLBA's repeal of the affiliation restrictions of the Glass–Steagall Act was an important cause of the financial crisis of 2007–2008.

It was also around the same time that administration allowed for and began to encourage all sorts of lending practices to ram through tons and tons of loans that never should have flown. Mortgages were being given with no proof of income at all and at federal insistance, Freddie & Fannie were underwriting them. The entire crash was a series of deliberate constructions.

As for the current economic status, we're just beginning to feel the pain.
Inflation affects governments, too.... costs go up, they need more money.

The state of Ohio has ordered the Medina County Auditor to increase property valuations for tax purposes by like 27%.

So, homeowners are about to get double-whammied by inflation.

Right. Under the guise of "every American deserves a home" (whether they can afford one or not).

I'm sure you posted in BIG FONT all when Trump's stockmarket rollercoaster was rolling through too... smh.

30,516.74 Dow Jones Industrial Average
-6,068.32 (-16.59%) year to date
-876.05 (-2.79%) today

https://www.google.com/search?q=dow...904j1j7&sourceid=chrome&ie=UTF-8

Post the numbers of losses that people who don't have a dime in stocks have taken over the last several years. The stock market is NOT the economy. How about the homeless? How about the people ravaged by covid? There are a lot of places to put your tears, but with 85% of stocks being owned by 1%ers, don't look for me to cry when they lose their gambling bets. And yeah, I get 401Ks are taking hits, it's still gambling. Let me know when the race track guarantees your bets, I'll go with you.

I'd also make a small wager that BIG money is being shifted into bonds, precious metals, and rare earth elements right now as a way to protect themselves from losses. That's probably contributing to this dip. Or it's an overdue correction spurred by wild inflation.