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In my opinion inflation is very high (I don't believe the fake government numbers of almost zero inflation because I can see it with my own eyes, prices are rising very fast!).
The government reported inflation is a calculated increase in the overall price level, as approximated by a "market basket" of goods and services.
For any individual, their "personal inflation rate" can be vastly different, as you have experienced, because your personal "market basket" of what you personally purchase is different from the "market basket" used to calculate the CPI.
Given the nature of averages, while you experience a very high "personal" inflation rate, there will be others who experience a low "personal" inflation rate based on their own unique market basket of goods and services.
Subprime wasn't the problem. It was variations of no-doc loans, negative amortizing loans, strange adjustable rates, teaser loans. Subprime is way too wide to label the problem
Liar loans, no-doc loans, negative amortizing loans, strange adjustable rates, teaser loans and the like were not the root cause. They were reactions to the root cause.
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Quote:
Originally Posted by SportyandMisty
The government reported inflation is a calculated increase in the overall price level, as approximated by a "market basket" of goods and services.
For any individual, their "personal inflation rate" can be vastly different, as you have experienced, because your personal "market basket" of what you personally purchase is different from the "market basket" used to calculate the CPI.
Given the nature of averages, while you experience a very high "personal" inflation rate, there will be others who experience a low "personal" inflation rate based on their own unique market basket of goods and services.
Yes, scary inflation if they would target sectors such as:
1) minimum wage workers in cities where minimum wages have dramatically increased! (Much higher rents, much fewer hours)
2) pre-age 65 retirees without pension or healthcare. My property tax and health insurance EACH increased 1000%. (3 days worth of taxes, or HC premiums are more than 1 month food budget for 2)
Many other situations where inflation is there, but not evident in stats.
It's hear folks. Government gets involved, it gets worse.
Yes, scary inflation if they would target sectors such as:
1) minimum wage workers in cities where minimum wages have dramatically increased! (Much higher rents, much fewer hours)
2) pre-age 65 retirees without pension or healthcare. My property tax and health insurance EACH increased 1000%. (3 days worth of taxes, or HC premiums are more than 1 month food budget for 2)
Many other situations where inflation is there, but not evident in stats.
It's hear folks. Government gets involved, it gets worse.
I'm with you. I, too, am a pre-65 retiree with neither a pension nor an employer-sponsored retiree health care. I'm paying $1100 per month now compared to peanuts while I was employed. Of course, when I was employed, that health care expense was paid for by my employer on my behalf and was part of my total income; but when an employer pays it on my behalf, I don't feel the annual increases.
Many of us boomers have substantial wealth tied up in real estate. For many of us, the plan is to sell real estate & downsize, using the balance to help fund retirement.
However, that plan depends on younger buyers. What if those buyers can't fund the purchase of the boomers' real estate?
We have a curse of buying high and selling low. We just refinanced our mortgage, and after some major improvements, our house appraised at $1000 less than we paid 6 years ago.
This, in a city with very healthy growth. I don't get it.
Many of us boomers have substantial wealth tied up in real estate. For many of us, the plan is to sell real estate & downsize, using the balance to help fund retirement.
However, that plan depends on younger buyers. What if those buyers can't fund the purchase of the boomers' real estate?
Lots of people thought boomers would be downsizing in droves, but it hasn't happened yet.
Turns out boomers love to live in their large and paid for homes where they have room for other family members to live if needed.
Instead of selling, they could take out reverse mortgages if they need money, but what I am seeing is family moving back in, taking care of elderly and then keeping the house for themselves.
Quote:
A new study by the Bipartisan Policy Center predicts 38 percent of Boomers aren’t planning on moving at all. As for downsizing, the BPC reported that between 2011 and 2013, the average number of rooms per home increased, both for all Boomers and for younger Boomers born between 1956 and 1965.
I don't think there is a nation-wide US property bubble like in the mid 00s, but some localized ones mostly on the west coast. There is a global property bubble though, from the reaction of central banks to the 2008 crisis. China's property bubble is probably the largest bubble in the history of human civilization, There are also serious bubbles in Canada, Australia, Sweden, Norway, Switzerland, NZ, and some SE Asian nations. I wouldn't be surprised if most of them popped simultaneously in the next downturn like the US/Spanish/Greek/Irish/Icelandic/Baltic bubbles did in 2008, or the Japanese/German/Swiss/Swedish/Finnish/US west coast ones did in 1990.
Lots of people thought boomers would be downsizing in droves, but it hasn't happened yet.
I guess it depends where you live. Las Vegas, for example, is a retirement destination. We have tons of Boomers relocating in their retirement. It isn't for everyone, of course. The advantages include no state income tax, low housing prices, low general cost of living, and tons of entertainment. The downside includes summertime heat, summertime heat, and summertime heat, among other things.
Retired boomers move here in droves.
At any rate, it is still a bit early for the downsizing trend. Take a boomer born in, say, 1950. Right now they are only 66 years old - still middle aged. That's still pretty young. Give it another 10 years. When they are 76, they will probably want to downsize.
Quote:
Originally Posted by High Altitude
Turns out boomers love to live in their large and paid for homes where they have room for other family members to live if needed.
True, but other boomers enjoy moving from the big paid-for house to the paid-for lock-and-leave luxury condo so they can take 100 day cruises.
Quote:
Originally Posted by High Altitude
Instead of selling, they could take out reverse mortgages if they need money, but what I am seeing is family moving back in, taking care of elderly and then keeping the house for themselves.
Yes, of course. I think that's another practical option.
Many of us boomers have substantial wealth tied up in real estate. For many of us, the plan is to sell real estate & downsize, using the balance to help fund retirement.
However, that plan depends on younger buyers. What if those buyers can't fund the purchase of the boomers' real estate?
If this happens, then prices will adjust to where the younger buyers can afford. I think this is why, in part, some of the rust belt markets have not recovered and may never. There aren't that many younger buyers and the ones left have on average much lower wages.
On the other hand, this hasn't been an issue in the hot coastal markets or the growing sunbelt cities because demand is keeping up with or outpacing supply.
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