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Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,763,471 times
Reputation: 3587
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It doesn't matter whether it is currency inflation, oil inflation or supply and demand inflation because it still eats up the value of your savings. Already people don't save much and this will make people save even less.
What are savings? Even if a household eliminates discretionary and luxury spending how, on fixed or declining wages, can anyone afford to put money aside. Even if a household had extra income, why would they put it in a 2-3% saving account where the real value of the savings would continuously decrease and not appreciate. The ancient system of 3% savings and 5% mortgages died a long time ago. IMHO it was killed because the speculators wanted more money to play with and the Savings and Loan industry was ripe for the picking.
People used to save for a rainy day. With fixed incomes and continuous price inflation now is the rainy day. I do not see this getting any better until we stop wasting our money on an empire that is protecting foreign investors. We have to stop wasting money and talent on needless war and we must reinvest in our domestic energy infrastructure to stop bleeding our economy to pay for foreign oil. Where we will get the trillions need to wean us from the oil is the big question. The likeliest outcome is that the investment in domestic energy will not be made and our economy and populous will sink into poverty while our elites will continue to Gulfstream their way around the world oblivious to the suffering their policies have created.
Or we could have a revolution and start over.
"Even if a household had extra income, why would they put it in a 2-3% saving account where the real value of the savings would continuously decrease and not appreciate."
Ummmmmm....because it's better than not earning that 2/3% PLUS adding the inflationary rate to the loss?
Keep in mind, there are a whole s....load of people who are saving relatively low amounts of money that doesn't give them many better investment options.
It's easy to rant and rave over why and how we got here and promote whatever we 'should' as a nation be doing or should have done, but the ordinary guy on the street can only do what he can do.......and saving, even under the current dismal situation, is far better than buying a couple more X Boxes or a higher priced car.
How is one bullish on the stock market when the very currency it is demoninated in is slowly falling off a cliff?
On can be bullish in the stock market because a low dollar = higher exports. If your dealing with companies that export products, their sales are bound to go up.
6-12 months will will be able to buy short term CDs at 5.5% and up. My prediction......
I think you're right. That's why all the major banks right now are offering higher rates at longer terms. They're trying to lock us in at 3.5% for 5 years now so when the rates go up to 5+% in a year or so we'll have our money tied up at lower yields.
"Even if a household had extra income, why would they put it in a 2-3% saving account where the real value of the savings would continuously decrease and not appreciate."
Ummmmmm....because it's better than not earning that 2/3% PLUS adding the inflationary rate to the loss?
Keep in mind, there are a whole s....load of people who are saving relatively low amounts of money that doesn't give them many better investment options.
It's easy to rant and rave over why and how we got here and promote whatever we 'should' as a nation be doing or should have done, but the ordinary guy on the street can only do what he can do.......and saving, even under the current dismal situation, is far better than buying a couple more X Boxes or a higher priced car.
I've been putting any of my savings into either gold or silver (silver these days) for a while now. Saving paper is foolish in my opinion, though it is necessary to get a feel for the right time to make purchases (i.e., buy it as cheap as possible and don't get caught up in hype/bubbles as they're temporary). Current nickels and pre-1982 pennies are a cheaper way for those with less savings ability (or those of us who enjoy going into a bank and making a profit simply by exchanging fiat money for base metal coins). I'm holding onto them all for now, they're bound to be more valuable in the future. There is a lot of pressure in Congress for changing to steel pennies and nickels.
The rate of money supply growth during the Bush Administration has been less than the Clinton Administration.
Funny how many conversations on inflation never talk about the actual things that drive it - increases in money supply, credit etc.
Anyhow, inflation (in the real sense) is not going to get out of control. What is driving the current price increases has little to do with actual inflation. Even the CPI (which doesn't really measure inflation) hasn't gotten out of control, its only at 5%. What is driving the increase in CPI is fuel costs.
Funny how many conversations on inflation never talk about the actual things that drive it - increases in money supply, credit etc.
Anyhow, inflation (in the real sense) is not going to get out of control. What is driving the current price increases has little to do with actual inflation. Even the CPI (which doesn't really measure inflation) hasn't gotten out of control, its only at 5%. What is driving the increase in CPI is fuel costs.
Private reports peg M3 money supply growth well into double digit land, and even crossing that threshold just as the Fed conveniently stopped reporting it "to save money" in 2006.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,763,471 times
Reputation: 3587
I am quite scared of inflation. As I look at the choices in my Fidelity 401-K investments, I do not see anything with a large enough return to protect it from double digit inflation.
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