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stu, can you see the P/E graph I uploaded on post #29? its not a big picture,
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It will get much worse. Businesses making profits? Businesses aren’t making profits, and this is 1 of the reasons we have inflation. You have congress trying to force everybody to make $15-$20 an hour for a job a robot can do. You have congress forcing more taxes on businesses because congress is on a worthless spending spree. You have high costs for shipping (diesel is still $5 a gallon). Businesses will pass on all of these new costs and add to their price of their goods. You think Burger King and McDonald’s can still afford to all a $1 hamburger when they have to pay 2x the salaries than 18 months ago? Now, you will see businesses and corporations start laying people off. You will see gas rise again, rents going up, interest rates are over 6% now, soon to be close to 7% or higher.
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My Father always said "it's not a problem if you don't eat or drive".
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The CPI was expected to drop by 0.1%, but instead rose by 0.1%. Sounds like a minimal change, but enough to drop the Dow by 1300. |
With oil declining from peak, there will be less inflation pressure on goods, however, labor inflation lags goods / rent inflation and now we are seeing the effects of labor inflation, and the only way to reduce labor inflation is to reduce job growth, which when due to a pandemic and those in their 60's retiring early, results in a labor shortage, means that the Fed may have to follow the Volker formula, and many are betting that won't happen. . .
Just remember that your house is NOT an investment. there is no revenue generated by it and there are only expenses associated with it. a car is also not an investment, just future junk. And in the villages, houses can come close to future junk with no wills/trusts, etc |
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If you can only invest $6000, even at 5% interest (haven’t seen that high a rate in years), you would only get $300. And is that just interest that is tax free or is it capital gains and dividends? |
Municipal Bonds
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You're penalized for good, successful decisions in our country.
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Plus, the 4 to 5 months needed just to pay taxes. |
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Will raising rates end inflation? That's the only thing the FED is willing to do, but that's not the real solution. The real solution is to STOP PRINTING FAKE MONEY. In fact, in the history of the world, the only thing that's ever solved 50% inflation is to ISSUE A NEW CURRENCY and then DON'T INFLATE IT. Yes, raising the rate the FED charges banks for their fake money, discourages banks from taking it, but not enough to convince them to quit paying the FED and start paying YOU. THAT would allow a real "soft landing", by attracting REAL INVESTMENT. Or, at least it would, if inflation wasn't already at these astronomic levels. At this point, I don't see any solution. Mortgage rates are now over 6%. Is your savings account making any more than it was a year ago? There's your clue. For the 100 years prior to the 2008 crash, when Obama effectively nationalized the banking system, you could get 4.25% in any passbook savings account, through inflation, depression, recession, and what-have you. The banks WANTED and NEEDED your money. Now they don't. How do we recover from a banking system that doesn't want investment from the real economy? |
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