[CoachKandSportsguy]

stu, can you see the P/E graph I uploaded on post #29? its not a big picture,

[rsmurano]

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.

[dewilson58]

Originally Posted by CoachKandSportsguy

stu, can you see the P/E graph I uploaded on post #29? its not a big picture,

I ain't from NY (thank God), but I can not see your chart.

[RiderOnTheStorm]

Originally Posted by Rainger99

Inflation is still high - it was 8.5% in July and it was 8.3% in August.

I saw one article that said if you exclude food and gas, inflation was "only" 6.3%. However, I don't know why you would exclude two items that are necessary to survive. Maybe you could exclude entertainment or travel - which are more discretionary spending than food and gas.

Without wishing to make matters seem worse, you could think of an 8.3% level of inflation as the need to work one month out of the year for no income. Kinda puts things into perspective.

[Wilharm]

My Father always said "it's not a problem if you don't eat or drive".

[rustyp]

Originally Posted by CoachKandSportsguy

Except that the market is still higher than 9/6, 7 day ago? so in reality, you only lost the prior 4 days of gain, so in reality just really close points in time of a bunch of ups and down in that example. so in reality, its all about how far down you are from the peak, where you should have been 0 % invested in equity

which is why you buy low and sell some or all when you have lots more than say 20% annual gain in any equity. . . that way you keep your gains, and money compounds very well at 20%

stock market candles guy

And likewise the market is down greater than 10% from exactly one year ago. Now add to the loss 8-9% inflation rate and the hole is beginning to develop an echo.

[MandoMan]

Originally Posted by Rainger99

Inflation is still high - it was 8.5% in July and it was 8.3% in August.

I saw one article that said if you exclude food and gas, inflation was "only" 6.3%. However, I don't know why you would exclude two items that are necessary to survive. Maybe you could exclude entertainment or travel - which are more discretionary spending than food and gas.

Just so people understand, that does NOT mean that prices increased another 8.3% in August. It means the rate of inflation for the total year so far (!) DECREASED from 8.5% to 8.3%. For the total for EIGHT MONTHS to drop 0.2%, prices in August had to drop approximately that amount times eight, or 1.6%. The Federal Reserve Bank had hoped that raising interest rates last month would cause even more of a decline, but it hasn’t yet. Meanwhile, gas prices are back to where they were from 2011-2015, just before a gas glut lowered prices so much that lots of oil wells were closed and fracking decreased a lot. That was an unusual situation, and while it was good for us, it was not good for oil companies.

[golfing eagles]

Originally Posted by MandoMan

Just so people understand, that does NOT mean that prices increased another 8.3% in August. It means the rate of inflation for the total year so far (!) DECREASED from 8.5% to 8.3%. For the total for EIGHT MONTHS to drop 0.2%, prices in August had to drop approximately that amount times eight, or 1.6%. The Federal Reserve Bank had hoped that raising interest rates last month would cause even more of a decline, but it hasn’t yet. Meanwhile, gas prices are back to where they were from 2011-2015, just before a gas glut lowered prices so much that lots of oil wells were closed and fracking decreased a lot. That was an unusual situation, and while it was good for us, it was not good for oil companies.

Not quite.

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.

[CoachKandSportsguy]

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

[Rainger99]

Originally Posted by La lamy

I felt the same and asked the Canadian government's Financial Minister to give us a way to save money without it being taxed and it lead to Canadians getting TFSA accounts (Tax Free Savings Account). We can invest up to $6000 per year whichever way we prefer, i.e. cash, bonds, stocks etc... and the interest isn't taxed. When some money is taken out (tax free), that extra amount can be reinvested at a later date since the yearly maximum is accumulative, no matter how much you put in any given year. Along with our RRSP accounts which is a deferred tax account, we have great ways to manage our cash in Canada.

What have interest rates been in Canada the past 10 years??

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?

[Catalina36]

Originally Posted by Michael G.

High interest return is finally showing come back and nice to see.

I just wish we could accumulate some interest without the taxes.

CHECK OUT symbol "IIM" Invesco Value Municpal Income, paying 5.1% federal tax free

[villager7591]

You're penalized for good, successful decisions in our country.

[mrf0151]

Originally Posted by CoachKandSportsguy

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

Houses do produce income. Remember some of us have own rental properties. All part of the retirement income portfolio.

[Caymus]

Originally Posted by RiderOnTheStorm

Without wishing to make matters seem worse, you could think of an 8.3% level of inflation as the need to work one month out of the year for no income. Kinda puts things into perspective.

Plus, the 4 to 5 months needed just to pay taxes.

[Blueblaze]

Originally Posted by Stu from NYC

I would agree that real inflation is higher more like 15% or so. Do think that the higher interest rates will reduce economic activity most likely a recession that will help to end inflation or at least bring it back to more tolerable numbers

OK, I'll play. Name something that's only up 15%.

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?