I recall back in the 1980s mortgage interests plunged from ~16 percent to 13 percent and we bought our first house for $90k. Now I am considering buying at new car at around $37k and average houses are selling for $500,000+ Sigh...
I remember when a Ferrari 308GTS was $30K -- and people would gasp at that price for a car. First car bought with my own money, I'd kept for the whole note, a 45K-used Paseo... was $10K... and defo overpriced to gut a first-time buyer by a sleazy Maui dealer. Remember back when Toyota sold subcompacts that'd be considered microcars today? Tercels were $8K stripped w/ one driver's door mirror in the '80s, complete w/ carburetors and roll-up windows. Kept that Paseo (early '90s) for 385K. Still got 45 mpg at that mileage, and still had its perfectly-functioning original clutch (remember manual transmissions?) This Prius was $17K ( $13K trade-in ), and is by far my most expensive purchase -- am a man of small (and relatively modest) pleasures, by modern influencer comparison. Not much chance of owning property here on Maui ever, unless I write a Grammy-winning song or happen upon a diamond the size of my head digging a post hole in the back yard
my dad always warned me about inflation. he had seen it up close from 1920 through 2018. he always advised to buy now and not put off until later, and take take serious note of it when contemplating retirement. he was big on real estate investment, as was his mother who came to this country in the early 1900's, and left him and his brother several multi family homes and extra buildable lots. his famous line (which he probably stole from someone) was, 'they aren't making any more land'. covid changed the world imo, and there's no going back.
Inflation is the byproduct of easy money and low interest rates; which the current administration doesn't understand. You forgot interest rates; a key to affordability. I bought my first house when rates was around 8.75% @ around 90K. The current administration wants to limit credit card interest rates to 10%, thinking this will stall inflation. WRONG 1. That's regulated by Congress, NOT the president. Something called separation of Powers. a. If they do that credit card companies and banks will pull back; stop issuing new card and/or stop extending credit limits. b. They will definitely stop all transactions on all credit card holders with an iffy credit rating to limit losses. c. Those companies will start laying-off people; 'tightening the belt' - In hopes for TACO. d. This won't resolve anything and will force most people to file for bankruptcy and the financial system will look like post 2008 housing crisis. I've read that the average household credit card debit it around $6K - people living beyond their means and filling in the holes with a credit cards. I've known $250K household income live paycheck to paycheck - Of course it's someone else's fault for them having to do that. e. Those loan balances still exist - BIG losses for any financial institutions that try to write them OFF. Someone, GOVERNMENT, will have to bail them out - increasing our current debit load of 38T - weakening and possibly destroying the USD. Leave Jerome Powell alone; he knows what he's doing and goes by the DATA. Where are those Republican fiscal watch-dogs when Trump added 2T+ to our annual debit load in just a year????? BTW; Tariff will pay for that. Numbers DON'T LIE............
They're not the first. They will not be the last. Granted....the current POTUS is an idiot for thinking that 5% interest rate is too high, but it's about 2 points higher than it was when the last idiot was in office - although he was just a meat-puppet for the people behind the throne! Stupid SHOULD HURT! THAT KEEPS humans from doing stupid 's' like.....paying $35,000 for a cheaply built hatchback....or ten times that much for a 3 bedroom 2 bath starter home. The good news about inflation is that it's already knocked a zero off of our effective National debt. One down. THIRTEEN to go!
He has learned two things: 1. how to manipulate the value of his real estate holdings to get what he wants. What that's not FRAUD; I'm RICH, depending on what balance sheet your looking at - NOT my income tax filings - PLEASE...... 2. Don't make any of his ventures look profitable; Creditors will repo.it, if it's generating enough cash or break it apart to be made whole again. Why do you think he can't get Wall Street backing on his projects, those people aren't stupid? That's why his salary varies widely, keeping that venture slightly in the 'red'; so creditors figure out it's better to get something rather than nothing. Sunk-cost fallacy.
Yep, experience that first hand in Paraguay. I thought I was being punked or ripped-off when locals told me that with their currency. It was funny when I got back home and converted Paraguayan pesos back to dollars. The Latina behind the counter, didn't realize Mils in Spanish was thousands - added too many zero to the conversion. I didn't want her to get fired and corrected her. She did speak Spanish, don't know if she was illiterate - doubtful since this was in one of largest banks in this country.
