Inflation? And then what?

[Martinjmpr]

My "formative years", that is, the years where I first became aware of the 'outside world' (let's say roughly the ages of maybe 12 - 17, so that would be roughly 1974 - 79) had LOTS of inflation. It was a big enough problem that I remember Gerald Ford having some kind of ad campaign called WIN: "Whip Inflation Now." I have no idea what that program was, I just remember hearing about it a lot. Newspapers had editorials and economists predicted doom and gloom in the 70's if inflation continued.

After that, we pretty much got used to not very much inflation in general retail prices (except for occasional spikes in fuel prices caused by conflicts or crises around the world.)

But from what I've seen recently, we are poised for double-digit inflation for the first time in at least 35 years, maybe longer. I'm betting some of you younger folks probably don't even remember inflation like that.

All those folks demanding $15/hr minimum wage are going to find their demands OBE: Overtaken By Events. Regardless of the "federal minimum wage" employers are going to have to start offering $15/hr minimum if they want to attract any employees at all.

Sad thing is, all those employees who were so happy that they're now earning $15 or even $20/hr are going to be scratching their heads and wondering where all that money went when they realize that the goods and services they rely on are also going up, and those costs are just going to gobble up that "extra" money and leave them with nothing to show but maybe a higher tax bill.

And of course, now the government wants to deal with inflation by throwing more money at people. Hmmm....prices are high, we give people more money so they can spend. What could possibly go wrong?

My question to the group: At what point does inflation start putting a damper on economic growth? As in, when do people have to spend all their $$ on NECCESSITIES so they start cutting back on luxuries like eating out, travel, recreation, etc?

Currently we're doing OK but I'm definitely feeling the pinch when I go to the grocery store or the gas station. More money spent on needs means less to save or spend on other things.

My inclination at this point is to cut back on my "discretionary" spending and try to ride out the storm. If others do the same, we might see prices start to drop, but if the Feds just start throwing money at anybody with a pulse, we'll see crazy inflation get even worse.

[MrPrena]

if asswipe presidents, treasury keep printing money with easy $$ from fed reserve, we will see much higher inflation.

Nixon to Biden. They are almost all same.

[DFBrews]

As a mid 30?s middle of the range conservative CO native that grew up in extreme rural CO. Here are my thoughts that carry as much merit as can be had on a forum.

My grandparents and then later my older aunts and uncles where able to purchase a home larger and ?nicer? than mine that was much newer at the time. I am pretty much buying 2 generations of starter home as my first and current home in the montview and Dayton area.
It was built in 52. They where able to buy this home on a single earner low level blue collar job while supporting 5 family members. They lived a comfortable life.

The people getting 15 dollars an hour right now to perform the tasks marked minimum wage will never be able to afford a home on the front range. And they haven?t been able to for decades.

There is a significant portion of the population that will never advance past entry level for what ever reason. The ones that can will.

The boomers have been very effective at making the most of the cards they where dealt to make sure they are sufficiently padded for the rest of their lives and if successful enough their children?s. A large portion of making sure this happens is politics and passing legislation as such. Which is fine but they can?t complain when the 3 generations alive younger than them are trying to get their slice the pie too including with legislation.

[arbol]

As government spends us more and more in debt, the concept of fake money, or inflation, takes hold.

The normal person, delivering goods and services is priced out of the market, as the market is people getting fake money from the government.

It's a lose, lose, proposition, that can only be solved by limiting government, and limiting government spending.

[Great-Kazoo]

Not sure about now. I can tell you credit card interest rate was 20%, VA home loan interest was 13% give or take a percentage point.
https://www.nytimes.com/1983/01/08/b...eak-level.html

[arbol]

We're talking Venezuela levels of inflation, Kazoo.

No trust in Government, no trust in money.

[colorider]

It’s a big shit sandwich and we all have to eat it.

[Gman]

Not sure about now. I can tell you credit card interest rate was 2o%, VA home loan interest was 13% give or take a percentage point.
https://www.nytimes.com/1983/01/08/b...eak-level.html

I remember 13% mortgage rates and lines for gasoline under Carter.

[Bailey Guns]

Yep...first house I bought in 1983 was with a VA loan at 12.95%. A typical car loan for someone with good credit was 17 to 19 percent. A passbook savings account was earning around 10%.

On Tues the lender locked in our rate on the new house in Ada at 2.247% for a 30 year VA loan. I feel very fortunate with the timing. I'm afraid loans like that will be a memory in a few short months.

[HoneyBadger]

Really good op-Ed by Thomas Sowell from 2012: http://archive.gosanangelo.com/opini...355868741.html

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