As always, I enjoy your posts. Fixed-rate mortgage holders and stock investors are the big winners in the US. Imagine having a fixed 3% 30-year loan. If inflation continues to increase, that loan becomes even more advantageous. I mean, if you have a sub 3% fixed mortgage, you basically hit the lottery even at this point. Same with long-term investors in the S&P 500. The worst part of inflation is it can mess with the American psyche and isn't great for politicians currently in office. They want the slow boil of increased inflation and not the quick spurt we are experiencing. I believe inflation is just catching up with what has been historically low for the last 20+. The real unknown is how high inflation will continue to climb in the next 12-24 months. That will need to be controlled to prevent the current "good" economy from getting too far off track. Side note, if you have cash and want a conservative investment to protect that money from inflation. Check out I savings bonds that are currently producing 7% interest. You can do $10k in December and another $10k per social security number on January 1. Of course, understand the rules around this low risk savings product. Overall, the rules are pretty flexible for I bonds and better than sitting in your traditional bank savings account at this moment.
What a great time your project has taken you to. There is nothing more fortuitous in exchanging at a time when the dollar is at a peak. Can I buy your crystal ball. 👏👏👏👏
Great post, inflation is a tricky subject because everybody's personal inflation is different. A key turning point in inflation really the starting gun was in 1971 when Nixon "temporarily" ended the USD being an asset (Gold) and made it a liability (debt). If you look at a dollar it says "Federal Reserve Note" just like a car loan is a car "note" showing that indeed the dollar is a debt instrument.
You can see what happened the moment Nixon broke the link between a limited supply of money to letting politicians print currency here: https://wtfhappenedin1971.com/ Each dollar printed reduces the purchasing power of the dollar in your wallet.
While this is tragic, it is not unusual, in fact just about every empire in history has done the exact same thing including the: Dutch, Spanish, and British.
As always, I enjoy your posts. Fixed-rate mortgage holders and stock investors are the big winners in the US. Imagine having a fixed 3% 30-year loan. If inflation continues to increase, that loan becomes even more advantageous. I mean, if you have a sub 3% fixed mortgage, you basically hit the lottery even at this point. Same with long-term investors in the S&P 500. The worst part of inflation is it can mess with the American psyche and isn't great for politicians currently in office. They want the slow boil of increased inflation and not the quick spurt we are experiencing. I believe inflation is just catching up with what has been historically low for the last 20+. The real unknown is how high inflation will continue to climb in the next 12-24 months. That will need to be controlled to prevent the current "good" economy from getting too far off track. Side note, if you have cash and want a conservative investment to protect that money from inflation. Check out I savings bonds that are currently producing 7% interest. You can do $10k in December and another $10k per social security number on January 1. Of course, understand the rules around this low risk savings product. Overall, the rules are pretty flexible for I bonds and better than sitting in your traditional bank savings account at this moment.
Joel, thanks for the I bond tip.
Thanks for your great input
Thank you Nancy for this information on inflation! Can I ask why you decided on the place you are remodeling and the town? I know you love Caicais.
Of course, I wrote about it here https://expatinportugal.substack.com/p/our-forever-home
What a great time your project has taken you to. There is nothing more fortuitous in exchanging at a time when the dollar is at a peak. Can I buy your crystal ball. 👏👏👏👏
There have been many times my crystal ball was cloudy
Great post, inflation is a tricky subject because everybody's personal inflation is different. A key turning point in inflation really the starting gun was in 1971 when Nixon "temporarily" ended the USD being an asset (Gold) and made it a liability (debt). If you look at a dollar it says "Federal Reserve Note" just like a car loan is a car "note" showing that indeed the dollar is a debt instrument.
You can see what happened the moment Nixon broke the link between a limited supply of money to letting politicians print currency here: https://wtfhappenedin1971.com/ Each dollar printed reduces the purchasing power of the dollar in your wallet.
While this is tragic, it is not unusual, in fact just about every empire in history has done the exact same thing including the: Dutch, Spanish, and British.
Thanks John…great information
Sorry Matt...great information