There is No Inflation - What? - So Says Powell at the Fed

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There is No Inflation - What? - So Says Powell at the Fed

Account Closed
Investor · Member since 2021 · 265 posts · 305 votes

Powell says there is no inflation. I guess he hasn't tried buying real estate recently. Just for the record, the Fed changes what is in the Inflation Index whenever it suits their needs. There is nothing so dishonest as changing definitions on people without telling them you are doing that.

If anyone here thinks real estate is cheaper today than it was a few years ago, have a nice glass of wine, relax and get a grip.

Why does this blatant dishonesty matter? 

1. Because the Fed can't print more money if the inflation rate or if interest rates get too high. 

2. Without more printed money, people don't get stimulus checks, and the political elite can't reward their high dollar donors with very large contracts.

3. When people don't get stimulus checks they have to go back to work to eat and that causes discomfort. People who are in discomfort are not easily controlled by the government and they riot for food. Take your pick.

4. So, the inflation is passed on to the real estate, gold, silver and asset sectors. Which personally I have benefited big time from. 

5. But it causes a huge gap between the "haves" (those who are asset based), and the "have nots" those who try to save in 401k's, IRA's and other cash based "investments" like the stock market. I know, I know, the market will always go up, until it doesn't.

6. The Dodd-Frank law allows the government to take your money in a "bail in" if it is in savings, a 401k, IRA or any electronic transferable condition. Take Greece for example, they closed the banks on a Friday, did a "bail in" on people's accounts over the weekend and people lost a LOT of money over the weekend. A "bail in" is used to pay off Government debt. Remember that stimulus check you got? It's borrowed money and it has to be paid off. No free lunch here.

7. To keep that from happening to you, it's best to store your wealth in assets. Sell the assets to buy other things when you need to. 

8. "Bail Ins" happen quickly and without warning. 

So, maybe according to Powell there is "no inflation" (except in hard assets) but there are other, more obscure things at play. And it isn't good for your pocket book. 

Oh, and there is no medically provable benefit to closing down the economy. Look at Florida.

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Jim K.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
5y

@Account Closed

Good for you. I don't like Greek walnut baklava much, because the Turks and the Lebanese make it better than we do with pistachios. OK, you're really talking about Cyprus. I have no real clue how Cyprus handled its mess.

In any case, a much better example of the possible outcomes to all the "stimulusing" is what happened with small gold holdings in the USA during the Depression, as well as what is happening to us, the gym owners, the restaurant owners, and the bar owners right now with the COVID moratoriums against eviction and mandatory closings. The gubmint has massive power and they can impose it on us, and we will always be shocked and dismayed when the state reveals it is essentially a repressive institution and doesn't really give a damn about anything other than maintaining its power over us.

Sooner or later, the free money giveaways are going to going to screw us but good, no matter how much the gubmint try to hide away the real inflation happening.

I'll tell my story on the podcast, but do you know what it's like to arrange with your cousin in Athens for her to fly to Rome to pick up Western Union money and fly back so your aunt can buy groceries and not eat at a church soup kitchen? You know what it's like to be on the other end of that call from your aunt when she gets the money? Every Greek family in the USA was having war councils in 2015, trying to figure out who could mortgage what so we could keep our people going back in the old country.

It was that experience that made me give up on teaching and go whole hog into real estate. The next time the wolf comes howling to the door for the blood of my family in an economic conflict, I'm gonna be behind that door with a money howitzer.

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  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    @Account Closed

    What are you talking about when you're talking about Greece? I am Greek. I had family in Greece when the government instituted capital controls. That's not what happened. Now I agree with you that Powell is lying about inflation, but Greece in 2015 isn't the example you're looking for. Greece is what happens when unelected officials turn your country into a protectorate and decide when you have and when you don't have access to your own money in your own bank account. I hope to talk about that on a Money podcast at some point.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Jim K.:

    @Account Closed

    What are you talking about when you're talking about Greece? I am Greek. I had family in Greece when the government instituted capital controls. That's not what happened. Now I agree with you that Powell is lying about inflation, but Greece in 2015 isn't the example you're looking for. Greece is what happens when unelected officials turn your country into a protectorate and decide when you have and when you don't have access to your own money in your own bank account. I hope to talk about that on a Money podcast at some point.

    I dont know what you guys are talking about ..  there is NO inflation none  in our industry.. in fact what there is though is

    HYPER INFLATION  at least at my level of building new homes in todays world. Lumber 2X or more  Wire for the house doubled .. plastic pipe 75 cents a foot a few months ago 2.75 today .. cabinets up  Roofing materials UP  on and on.. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    @Account Closed

    Good for you. I don't like Greek walnut baklava much, because the Turks and the Lebanese make it better than we do with pistachios. OK, you're really talking about Cyprus. I have no real clue how Cyprus handled its mess.

    In any case, a much better example of the possible outcomes to all the "stimulusing" is what happened with small gold holdings in the USA during the Depression, as well as what is happening to us, the gym owners, the restaurant owners, and the bar owners right now with the COVID moratoriums against eviction and mandatory closings. The gubmint has massive power and they can impose it on us, and we will always be shocked and dismayed when the state reveals it is essentially a repressive institution and doesn't really give a damn about anything other than maintaining its power over us.

    Sooner or later, the free money giveaways are going to going to screw us but good, no matter how much the gubmint try to hide away the real inflation happening.

    I'll tell my story on the podcast, but do you know what it's like to arrange with your cousin in Athens for her to fly to Rome to pick up Western Union money and fly back so your aunt can buy groceries and not eat at a church soup kitchen? You know what it's like to be on the other end of that call from your aunt when she gets the money? Every Greek family in the USA was having war councils in 2015, trying to figure out who could mortgage what so we could keep our people going back in the old country.

    It was that experience that made me give up on teaching and go whole hog into real estate. The next time the wolf comes howling to the door for the blood of my family in an economic conflict, I'm gonna be behind that door with a money howitzer.

    3Reply
  • Chris Levarek
    Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes
    5y

    What option do they have? To tell us inflation is on the rise and they can't do anything about because they've dealt their only hand by lowering rates to 0. 

    At it's base, inflation is rising prices....well we all can see prices are rising. 

    From bls.gov, "The Consumer Price Index for All Urban Consumers rose 2.6 percent for the 12 months ending March 2021, the largest over-the-year increase since August 2018. Food prices advanced 3.5 percent over the past 12 months, while energy prices increased 13.2 percent over that period. Prices for all items less food and energy rose 1.6 percent."

    But it's "transitory" right? :)

    0Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    Well, in the Greek example they were probably just seizing all the taxes people didn't pay. Kidding, kinda. I think Greece has the highest tax evasion rate in Europe, and they retire at 23 or something with a pension? 

    Powell has been pretty transparent that they like the current inflationary rate and see it as returning to some kind of normalcy. They like the current "transitory" inflation because they have been fighting deflation for a chunk of years. I forget who said it but "nothing is more inflationary than a whiff of deflation".

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