4 ms·

It's becoming increasingly clear that the "it's transitory" narrative is dead wrong. But now all the policy makers are committed to the lie. I fear this will ma

by eloff 5y ago

It's becoming increasingly clear that the "it's transitory" narrative is dead wrong. But now all the policy makers are committed to the lie. I fear this will make any reaction much slower and weaker than it otherwise might be. Are we going back to the stagflation of the 70's? How should one prepare financially for that possibility?

MrPowers 5y ago
I think the Fed clarified that they won't be using the word "transitory" anymore last week: https://fortune.com/2021/12/03/inflation-no-longer-transitory-higher-prices-fed-chair-powell-treasury-yellen/ https://fortune.com/2021/12/03/inflation-no-longer-transitor...
apeescape 5y ago
You could ask your employer to match the inflation with a raise every year (on top of the actual raises you might've earned). I think this is a reasonable ask, though understandably not all companies are able to cover the inflation by raising their prices etc. When it comes to protecting your assets from inflation, I suppose investing in companies that pay good dividends and are able to cover the inflation in their business model should be a relatively safe bet, as they continue to provide a steady cashflow. If you think the inflation is here to stay and you want to take on more risk, you could take out a loan and leverage that by investing it, as the inflation should cover the interest. Note that this is NOT financial advice -- I'm anyway not qualified to give that, so take this only as food for thought.
bryanlarsen 5y ago
I bet you're wrong, and it looks like a very small majority agree with me. Want to stake some internet points on that position? https://www.metaculus.com/questions/7977/inflation-above-3-in-2022/ https://www.metaculus.com/questions/7977/inflation-above-3-i...
- djrogers 5y ago
  Historically speaking, the only way out of massive inflation has been a recession, so I'm not sure which I'm rooting for here.
tastyfreeze 5y ago
If the value of the dollar is at risk then preparing financially means getting out of the dollar by getting some assets that are not priced in dollars or physical assets that have intrinsic value. I am leaning more heavily on physical assets as even foreign stocks will suffer to some extent in the event of a dollar crisis. With USD as the current global reserve it's failure will ripple through financial markets and economies around the world. The best thing you can do is learn how these kinds of things have played out in the past and make a plan to "weather the storm" as it were. I have really been enjoying stories of living through high inflation in other countries on https://www.youtube.com/c/StarPathAcademy https://www.youtube.com/c/StarPathAcademy. Not saying that is where we are certainly headed but all of the indicators are the same as other high/hyper-inflation periods in history.

by eloff 5y ago

MrPowers 5y ago

I think the Fed clarified that they won't be using the word "transitory" anymore last week: https://fortune.com/2021/12/03/inflation-no-longer-transitory-higher-prices-fed-chair-powell-treasury-yellen/ https://fortune.com/2021/12/03/inflation-no-longer-transitor...

apeescape 5y ago

You could ask your employer to match the inflation with a raise every year (on top of the actual raises you might've earned). I think this is a reasonable ask, though understandably not all companies are able to cover the inflation by raising their prices etc. When it comes to protecting your assets from inflation, I suppose investing in companies that pay good dividends and are able to cover the inflation in their business model should be a relatively safe bet, as they continue to provide a steady cashflow. If you think the inflation is here to stay and you want to take on more risk, you could take out a loan and leverage that by investing it, as the inflation should cover the interest. Note that this is NOT financial advice -- I'm anyway not qualified to give that, so take this only as food for thought.

bryanlarsen 5y ago

I bet you're wrong, and it looks like a very small majority agree with me. Want to stake some internet points on that position? https://www.metaculus.com/questions/7977/inflation-above-3-in-2022/ https://www.metaculus.com/questions/7977/inflation-above-3-i...

djrogers 5y ago
Historically speaking, the only way out of massive inflation has been a recession, so I'm not sure which I'm rooting for here.

tastyfreeze 5y ago

If the value of the dollar is at risk then preparing financially means getting out of the dollar by getting some assets that are not priced in dollars or physical assets that have intrinsic value. I am leaning more heavily on physical assets as even foreign stocks will suffer to some extent in the event of a dollar crisis. With USD as the current global reserve it's failure will ripple through financial markets and economies around the world. The best thing you can do is learn how these kinds of things have played out in the past and make a plan to "weather the storm" as it were. I have really been enjoying stories of living through high inflation in other countries on https://www.youtube.com/c/StarPathAcademy https://www.youtube.com/c/StarPathAcademy. Not saying that is where we are certainly headed but all of the indicators are the same as other high/hyper-inflation periods in history.