Inflation

Why I’m so concerned about inflation 📊

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Why I’m so concerned about inflation 📊

I am the kind of person who often over estimates costs and underestimates income and revenues. I tend to take a very conservative approach to life, I’m always worried about the worse case scenario maybe a bit too much. Catastrophizing.

Inflation is a bit of an annoyance now but my real concern is how much it is stealing from my future. Every dollar I spend now on more more expensive gas and food is a dollar that I don’t have for my future to grow and eventually buy the big things I want – land, equipment, animals. And the thing is I’m particularly hard hit by inflation because I drive a big jacked up truck and food because I have very basic tastes.

I see inflation every time go to the grocery store, gas up or wash my truck. Everything just seems like it’s getting more expensive. Even recycling at the transfer station is more these days. I make a lot more money than just a few years ago, but I don’t make that extra money to just blow it on today’s inflated prices. I want to save it for a better tomorrow.

Truth be told, my bimonthly savings and investments have been good over the past decade. Things have grown well, much faster than the rate of inflation. Some very well. But it’s getting harder to beat inflation and get good returns with prices going up so quickly. Years ago I bought some energy stocks but stopped adding to it after many years of lackluster growth and endless yearly taxable dividend payments. I probably also keep too much in ordinary “high–er” interest savings and CDs but I want to have something to fall back on should I lose my job, get seriously injured or need to junk my truck.

Lately I’ve cut out all but essential trips like visiting my elderly parents once a week and a one a week drive to the grocery store. In March I drove all of 116 miles, walking 178 miles and riding city buses 278 miles. I’ve had the heat off for several weeks, I avoid having the lights on at night and unplug everything when not in use.

I’ve done the peanut butter and jelly sandwiches and even tried lentils. I’m not a big fan of lentils – they’re such a yuppie food and kind of stinky too boot. I mean their not bad, and pretty cheap but by the time you add spices they’re not a big savings. I’d rather just do ordinary pasta. I rarely eat meat and while I’m a big fan of dairy, it just gets harder and harder to cut food expenses especially when even bulk packages at Walmart are increasing in prices.

Ultimately, I do have faith that my variety of investments will grow faster than inflation. Even as I grumble at the grocery store, I’m living within my means even if at times the budget is tight. Lately it hasn’t been quite as crunched although when I start traveling more come summer, costs will escalate. I’m a lot better off than many and if I stay the course, live frugally, a better tomorrow will come even if inflation poses challenges today.

NPR

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Fed dramatically hikes interest rates again to fight inflation : NPR

The Federal Reserve ordered another big boost in interest rates on Wednesday, as questions bubble up about how much higher borrowing costs will have to go before stubborn inflation starts to come down.

The central bank raised its benchmark interest rate by 3/4 of a percentage point. The rate, which was near zero in March, has jumped 3.75 percentage points in the last eight months. That's the most aggressive string of rate hikes in decades, but so far it's done little to bring prices under control.

"Interest rates have risen at a whiplash-inducing speed, and we're not done yet," said Greg McBride, chief financial analyst at Bankrate. "It's going to take some time for inflation to come down from these lofty levels, even once we do start to see some improvement."

Annual inflation in September was 6.2%, according to the Fed's preferred yardstick — unchanged from the month before. The better known consumer price index shows prices rising even faster, at an annual rate of 8.2%.

An ‘Ugly’ Inflation Report Upended Hopes That Price Gains Would Ease – The New York Times

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An ‘Ugly’ Inflation Report Upended Hopes That Price Gains Would Ease – The New York Times

Friday’s inflation report delivered an unwanted surprise for the White House, Federal Reserve and investors.

While many economists and some administration officials had expected prices to show some signs of cooling, they got the opposite: a re-acceleration in price growth that makes it more likely the Fed is going to have to slam the brakes on the economy as it looks to slow the fastest pace of inflation in 40 years.

As one left-leaning think tank put it, the report was “pretty ugly.”

Five Dollar Gas 💵

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Like it or not, the world of five dollar a gallon gas is upon us. It’s been that expensive in some Midwest and Western states for a while now but it’s finally come to roost in New York State and about half of the rest of the state’s in America.

It often makes me feel like the world is closing in a bit on me, that everything is further drive away then it used to be. While it’s rare that I do much motoring around town, it makes me want to carefully pick and choose when I really want to head out of town or to the supermarket for a big shop, which buys less and less these days as I try to stretch it out more days.

In the grand scheme of things gas prices aren’t that big of a drain on my bank account. Yes, gas is a big portion of my road trips camping in the back country but food and beer are also big costs as are repairing broke equipment and my truck. But it’s not like I’m spending money on hotels or fancy attractions. The swimming hole in the woods is still free and my parents get me a state park pass each year.

Still it bothers me every time I put gas in my truck and see the big numbers on the pump, like a $115 for a full tank on my gasser truck. Or how even the very basic necessity products at Walmart come with bigger and bigger price tags. It’s not that I’m not making more money these days – but you would hope that extra money would be available to invest for a better tomorrow.

I’ve always thought that the reason for earning more money was to have more to save and get closer to future goals. Even COLA adjustments I’ve always tried to put mostly towards boosting further savings and investments. But with inflation and expensive gas, the old ways of always dumping more money into the markets might not be possible. It’s a bit frustrating.

Persistent Inflation Puts Yellen in the Spotlight – The New York Times

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Persistent Inflation Puts Yellen in the Spotlight – The New York Times

WASHINGTON — At her confirmation hearing in early 2021, Treasury Secretary Janet L. Yellen told lawmakers that it was time to “act big” on a pandemic relief package, playing down concerns about deficits at a time of perpetually low interest rates and warning that inaction could mean widespread economic “scarring.”

A year and a half later, prices are soaring and interest rates are marching higher. As a result, Ms. Yellen’s role in crafting and selling the $1.9 trillion American Rescue Plan, which Congress passed in March of last year, is being parsed amid an intensifying blame game to determine who is responsible for the highest rates of inflation in 40 years. After months of pinning rising prices on temporary supply chain problems that would dissipate, Ms. Yellen acknowledged last week that she had gotten it “wrong,” putting the Biden administration on the defensive and thrusting herself into the middle of a political storm.

“I think I was wrong then about the path that inflation would take,” Ms. Yellen said in an interview with CNN, adding that the economy had faced unanticipated “shocks” that boosted food and energy prices.