That’s right!
Inflation just set a new 40-year record, coming in at 7.5%. This is absolutely decimating our purchasing power.
You know, those buckaroos in your pocket?
The problem is, inflation chews through the money you have in your bank account. It devours your stagnant wages. So you pay more, to obtain the same amount of goods or services.
In fact, this is what inflation has done to us since 1983.
You see that “100” on the left?
That represents one American dollar.
You see that continuous downward trend all the way to the right?
That would be the decline in the dollars purchasing power since 1983. You cannot see the number on the right, but right now, your 1983 dollar is worth just 35 cents!
The St. Louis Fed explains it.
Inflation All Over The World
Since we never look at a subject in a silo, and lest you become distraught over this disappointing news… Never fear, because misery loves company! It just so happens, the whole world has higher inflation right now, (also: Britain). Though the U.S. has some of the worst.
What a coincidence huh?
So lest we become political tools like our politicians, then we cannot blame this whole mess on Senior Biden, can we?
Nope.
We can thank governments of the past and present for this fine mess they wrought. Globally I might add. We are drowning in inflation as politicians decided in order to save us from the COVID crisis, they needed to print trillions of dollars to save the day.
In other nations, they printed their own version of money to accomplish the same task.
However, this did not save us, did it?
Nope.
Not a chance.
All it did was rob the middle class and make the fat cats fatter. You remember the news headlines in the last year. The richest of the rich made billions in profit during the pandemic.
While us middle class and poo folk became broker and broker.
Now, thanks to raging inflation, the few bucks we have buy less and less. That must be the reverse Robin Hood effect. Rob from the poor, and give to the rich. Only by doing it through the political process, few people notice what is actually happening.
To make matters worse, not only did governments the world print loads of funny money. They also kept people from being booted from their homes. So that ensured that housing prices went up, up, up, while your purchasing power continued to go, down, down, down.
Not to mention super-duper low interest rates.
Interest Rates To Go Up, Up, Up!
Ahh, interest rates.
Since the not-so-Federal Reserve finally realizes inflation is not transitory, they claim they are going to raise interest rates. Not only interest rates, but they will also do some good ol fashioned “Quantitative Tightening”.
That’s where they let the assets they purchased fall off the books, without getting too technical anyway.
Study and news with a fresh Christian perspective in your inbox.
I can hear you now, why do they need to do Quantitative Tightening?
Well Bubba, the Federal Reserve has about $9 trillion dollars worth of assets on their books. The more debt they buy, the more artificial our economy becomes. You see, normal Joes and megacorps should be buying up those assets. In a real economy that is.
Not the artificially fabricated one we have today.
By the way, talk of Quantitive Tightening is not just taking place in the United States.
I will say, though the Fed has not yet taken actual steps to increase interest rates and reduce their balance sheet…
All that talk is starting to change the markets.
Housing Market Jitters
Interest rates for a 30-year mortgage have now climbed to 4.02%.
Why it was just 2-3 weeks ago and that rate was 3.25%.
Is this having an effect on housing?
You betcha!
At just a 4% interest rate, and current prices, more and more buyers are being priced out of the market.
In fact,
- Mortgage applications to purchase a home dropped 10% in the last week.
- Mortgage applications to refinance a home have dropped 52% from the same week one year ago.
Can you feel it?
The winds of change continue to blow…
On another note…
I honestly hope all the investors buying homes, which makes up 27% of all home purchases lose their hind ends when the market changes direction! I hope they go bust, bankrupt, and everything else.
Call me a lunatic, but I feel a single family home is just that. A place for one family to gather with a roof over their head. It was never intended to be an investment vehicle. It’s a free country, but it sure is making it crazy tough for so many Americans to purchase a home.
Speaking of country, only Americans should be able to buy America, not foreigners and companies from different lands. America should never be for sale.
Summary
So at the end of the day, when we look at all the problems plaguing us, when we look at the root cause. We always find it is government. The government took our freedoms during the pandemic and the government has stolen our money through money printing.
Let’s call money printing for what it is.
A tax.
Inflation is taxing our wealth away.
So once again, the government is always our problem, fortunately, many people are finally starting to realize that. Pointing this out does not make one “anti-government”. Pointing this out means we are “anti-BIG government”.
Instead, we believe government should be small and your average Joe should be able to make his own choices in life. Our choices and life should not be dictated to us by government as they are today.
So when you have an opportunity to stand up for your rights, make sure you do that, and my friends, always keep it Christian!