When It Comes To Inflation, The Fat Lady Isn’t Even Close!
“It ain’t over ’til the fat lady sings” is a phrase that comes from a tendency in operas to end with a heavy-set lady singing an aria. It’s a reference to Valkyrie Brunnhilde’s 10-minute solo that ends Wagner’s Ring Cycle opera.
Sportscasters use the line frequently. One should not presume to know the outcome of the event, even if it appears near its conclusion.
While politicians try to minimize inflation, don’t buy it, the fat lady is home, worrying about paying her bills, not even thinking about her closing aria.
James Rickards explains the propaganda currently being fed to the public:
“Everyday Americans understand inflation perfectly. …. Inflation is one of the biggest concerns of those who live in the real world.
…. Here’s the reality and here’s the political narrative: Reality is that prices have been going up at the fastest rate in 40 years and they are still going up.
|…. It’s true that the rate of inflation is coming down, but prices are still going up. They’re going up at a slower rate but they’re still going up.
…. The average price of a pound of ground beef in the U.S. was $5.11 in September 2023. In October 2023 the price of a pound of ground beef was $5.23. That’s a 2.3% increase on a month-over-month basis, which annualizes to over 25%.
That’s the kind of inflation that real Americans confront every day.
…. It is possible to use propaganda to lie to the American people; it can work in the short run. But inflation is not one of those areas where propaganda works. The American people know what things cost, they know prices are going up, and no amount of lies can change that.”
Between 2019 and 2023, the average price of a burger rose from $9.74 to $15.88 – a 63% increase – along with the prices of most everything else. Did your income go up 63%?
Bankrate chimes in:
“Inflation is eroding workers’ gains. Three in 5 workers (60 percent) say their incomes haven’t kept pace with inflation over the past 12 months, up from 55 percent last year. For those who did receive a pay bump…more than half (53 percent) said their incomes haven’t kept pace with inflation, up slightly from 50 percent last year.”
Morningstar reports on a recent Allianz survey:
“A new survey finds that 61% of us are more afraid of running out of money in our old age than we are of dying itself.”
The politicos want us to believe they have everything under control. Treasury Secretary Yellen recently said, “It certainly takes skill on the part of the Fed to calibrate monetary policy properly.” The public knows better, prices are going up rapidly while wages and/or retirement income are not keeping pace.
Inflation is NOT under control; people are scrambling to protect their wealth and lifestyle. Something has to give.
How do investors protect the value of their nest egg?
How do retirees pay their skyrocketing living costs?
Luckily there’s a proven way for you to stay ahead of inflation, just like 20,000+ investors are doing right now…
Here’s how you can be one of them. Click HERE for more information.
What we see every day
We live in a Del Webb gated community in Phoenix. Many friends, citing the never-ending increases in association fees, have downsized, moving to less expensive neighborhoods. Californians are flooding in. Many are also downsizing, feeling our community is more “affordable” compared to what they left behind.
I’m sure you’ve noticed prices at your favorite restaurants have skyrocketed. All but the elite are seeing their standard of living decline.
What to do?
Friend and expert Chuck Butler has warned us about what happens when a country loses “reserve currency” status, pointing to the poverty in England when the British Pound got knocked off its perch. While that is eventually coming for the US dollar, I’m seeing a lot of people already hurting. I contacted Chuck.
DENNIS: Chuck, thanks again for your time.
I’m doggone concerned. We have talked about the investing side before, owning gold and inflation-protecting assets, but today I want to look at spending. People are realizing the “stuff” they once could easily afford, may be out of reach today.
Four years ago, a person with a monthly housing budget of $2,000 could qualify for a home valued at more than $400,000. Today, that same buyer would need to find a home valued at $295,000 or less.
Chuck, isn’t that the tip of the iceberg? Friends with paid-for homes are downsizing because their living expenses are exceeding their income; double-digit increases are everywhere.
Even if inflation hit zero, what would happen to consumer prices?
CHUCK: Dennis, for years we’ve all witnessed how prices seem to rise and never come back down. I’m sure you remember when gas was 17 cents a gallon. Compound inflation continues to erode the buying power of our earnings, and disposable income. So, to me… I don’t see prices coming down; maybe electronics, which have been on a downward spiral for years now.
Dennis, inflation begets higher wages; unions in particular fight to keep up. The higher labor costs ripple through the system from manufacturer, distributor and retailer. They all must increase their prices to pay for the wage increases… It’s a vicious cycle.
Kathy and I are seeing the same things, food, insurance, health care costs, you name it. Once those prices go up, don’t expect them to go back down – ever….
DENNIS: I read car insurance premiums had the largest increase in 47 years.
We’ve seen friends hit the ultimate survey fear; they ran out of money and their kids are supporting them.
Do you see any common-sense steps on how to get a handle on things early enough to keep that from happening?
CHUCK: Put your ego and pride aside, taking smaller steps now that may save big steps later.
This was a recent CNBC headline: “Couple has $520,000 in debt—and wife had no idea: ‘We’ve been living a life maybe we shouldn’t be living.'”
Good Lord! Work together with your spouse or partner, stay on top of things. Ignoring the obvious does not make things go away!
Absolutely do not go into a large debt position at a later age! You would be doing the same thing that the Gov’t is doing… kicking the can down the road, and letting YOUR younger generation deal with the problems…
If you are worried about your income not covering expenses, a paid-for home just makes it easier to downsize… You’ll probably bank some cash out of the trade, and that would be a good thing! Invest the money and generate income.
Roth IRAs should be seriously considered… Pay the taxes now, and what it earns is tax-free. There’s a reason the government wants to double the size of the IRS.
DENNIS: The survey said younger generations are also struggling. They can’t afford the McMansions and BMWs they expected in their 30s. What advice would you have for them about providing for their family and being able to retire?
CHUCK: I’d share what my dad told me when I began to work; don’t rely solely on Social Security… Today, the government is paying out more in benefits than it is taking in, increasing the government debt. The US will soon be paying $2 trillion to service this debt. It will be impossible for the government to keep their Social Security promises in the future….
I recently quoted Lew Rockwell in my letter, A Pfennig For Your Thoughts:
“Americans are largely maxed out…. Americans had surpassed a combined total of over $1 trillion in credit card debt back in August. Three months later, the balance had already gone up an additional $48 billion.
…. Household Debt and Credit…continues to worsen as Americans struggle…. What’s more alarming is that credit card APRs have gone up 30% in the last year and a half, eating away at consumers’ budgets more than ever before.”
Forbes recently reported the average interest on credit cards is 27.8%. Those interest rates will eat you alive – don’t let them! Pay off your credit card purchases monthly and enjoy a good night’s sleep!
DENNIS: You’ve pointed to England and the devastating impact on their quality of life when they lost reserve currency status. We can’t control that, but it will be a huge negative event.
While the standard of living for all but the elite will be affected, some will fare better than others.
What will the winners do differently from those who end up like many in the Great Depression?
CHUCK: That’s a good question, Dennis…
While I think I have bottled the formula to live a good life, I can’t say for sure that everything will work out the way I planned… And that leads me to you, and your plans… Stay on top of things, and make changes where needed… If you feel you need to own more physical Gold/Silver… Then do it! While the government may be out of control, does not mean we have to be.
Don’t count on government help; they will be fighting for survival. Push the Gov’t out of your retirement expectations. If they do come through with a pittance, then that’s icing on the cake.
Get out of debt as soon as you can… I can’t stress that enough…being debt-free will help keep a roof over your head and some control over your life; you’ll fare much better than someone with big debt and servicing costs…
Dennis here. Wow. Thanks, Chuck.
We see what’s coming and must prepare our offspring for their future. Inflation is not going away anytime soon. We don’t ever want to hear, “Grandpa, why didn’t you warn me?”
A little help goes a long way!
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On The Lighter Side
In 1963, the Chicago Bears played the New York Giants for the NFL championship in Wrigley Field, in Chicago. The game was on national television, except for the Chicago area. If the team did not sell out all the tickets, the game was blacked out.
Four of us shared the cost of a $20 hotel room just south of Milwaukee so we could watch the game on a Milwaukee station. The Bears won 14-10.
The first Super Bowl followed the 1966 season. For more than 50 years following, a national audience was able to watch all NFL playoff games – for free.
Recently the NFL decided to take one of the more popular games and stream it through Peacock streaming service (affiliated with NBC). Simple greed, either you sign up for a service you probably don’t want, or need or you can’t watch the game. Hardcore football fans were furious.
Gridiron heroics reports:
“NFL Lost 10-12 Million Fans Saturday Night By Broadcasting Kansas City Chiefs Game On Peacock
The league lost millions of viewers with the Peacock broadcast on Saturday. They can absorb the cost of one game, and knew going into Saturday night they’d miss out on viewers. But they could hurt their long-term growth potential by alienating their larger fanbase. And their largest fanbase watches games on national TV.”
This is the tip of the iceberg. Millions are vowing to NEVER subscribe to Peacock – ever. If I were an advertiser, I’d ask for some money back for sure.
Hard to understand why a business would choose to alienate their most loyal customers. Hope the backlash teaches them a lesson.
Quote of the Week…
“A fundamental rule in marketing – Never chase new business at the expense of your existing customers.”
— Dennis Miller
Subscriber Charles C. shares some good Charlie Brown quotes:
- “Worrying won’t stop the bad stuff from happening, it just stops you from enjoying the good.”
- “I don’t have time to worry about who doesn’t like me…. I’m too busy loving the people who love me.”
- “Perhaps they are not stars in the sky, but rather openings where our loved ones shine down to let us know they are happy.”
- “The less you respond to rude, critical, argumentative people, the more peaceful your life will become.”
- “There are moments in life when you miss someone so much that you just want to pick them from your dreams and hug them for real.”
- “Definition of a friend. Someone who says nice things about you when you aren’t around.”
- “The smile on my face doesn’t mean my life is perfect. It means I appreciate what I have and what I have been blessed with. I choose to be happy.”
- “Faith is holding on tight when the going gets windy.”
This is Jo’s favorite:
- “All you need is love. But a little chocolate now and then doesn’t hurt.”
Until next time…
“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken
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