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Interest Rates and Inflation in 2022 and Advice

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posted on Jan, 5 2022 @ 05:06 PM
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www.foxbusiness.com...




Participants generally noted that, given their individual outlooks for the economy, the labor market and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated," the minutes, released Wednesday, said. "Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate."


Everyone ready? From what I’ve read the Feds will raise rates 3 times this year. The inflation we’ve had so far was called transitory, but that’s questionable. So, what are your thoughts? Here’s mine.

I lived in a time when housing interests rates were in the double digits. So here’s something people don’t want to talk about.
Usually when interest rates go up, housing prices go down……but will it be different this time? Will we have both high housing prices and high interest rates. If so, it’s going to get scary bad real fast. If housing prices slide with higher interest rates, I actually believe this is a good thing, this will allow another generation to finally get into the housing market, but I somehow doubt this is going to happen. Yes I’m being Debbie downer.

From what I’ve read household debt is crazy, student loans weren’t forgiven, the can has been kicked. It almost seems as if there is going to be a financial tsunami that hits all at once. The government has/had people drunk on stimulus, child credits and a long rent protection, but that wont last forever. The government is talking about yet another stimulus!! They are doing everything to keep the teeter totter from crashing.

I see many millennials and younger being affected when the shtf. I think Gen X and older will fare better as we’ve been though a recession. I know that was one of the hardest lessons of my life. We experienced double job loss, sickness, a newborn, loss of a house and a major move all in the same year. I know so many people that went through some rough stuff during that time, but you know what we survived. We will survive this too, but I feel the pains will be hard for many.

What advice do you give others on here especially some of the younger members that haven’t been though it.

Here’s mine. Oldest advice in the world…
Don’t keep all your eggs in the same basket.
Multi generational housing isn’t a failure.
Sometime cheap is expensive, cheap food= expensive medical bills, cheap clothes have to be replaced sooner etc.
Be open to moving for a job… We saw first hand during the recession people/family that were willing to move and those that wouldn’t.
You would not believe the difference. Those willing to move had a substantial quality of living increase, some that didn’t are still recovering from the recession today.



edit on 5-1-2022 by JAGStorm because: (no reason given)



posted on Jan, 5 2022 @ 05:17 PM
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My thoughts are:

FSCK!
$#&@#$$$$##

I sold my house a few years back, and went to try and build a new one.
They shut down the world so contractors wouldn't work.

Now they're destroying the value of the money I did manage to save, while also destroying the wages I've worked so hard to earn.

Busting ass for fifteen years to get ahead in life is about to net me... some property I can't afford to live on (but all my stuff is there!) and a permanent situation where I pay rent from someone else.

Been in the same position at work for seven years, when I was about due for a promotion they sold the company... now I'm about due again and my boss retired without notice and put someone in charge I've never met.

I hate this game.



posted on Jan, 5 2022 @ 05:26 PM
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a reply to: lordcomac




Been in the same position at work for seven years, when I was about due for a promotion they sold the company... now I'm about due again and my boss retired without notice and put someone in charge I've never met.


If you only knew how much I understand what you’ve written, and especially the above. I worked my freaking butt off, they completely changed my entire department and every leader. I went in the bathroom and cried. I got the most perfect score possible on my performance review and did not get above a standard pay raise. How do you get the equivalent of 110, on a scale of 100 and get a regular raise?!!! 🤬 went to HR and they wanted to know what I was going to do. The immature me didn’t fight it. The mature me would have cleaned house. The only plus side is the new person that put in charge ended up being a great friend and mentor. Looking back at all that nonsense, none of it was worth the stress!

I won’t even go into the long story how I single handily saved my department millions and got a weak thank you. I’m talking real millions, not some Peter stealing from Paul. Yes they wanted me to keep doing it and I quit and told them that my me time was more important than what they were offering. They still email me all these years later!!



posted on Jan, 5 2022 @ 05:29 PM
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I changed my mortgage last december because of the low interest , i made a pretty good deal.

Everything will be paid of a few years shy before i retire.
edit on 5-1-2022 by TheGreazel because: (no reason given)



posted on Jan, 5 2022 @ 05:35 PM
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a reply to: JAGStorm

Powell is trying save his legacy. That's what all this is about. They should raised interest rates a while back.

Mellenials and Gen z are screwed over once again. I agree with multi generation households, I wish I had the chance to live rent free and save for a house or build a proper career, and that seems to be a trend nowadays. Everyone I know who purchased a house within the last two years did so because of welfare or bank of mommy and daddy (boomer parents).



posted on Jan, 5 2022 @ 05:42 PM
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I personally believe the long term plan is for government to control all housing, except maybe for the elite.
If you've worked all your life to own your home outright, one catastrophic illness will take away your kids' inheritance. The medical bills will be covered by a government program that allows you to remain in your home, but they have a lien on it. You can also go reverse mortgage, which helps the elderly get through the runaway inflation, but transfers ownership to the government in the end.
It's just another long-range plan to transfer more assets to government control.
Thanks to Nixon signing into law in 1973 the Health Maintenance Organization Act the medical insurance agencies, hospitals, clinics and even doctors, could begin functioning as for-profit business. Turning from a non-profit to a for profit system put us on the path of healthcare being one of the greatest expenses people have to face.
Making life nearly impossible without government assistance isn't an accident, but it's done in such small steps that few can see the long-term planning that's been involved.



posted on Jan, 5 2022 @ 05:48 PM
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originally posted by: JAGStorm
Usually when interest rates go up, housing prices go down……


When rates go up it causes real estate to rise as people who were on the bubble about owning decide to purchase and try to catch the lower rates before they increase more. Moderately high rates are better for the economy over all and particularly benefit private home ownership.

ETA: I want to caveat this with a standard fixed rate mortgage, if you're screwing around with ARM's that's a different story.




edit on 5-1-2022 by AugustusMasonicus because: dey terk er election



posted on Jan, 5 2022 @ 05:57 PM
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originally posted by: AugustusMasonicus

originally posted by: JAGStorm
Usually when interest rates go up, housing prices go down……


That's absolutely incorrect. When rates go up it causes real estate to rise as people who were on the bubble about owning decide to purchase and try to catch the lower rates before they increase more. Moderately high rates are better for the economy over all and particularly benefit private home ownership.


Initially all the people lagging that will try to squeeze in as a last ditch effort, but after that nope, prices have traditionally fallen.

Will they crash, hard to say. There is only so much money to go around, so as interest rates rise, prices will have to fall. People only have so much buying power.

I won’t argue about it, because we are going to be living it very soon, I will say, we’ll see how it pans out.


Also just talking general housing, some areas will always be hot no matter what.



edit on 5-1-2022 by JAGStorm because: (no reason given)



posted on Jan, 5 2022 @ 06:09 PM
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the price of a home is considered a "monthly" payment by the financial industry.

In the beginning of inflation, interest rates are low and taxes are low. Therefore, the finance guys figure you have more disposable income and will loan you more money. This "loan" amount is a virtual increase in the money supply which promotes inflation in capital assets like homes and cars which are financed.

When inflation reaches some key level, interest rates and taxes begin to go up in order to reduce the money supply and reduce inflation. The prices of homes and cars will begin to be reduce . . . by the amount of monthly impact on loan payments. They will still get the same amount of you if the price of the home is less, but you will pay more in interest and taxes. A 1 percent increase in mortgage interest decreases your buying power by 11 percent.

this information is readily available - google it.



posted on Jan, 5 2022 @ 06:17 PM
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Back in the '80s, I had a mortgage at 12 percent. it was murder.

I have a friend that bought the farm in 2006 . . . a farm . . . for over $300K. 15 years later, it sold for $260K.
No one can afford to lose $50K in a house regardless of the interest rate.

Anyone that does not believe a housing crash can't happen again should read about Evergrande - I think they demolished a dozen more high rise building this week.

I bought a house one year ago. The value of that house has increased 45 percent since that time. If it can go up 45 percent in one year, it can go down 45 percent in one year.



posted on Jan, 5 2022 @ 06:49 PM
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a reply to: sraven

Depends on the market ... Evergrande crash was because of Chinese culture. Housing market in America growing ridiculous percentages in a year was because of mellenial / predatory investing fomo and low interest rates.

The biggest difference is that China no one owns the land, letting a big entity like evergrande fail is no big deal to the ccp, in the west its a much different story, think 08 sub prime crisis. American banks aren't going to suffer this time around, they've gained massive amounts of wealth from all this.
Think about how many people are locked into 25+ year debts now with a booming economy on the horizon. Banks are laughing at this point, they got massive amounts of boomer wealth via their children.
edit on 5-1-2022 by strongfp because: (no reason given)



posted on Jan, 5 2022 @ 06:54 PM
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In 1990 the market on the west coast started to sink real bad. In 3 years jobs were hard to find . Wages were about $6.50 an hour for a management training program in the food business. But prices at the time were reasonable. These days I have no idea what wages are in the States, but in this country a clerk at 7-11 starts around 8 bucks an hour and these are mostly university students working there and also housewives during the day. Banks here pay 0.01% interest rate. Home loans are about 2% and for 40 years ( yes, that's the typical loan time for a house here ). New houses were I live ( starter homes) start out at about $350,000.00 and they are cheaply made too. But real estate taxes are dirt cheap and house payments average about 800 bucks a month.
Life even gets tougher as one gets older. See, the house is paid off and you take ill and put into the care center. Care center then owns your house and sells it to cover your lifetime expense at the care center. What you need to understand on this system is that if your house sells for $100,000.00 and you are in the care center for lets say 3 weeks and suddenly die, the care center makes $100,000.00 off of you. Its all a fkn racket. Better to spend what you have and live in a house and pay rent when you get over 65 in this country.



posted on Jan, 5 2022 @ 07:30 PM
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a reply to: JAGStorm

I welcome the tapering seeing as I disagreed with much of the reactionary decision making to begin with.

A lot of what was done were farts in the wind. Attempts at appearing like they were tackling a lot at once. In reality I think it was overzealous, wasteful, and benefiting the wrong parties.

What we're about to experience is the fallout from cheering on "more more more".

Unfortunately the real damage may not have been discovered yet. All of that just primed the environment for a serious recession.



posted on Jan, 5 2022 @ 07:44 PM
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During inflation, whoever is holding the most assets wins. Cash is the last thing you want. Crypto, gold, silver, PROPERTY. Those all go up in value, while your dollars buy you less.

Inflation is the most effective way to create a subservient class, because all the rich who are holding assets lose nothing. They are invested in things that will go up accordingly and hold their value compared to cash. The regular people with no investments, they are the ones who get screwed because the money they saved to retire buys less and less every day.

This is all planned. The people with the power and money are securing their positions and status in a way that will guarantee regular folks like us are no competition.



posted on Jan, 5 2022 @ 07:51 PM
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originally posted by: JAGStorm
So, what are your thoughts?


My thoughts are that it is now too late for anything good to happen here. The economy in 2008 should have been allowed to outright crash, then we could have actually recovered fully. Before COVID was used to force the economy into the coming disaster, we were actually doing a great job of recovering anyway. The problem is that we now have the bill for 2008 AND the bill for the COVID deception coming due and there's not really anything this current government is going to do that will even remotely make it better on We the People.

Blame the blundering incompetence and economic illiteracy of the current admin or call it an intentional act of nation destroying on their part, the end result is the same: a deep, deep economic chasm that will only be escaped from via painful major policy shifts or an outright civil war.



posted on Jan, 5 2022 @ 09:40 PM
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a reply to: JAGStorm

1. If you have a mortgage, lock in a FIXED rate for as long a term as you can, do this ASAP

2. Pay down ALL your credit card with a home equity loan at current FIXED rates for as long a term as you can

3.Eliminate or replace any VARIABLE rate loan you have ASAP.

Variable rate loans is what will KILL the personal finances of many as interest rates rise.

If you are fortunate enough to have savings that are meant for long term, suggest investing in stocks of commodity producers, like copper, that tend to do very well in an inflationary environment.

This is the 1970s all over again....complete with a democrat moron president at the helm...man the lifeboats...
edit on 5-1-2022 by M5xaz because: (no reason given)



posted on Jan, 5 2022 @ 11:48 PM
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a reply to: M5xaz

LOL,

It is just like Jimmy Carter, except this time with dementia.



posted on Jan, 6 2022 @ 01:41 AM
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originally posted by: M5xaz
a reply to: JAGStorm

1. If you have a mortgage, lock in a FIXED rate for as long a term as you can, do this ASAP

2. Pay down ALL your credit card with a home equity loan at current FIXED rates for as long a term as you can

3.Eliminate or replace any VARIABLE rate loan you have ASAP.

Variable rate loans is what will KILL the personal finances of many as interest rates rise.

If you are fortunate enough to have savings that are meant for long term, suggest investing in stocks of commodity producers, like copper, that tend to do very well in an inflationary environment.

This is the 1970s all over again....complete with a democrat moron president at the helm...man the lifeboats...



Got to say I respect your common sense post.
Sadly people don't understand what a VARIABLE rate loan is all about. Yes, that low rate at start is cool, but can you imagine when it gets up to 12%.



posted on Jan, 6 2022 @ 06:34 AM
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i am forced to see the future economic engine as a dynamic 'socialist' exercise-in-transformation

potus is 'tapering the +$80 billion monthly spent on shoring up the old system and sectors of the capitalist model

(the mega meat conglomerates are his first target for marxist build-better policy )

more 'stimulus' but called something else... (bottom line: its still being on govt Dole)

guess what---> that low interest rate on refinance of home will eventually get an expensive surcharge added-on !


the '70s wage+price controls will become a new normal...

so be agile with your decisions about economic security (as it were)



posted on Jan, 6 2022 @ 12:24 PM
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a reply to: JAGStorm

GOV just extended the 0% interest and no payments required for federal student loans a second (third?) time. It was going to come due again next month, now it's not till May.




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