• We have updated Tinnitus Talk.

    If you come across any issues, please use our contact form to get in touch.

Inflation — Perfect Time to Lose Weight, Change to "Store Brands" or Indulge Spending?

Juan

Member
Author
Hall of Fame
Dec 15, 2016
4,664
Tinnitus Since
08/2014
Cause of Tinnitus
Several causes
This seemingly dull article triggered a heated debate about inflation, salaries in the US as compared to Europe, and competition...

Shoppers in Europe push back against price rises

I agree with some people commenting on the article that it is time to teach those "corporatchicks" (great made up word I borrowed) a lesson by cutting spending in non-essentials and looking at every cent and penny when shopping for groceries.

Corporations are trying to rip us off and we should not let them.

However, South Korean tourists are spending like crazy in Spain's most touristy cities so they might think different...

What do you guys think? Time to save or time to spend?
 
This seemingly dull article triggered a heated debate about inflation, salaries in the US as compared to Europe, and competition...

Shoppers in Europe push back against price rises

I agree with some people commenting on the article that it is time to teach those "corporatchicks" (great made up word I borrowed) a lesson by cutting spending in non-essentials and looking at every cent and penny when shopping for groceries.

Corporations are trying to rip us off and we should not let them.

However, South Korean tourists are spending like crazy in Spain's most touristy cities so they might think different...

What do you guys think? Time to save or time to spend?
The worst time to save is during times of inflation. You are guaranteed to lose if your money just sits in the bank losing its purchasing power. It's time to invest in various things; just don't hold cash.
 
Fortunately, I've been able to get around the high prices of food by changing my diet, although I am certainly sick of chicken! But that was a big money saver, just switching from fish to chicken. You can't beat beans and rice either. My weekly grocery bill runs about $40 US. I could cut that in half, but things like organic peppers, fresh arugula, avocados and red grapefruit are keeping me healthy.

What's scary is the housing prices, they seem to go up monthly.

There's a Tom Russell song called Who's Going To Build Your Wall, and in it he sings "But as as travel around this big old world, The one thing that I most fear, Is a White man in a golf shirt, With a cell phone in his ear".

Meaning, it's the developer that's the big problem. No ethics, no concern for society, just raw, unbridled greed. I got mine, and to hell w/ everyone else.
 
What's scary is the housing prices, they seem to go up monthly.
It makes no sense that property prices go up if interest rates are going up. It means the FED is not doing its job, and interest rates are too low.
The worst time to save is during times of inflation. You are guaranteed to lose if your money just sits in the bank losing its purchasing power. It's time to invest in various things; just don't hold cash.
It depends. If there's a long recession, the money will buy more. Let's see what happens in the next year.
 
It depends. If there's a long recession, the money will buy more. Let's see what happens in the next year.
I'm talking about people with savings or lump sums of money. Everyone needs a certain amount of cash put aside to live, but it's generally a mistake to leave savings in a bank, no matter what the economic environment is unless it's a deflationary one (which is very rare). An inflationary environment just intensifies the speed at which your money is losing its purchasing power, but even under normal circumstances, our money is always losing value.

To offset this loss you need to find a way of growing your money by at least 10% per year. However, if the banking system sees multiple collapses then we may see a period of deflation and then it's better to hold cash. You have to adapt your strategy based upon the situation as it happens.
 
99% of humanity cannot make money grow at that rate. That's nonsense...
Whether you can achieve it or not is irrelevant. It is what is required just to keep up. As Macro analyst, Raoul Pal, said:
Raoul Paul said:
The G4 central bank balance sheet grows at 10% per annum since 2012. If your choice of assets don't make 10% per annum over time, YOU are paying for the systems losses. That is your hurdle rate or you are getting poorer every year.

The monetization of interest payments is observable across the US, EU, UK, Japan and more. That is the bulk of the growth of the central bank balance sheets.

But from time to time something blows up (all banks in 2008, EU banks and Gov's in 2012, everything in 2020 and more banks in 2023).

Normally these events would allow for full equity and debt wipeouts but due to the excessive financial linkages and daisy chains of collateral, these losses are now mutualized via QE.

Essentially, society takes the loss in terms of the debasement of the denominator (purchasing power of fiat currency) as the money printer brushes all sins under the carpet.

Government debt interest payments are also being mutualized via this same mechanism as the tax take is not enough to pay for the ongoing increase in the debt burden. Gov debts compound due to interest payments and non-payment of the debt itself.

The outcome is that the debt payments and bailouts are really mutualized amongst the 99% while the 1% asset holders see the value of their assets rise (due to the fall in the denominator).

Incomes are not linked to the balance sheet, nor are revenues. They underperform. DO nothing and get poorer. After all, an asset is future deferred consumption thus if you own less assets, your future self is poorer.
He is on perfectly on point and says exactly what the problems are.

Savers are getting rinsed because of the actions of large financial institutions and banks. We all pay the price so Wall Street can have a party behaving recklessly with everyone's money. Their mistakes are to the detriment of everyone.

Whether you like it or not, crypto-based protocols level the playing field, and remove some of the control that they have over all of us.
 
Whether you can achieve it or not is irrelevant. It is what is required just to keep up. As Macro analyst, Raoul Pal, said:
It is very relevant, because if 99% of humanity cannot achieve that annual return but inflation is going through the roof, then... "Houston, we have a problem."

Or maybe "Jay Powell and Christine Lagarde, we have a problem", and we are paying you both to solve it, so raise the interest rates MORE!
 
It is very relevant, because if 99% of humanity cannot achieve that annual return but inflation is going through the roof, then... "Houston, we have a problem."
You are missing my point entirely. What I'm saying is that people need to make circa 10% just to break even each year. This is the system we live in, and it's why I rebel against it. It is also partly the reason why the rich get richer and the poor get poorer. Poor people are taught to save their money whilst rich people buy assets and invest theirs; they don't hold large sums of their wealth in savings accounts, for example. This is why you have asset bubbles (such as the real estate market, etc). People need places to store their wealth to offset the losses that are created by the constant debasement of our currencies.

The average person would be much better off just buying a Rolex and storing it in a safety deposit box than using a savings account. That's just one example, but it's best to spread your wealth over a portfolio of diversified assets if you've already got financial security. If not, and you're relatively young, then it's ok to have a much higher proportion of your wealth in riskier assets (if you can live with the volatility).
Or maybe "Jay Powell and Christine Lagarde, we have a problem", and we are paying you both to solve it, so raise the interest rates MORE!
They can't raise the rates much further, if at all. First Republic went under today/yesterday, and more banks are lining up. If you still believe that they can do a Paul Volcker in this economic climate then you're massively underappreciating what's really going on out there. They should let these institutions fail and let the dominos fall where they may, but they don't. They bail them out with counterfeit money, created out of thin air, and then put the burden on the rest of us by debasing our hard-earned money. I'm tired of the legacy system because it no longer works, and we are putting plasters on massive cracks pretending not to see that the dam is breaking.
 
The problem with saving and sticking your money in a savings account is that it is a sure way to lose money. The interest rates from savings account do not keep up with inflation. If you put all your money in a savings account you will have less money when you retire than you actually put into that savings account. It doesn't make a whole lot of sense to be honest. You need to invest if you want to have a comfortable retirement or achieve financial independence/security. It's just the way the world works now, unfortunately. But the good news, it's actually simple through broad base index mutual funds or exchange traded funds (ETFs). These are some of the best inflation hedges out there and there's not much to it. Tracking a total stock market index is all you need to do. There's no need to overcomplicate things or find these silly 'get rich quick' schemes. If you're a person with modest means, it can be achieved. They key is maintaining a consistent annual savings rate to be put into brokerage accounts. Tax sheltered accounts are highly preferable. Reinvest the dividends and let compound interest work its magic. You'll be set overtime. The earlier you start, the better.

There's also real estate investment. I'm not the biggest fan personally, but I totally understand the appeal.
 
The problem with saving and sticking your money in a savings account is that it is a sure way to lose money. The interest rates from savings account do not keep up with inflation. If you put all your money in a savings account you will have less money when you retire than you actually put into that savings account. It doesn't make a whole lot of sense to be honest. You need to invest if you want to have a comfortable retirement or achieve financial independence/security. It's just the way the world works now, unfortunately. But the good news, it's actually simple through broad base index mutual funds or exchange traded funds (ETFs). These are some of the best inflation hedges out there and there's not much to it. Tracking a total stock market index is all you need to do. There's no need to overcomplicate things or find these silly 'get rich quick' schemes. If you're a person with modest means, it can be achieved. They key is maintaining a consistent annual savings rate to be put into brokerage accounts. Tax sheltered accounts are highly preferable. Reinvest the dividends and let compound interest work its magic. You'll be set overtime. The earlier you start, the better.

There's also real estate investment. I'm not the biggest fan personally, but I totally understand the appeal.
Exactly.
 
It is also partly the reason why the rich get richer and the poor get poorer.
The system is rigged because the rich do not pay tax. Politicians gave still another twist to this idea by calling ordinary, middle-class people "rich", making them pay extra taxes to suppor "the poor", while very conveniently forgetting to talk about those greedy Tech Billionaires who do not pay any tax anywhere.
The average person would be much better off just buying a Rolex and storing it in a safety deposit box than using a savings account.
Do that and then tell us how you fare when you try to sell the Rolex haha.
 
The system is rigged because the rich do not pay taxes. Politicians gave still another twist to this idea by calling ordinary, middle-class people "rich", making them pay extra taxes to suppor "the poor", while very conveniently forgetting to talk about those greedy Tech Billionaires who do not pay any tax anywhere.
The system is rigged and it's full of corruption, I agree with that wholeheartedly.

However, I largely disagree that tax avoidance is what makes certain people rich. That is absolute nonsense. Other than those who inherited their wealth, money is earned through sheer determination and hard work. I agree with whoever it was who once said that if you were to remove everyone's wealth and start again from scratch, you'd find that the money would find its way back to the same people. Some are naturally determined and entrepreneurial, others aren't, and would rather earn money working for those who create the jobs and opportunities instead. Then there are others who are lazy bums, and will always be lazy bums regardless of the opportunities they are given. This is clearly a generalised view and does not take peoples upbringing's into account, etc, but I feel the overall point remains a valid one.

There is no such thing as a free lunch.
Do that and then tell us how you fare when you try to sell the Rolex haha.
If you know what you are looking for and can pick out good pieces, watches make excellent longterm investments and would outperform a savings account by a huge margin. It's probably not the best entry point right now as prices have soared recently, but generally speaking, they are good longterm investments and have been for a very long time.
 
Other than those who inherited their wealth, money is earned through sheer determination and hard work.
I had a good laugh at this, considering that most of all those "self-made" billionaires started their businesses, according to their self-serving legend, at Dad's garage... in their privileged neighbourhoods (they forgot to say this) or at privileged and incredibly expensive universities... or through Mom and Dad's connections in the boards of administration of corporate America.

Such hard work!

Good luck with watches! Tell us how it goes when you have to sell them.
 
Everyone needs a certain amount of cash put aside to live, but it's generally a mistake to leave savings in a bank, no matter what the economic environment is unless it's a deflationary one (which is very rare)
Just want to add, it's always important to keep some cash on the side. Everyone needs immediate funds in case of an EMERGENCY! An emergency fund should have at least 3-6 months of living expenses. I prefer 8-12 months, but it's all a matter of preference.
 
I had a good laugh at this, considering that most of all those "self-made" billionaires started their businesses, according to their self-serving legend, at Dad's garage... in their privileged neighbourhoods (they forgot to say this) or at privileged and incredibly expensive universities... or through Mom and Dad's connections in the boards of administration of corporate America.
I was talking about wealth generation in general (across the board) in regards to tax. You're talking specifically about Silicon Valley billionaires. That was not your original point, but I saw just that you added it in the final sentence (surprise, surprise :p).
Good luck with watches! Tell us how it goes when you have to sell them.
I don't own any valuable watches; it's not my thing. I was just giving an example of something that would work better than a savings account.
 
Juan

juan.png
 
Janet Yellen has warned Congress to increase or suspend the debt limit as soon as possible. A failure to do so would result in the government's inability to fulfil all of its obligations by early June which could have a devastating effect on American families and the country's global position.

She has cautioned that it is impossible to predict the exact date when the Treasury will be unable to pay the government's bills, emphasising the importance of Congress's immediate action to avoid such an outcome. She has also pointed out that delaying the suspension or increase of the debt limit can lead to serious consequences for business and consumer confidence, increase short-term borrowing costs for taxpayers, and negatively impact the credit rating of the US.

The Treasury has also suspended the issuance of State and Local Government Series (SLGS) Treasury securities, which deprives state and local governments of an important tool for managing their finances. Janet Yellen has called for Congress to take swift action to increase or suspend the debt limit, emphasising the grave consequences of inaction.

The interest repayments alone, on the national debt, will soon surpass their military budget. It is now dangerously unsustainable. They need to make urgent cuts to their expenditure in future budgets, and this also piles on more pressure for the Fed to cut the interest rates. Will they back down with another threat of a default looming?

It seems like the only way out of this for them now is to print their way out, which they are already doing and this further debases the dollar.

Every time they print, the debt gets smaller.
 
I don't own any valuable watches; it's not my thing. I was just giving an example of something that would work better than a savings account.
It's not what it used to be. It is very hard now to buy a used Rolex, for example - as an investment - you will pay top dollar if you buy it online even from a private seller. If you buy a new Rolex - it loses 20% of its value as soon as you walk out of the door.

Making money out of high end watches is an expert's job.
 
It's not what it used to be. It is very hard now to buy a used Rolex, for example - as an investment - you will pay top dollar if you buy it online even from a private seller. If you buy a new Rolex - it loses 20% of its value as soon as you walk out of the door.

Making money out of high end watches is an expert's job.
That's not entirely accurate, and I said in my previous post that buying now is the worst time to do it (as a longterm investment) as the prices have gone through the roof. However, people have been turning over significant amounts of profit, short term, during these market conditions by simply buying regular Rolex's and then selling them a few months later. That's if you could get hold of one.

You don't have to be an expert to make money on a certain asset at a certain time. It's about evaluating market conditions and recognising what is in short supply and high demand and then dipping your toe in.

Usually, during normal times, if you were to buy a limited edition watch with an unusual feature, like a Rolex with an unusual coloured face, a rare vintage one, or even just a Submariner, etc, after a certain amount of time, the watch will usually gain value and you can sell it for more than you paid for it. Basically, they generally hold and appreciate in value, unlike cash (which loses value significantly). That is the point I was making, but like any investment, market conditions can change which is why it's an investment. Investments are not guaranteed, but cash on the other hand is guaranteed to go down in value, that's the difference. It's about hedging.

I was merely making a point of how bad cash is to hold. Assets are better, especially assets that age by appreciating in value like specific watches do and things like fine art, precious metals, houses, etc. It's far easier to just buy an index fund or a market managed fund, though, for most people.

The best way to invest a lot of money is to diversify and buy a broad range of assets that are not closely correlated. For example: put a bit of your money into some emerging market bonds, a tracked fund, gold and silver, a basket of good cryptos, property, watches, fine art, etc.

I forgot to add here that if one was lucky enough to find one at retail like a Day-Date, Submariner or Daytona, etc, then one would be in an instant profit rather than a 20% loss. You've got it the wrong way around. The problem right now is that nobody can get hold of any of these watches, and the waiting lists are getting longer and longer. If you'd already bought one at retail price as an investment, however, then you'd now have multiples of what you put in.

Don't buy into overbought conditions, though, and that goes for any market. I mean even collectors cards are assets such as baseball cards, Pokémon cards, etc. Buy, hold, and then sell at a later date and hope there's still a market for them.

What I find incredible right now is the used car market. It's gone nuts. So much so that I can sell my current car, that I bought 5 years ago, and get pretty much the same back as what I paid for it. This is unheard of for such depreciating assets. This would mean that I've had 5 years of extremely cheap, almost free motoring (minus service expenses, and dilution of the currency, etc) if I was to sell it. In fact, I worked out it's cost me around £30 a month to own it. Now that's crazy.
 
However, people have been turning over significant amounts of profit, short term, during these market conditions by simply buying regular Rolex's and then selling them a few months later. That's if you could get hold of one.
You are contradicting yourself. First you say people have been making a ton of money by buying Rolexes and then you say they are hard to get hold of.

I will phone some dealers tomorrow to ask if there is a supply issue to confirm watch you are saying. But if they are not available, how are you going to buy one to make money?
If you'd already bought one at retail price as an investment, however, then you'd now have multiples of what you put in.
Demonstrate this to me, that you could buy a $20K Rolex from a dealer and sell it privately for several times the price. Prove it.

Nobody is going to pay double or triple the retail on a Rolex from a non-official source.

Here:

Rolex Submariner for sale | eBay

eBay has loads of post 2020 Rolexes for sale at fair prices - these are authenticated by Rolex dealers after they are sold under eBay's special authenticity scheme. Check this out:

2023 Rolex Submariner | Unworn | Box & Papers | eBay

This is going for £15K which is very close to the retail price.

OK, get your money out and buy it now, and sell for £30K in a month or two LOL.
 
I wasn't intending to go this deep on the watch thing, lol. Again, it was to highlight how bad it is to hold cash longterm in a savings account.
You are contradicting yourself. First you say people have been making a ton of money by buying Rolexes and then you say they are hard to get hold of.
I edited that post after I spoke to a friend who knows a lot more than I do on this stuff. People haven't been able to get hold of the most sought after watches, and there are waiting lists for them. These are the best ones to buy and hold, but not when the prices are like they are now. Market cycles dictate what you're likely to get out of anything.

I haven't got time to look into specific sales as it's early in the morning here, and I can't be bothered. The watch has to be limited or sought after in some way if you're looking for an investment piece, such as the "Hulk" Submariner which ran from 2009 to 2020, many of the Daytonas, or simply a vintage one as the rarity is then guaranteed.

Just so people know I'm not just making this shit up, I'll post some quick screen grabs from online, but anyone can research this stuff for themselves.

9F7F2B9D-EC16-4EFC-9E0A-1C36DD79336F.jpeg


B0A2513B-3254-4E7F-8D22-B9ECBF409E08.jpeg


421C8BE3-2A4A-4931-847E-25418D151CD3.jpeg


C0E1A4C1-E6EA-4DCA-9F12-5CDEF374CA1D.jpeg


79AE43DD-4B0C-4C37-AFE4-397727ADFF5B.jpeg


It's simply a case of doing some research on the watch as there's many out there that would fit the investment criteria. Many watch brands have soared in value recently, but it's not really my thing. I have friends who know way more than I do in this area.

The problem is that it's very difficult to buy the current sought-after models at their supposed retail price, that's the problem I was alluding to earlier. From what I'm aware, you could immediately flip a good one for more money as the demand is so high (and people want to skip the waiting times which is what drives the secondary market up).

This reminds me of the PS2 and the PS5. I was one of the lucky ones back in the day who managed to get a PS2 at launch. Not long after, they were selling for more than triple the retail. I could have sold mine, but I didn't. The same thing happened when the PS5 launched.

More screenshots of the kind of advice that's given online:

01DCD58F-F13F-440B-82E1-DE5A44BBCF42.jpeg


104EEE5A-B90B-4075-A804-620A881B1E6D.jpeg


FB0ED47D-0600-4D6E-AE15-0D75155ADD1B.jpeg


And if you look at forum posts, they are full of guys like this one:

45168502-74C7-4426-93BA-7F92194E7980.jpeg


I have no idea why I bothered going to these lengths in these replies, but there you go :LOL: I'd rather just invest in crypto; less hassle.
 
While the watches blah blah goes on ("info" taken out of the Internet... LOL!), 2 regional US banks are heading for bankruptcy: PacWest and Western Alliance.

And there will be more banks collapsing! :wideyed:

I am willing to hear the next "investment" pitch by the new generation. What will that be? Sneakers??? :ROFL: :cyclops:
 
While the watches blah blah goes on ("info" taken out of the Internet... LOL!)
It's info taken from reality. My friend has some watches he's holding onto longterm (he's got some that have appreciated quite a bit) and another friend of mine bought a Rolex for his son that was made the year he was born. He is keeping it to give him when he is 18. Everyone has their own strategies, like I said, the watches aren't for me, but there is a market for this stuff.

To say there isn't is just ridiculous.
2 regional US banks are heading for bankruptcy: PacWest and Western Alliance.

And there will be more banks collapsing!
I pre-warned you of all this but I was laughed at.

By the way, I apologise for turning this thread into Dickinson's Real Deal :LOL: (UK members will understand).

It wasn't my intention, I promise.
 
The watch has to be limited or sought after in some way if you're looking for an investment piece, such as the "Hulk" Submariner which ran from 2009 to 2020, many of the Daytonas, or simply a vintage one as the rarity is then guaranteed.
Which is exactly what I was saying in my first post - some expert knowledge is required in this game. You can't just go and buy any old Rolex.

But anyway, this seems very anecdotal. Let's leave it at that. You made your point and I made mine.
 
It's info taken from reality. My friend has some watches he's holding onto longterm (he's got some that have appreciated quite a bit) and another friend of mine bought a Rolex for his son that was made the year he was born. He is keeping it to give him when he is 18. Everyone has their own strategies, like I said, the watches aren't for me, but there is a market for this stuff.
You know what people say? Buying something is easy, then go to sell it and you'll see... :ROFL:

It seems paper gains and paper losses are "trendy" lately. But that's not real life. In real life there are gains when you have the money in your pocket.
 

Log in or register to get the full forum benefits!

Register

Register on Tinnitus Talk for free!

Register Now