Results 1 to 6 of 6

Thread: So what has changed since 1982?

  1. #1
    Join Date
    10-22-01
    Location
    All Over
    Posts
    38,201

    So what has changed since 1982?

    The news of the highest inflation rate since 1982 at 7%. But this isn't 1982 copied.

    In 1982 there were "counter" things taking place---case in point---real estate was depressed because the mortgage rates were out of site (14%+).

    Inflation always hurts those that can least afford another hit---they are consumers of basic sustenance and housing with little beyond life's necessities. It hits them full force, without an increase in income they are forced to reduce the costs of goods and services by an amount similar to inflation.

    For the affluent, the impact is moderated and often reversed because the "norm" is that interest rates rise, which can offset and even exceed their increase in cost of living. At the same time, items that are often bought on margin fall because of the high interest rates---real estate being the most common.

    In 1982 & (3) we bought the house we now live in---at a price that was 62% lower than what it had listed for 1 1/2 years earlier---and took a 14.5% rate mortgage---my father was certain I needed to be committed. That mortgage got redone numerous times and ended up less than 4% before being retired.

    And that is an example of where this occurrence of inflation differs widely---the interest rates have not responded in the same way. Real estate remains high and mortgage rates are low---something that I simply do not understand.

    The same paltry interest rates apply to cash reserves, another former offset for the more affluent.

    As for the politics of it----the writing was on the wall
    "A pessimist sees the difficulty in every opportunity, an optimist sees the opportunity in every difficulty” ---Sir Winston Churchill
    "Political extremism involves two prime ingredients: an excessively simple diagnosis of the world's ills, and a conviction that there are identifiable villains back of it all." ---John W. Gardner
    “You can’t go back and change the beginning, but you can start where you are and change the ending.” ---C. S. Lewis

  2. #2
    Join Date
    10-30-01
    Location
    Salt Lake City
    Posts
    30,650
    Though times (and our country) have changed since Carter's "stagflation" days, we are currently seeing similar gains in wages being offset by inflation. This economic situation is not conducive to Biden winning another presidential election. As with Carter, Americans vote with their wallets.

    Hunter
    I don't care if it hurts. I want to have control. I want a perfect body. I want a perfect soul. - Creep by Radiohead

  3. #3
    Join Date
    10-22-01
    Location
    All Over
    Posts
    38,201
    We (the USA), are not alone in suffering from inflation. Canada is at a 30 year high and the UK is close behind, along with the EU.
    "A pessimist sees the difficulty in every opportunity, an optimist sees the opportunity in every difficulty” ---Sir Winston Churchill
    "Political extremism involves two prime ingredients: an excessively simple diagnosis of the world's ills, and a conviction that there are identifiable villains back of it all." ---John W. Gardner
    “You can’t go back and change the beginning, but you can start where you are and change the ending.” ---C. S. Lewis

  4. #4
    Join Date
    08-05-05
    Location
    Deep inside the Central Scrutinizer.
    Posts
    21,024
    I bought my first house in '82. Paid 63K with an interest rate of 14.5%. Also started my drafting business in '82. My first client was a CPA and he advised me to buy a house.

  5. #5
    Join Date
    10-22-01
    Location
    All Over
    Posts
    38,201
    Quote Originally Posted by Phillbo View Post
    I bought my first house in '82. Paid 63K with an interest rate of 14.5%. Also started my drafting business in '82. My first client was a CPA and he advised me to buy a house.
    I had mentioned earlier that I did exactly the same thing---and at the same rate---my father thought I needed to be committed. We bought that house at 62% of the asking price a year earlier.

    One of the smarter financial moves I have made.
    "A pessimist sees the difficulty in every opportunity, an optimist sees the opportunity in every difficulty” ---Sir Winston Churchill
    "Political extremism involves two prime ingredients: an excessively simple diagnosis of the world's ills, and a conviction that there are identifiable villains back of it all." ---John W. Gardner
    “You can’t go back and change the beginning, but you can start where you are and change the ending.” ---C. S. Lewis

  6. #6
    Join Date
    10-20-02
    Location
    16 miles west of the White House, Northern Virginia..
    Posts
    4,530
    Did the same thing just a little earlier..

    Just found a 13% CD while house cleaning..

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •