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“The economy” has always been code for how rich people are doing. So according to the traditional metrics that tell you how rich people are doing the economy is doing great – stock market up, inflation rate declining, unemployment low. But pundits on the left and in the center seemed to be baffled as to why Americans are pessimistic about the economy. On the right if there is a Democrat in the White House the economy is disastrous regardless of any reality.
So I’ll straighten things out with this disconnect.
1. If you are a renter or looking to buy a house you are getting hosed. Rental property owners will hose you just because they can. House prices may be down but your payment is higher due to the Fed rate increases.
2. If you use credit cards, and a lot of people do, and don’t pay them off in full every month, and a lot of people don’t, you are getting screwed by the Fed’s rate increases. If you don’t change your spending habits, which could just be basic necessities on credit, it could cost you several hundred dollars more a month in card payments just paying the minimum than it did just a year ago. And I’ve said this before, if people stopped using credit cards to live outside their means our economy would collapse.
3. Utilities and insurance are through the roof.
4. New one to me but it makes sense, during the pandemic people weren’t spending money as much. Now that spending is back to normal it’s really hitting people on how much things cost during normal times.
5. After many decades of the financial sector cyclically causing recessions and emptying retirement accounts with close to 0 repercussions it’s probably best to never feel good about the economy.
These are just off the top of my head. Probably more to come….
So I’ll straighten things out with this disconnect.
1. If you are a renter or looking to buy a house you are getting hosed. Rental property owners will hose you just because they can. House prices may be down but your payment is higher due to the Fed rate increases.
2. If you use credit cards, and a lot of people do, and don’t pay them off in full every month, and a lot of people don’t, you are getting screwed by the Fed’s rate increases. If you don’t change your spending habits, which could just be basic necessities on credit, it could cost you several hundred dollars more a month in card payments just paying the minimum than it did just a year ago. And I’ve said this before, if people stopped using credit cards to live outside their means our economy would collapse.
3. Utilities and insurance are through the roof.
4. New one to me but it makes sense, during the pandemic people weren’t spending money as much. Now that spending is back to normal it’s really hitting people on how much things cost during normal times.
5. After many decades of the financial sector cyclically causing recessions and emptying retirement accounts with close to 0 repercussions it’s probably best to never feel good about the economy.
These are just off the top of my head. Probably more to come….