The 1970s All Over Again? INFLATION!

By
Real Estate Broker/Owner with Jerry Pinkas Real Estate Experts

 

The 1970s All Over Again? INFLATION!

How much did you pay for groceries last week?

How much did you pay for gas per gallon last week?

Have you seen how much new cars cost?

When you find a new car on the lot, you get to choose from all 4 cars they have, and pay sticker price or over sticker price.

How much did your insurance go up?

We have inflation, guys! The cost of everything is increasing.

Many people have not heard the word or even the mentioning stagflation since the late 1970s.

When oil prices were soaring and inflation stood at more than double its current level.

But stagflation is poised to make a big comeback. It thrives during periods of high inflation and slower economic growth. Kinda like... exactly what's going on right now!

Right now we are seeing a surge in inflation. It’s not ‘transitory’ like the Fed and The Administration have been telling us.

They tell us we have 5% inflation! Really? I have a question for you. How much did you pay for groceries last week? How much did you pay for gas per gallon last week? Have you seen how much new cars cost? When you find a new car on the lot, you get to choose from all 4 cars they have, and pay sticker price or over sticker price for the privilege! How much did your insurance go up?

We have inflation, guys! The cost of everything is increasing.

This reminds me of the movie Wizard of Oz!

Have you ever seen the movie the Wizard of Oz? When Dorothy, the tin man, the cowardly lion and to go to see the Wizard. They find a man, pulling the levers and you hear the speaker system blurting out “don’t worry folks, it's going to be all right, Ignore the man behind the curtain!”

There is good news at the end of the rainbow if you know what actions to take. You have to use your mind. You have to think. You have to have multiple streams of income or leverage yourself with hard assets.

Example: How much did the value of your home go up? That’s the good news portion of inflation. If you are an owner. Some people will be left out. We will dive into that in a movement.

What we are really seeing is inflation is way past 5% guys!

Inflation is here and sustained. It is not slowing down and will continue for the next several years.

Tell me anything you bought last year, that cost less than it did the year before. Think about everything! Now in the comments below tell me went up this year. What did you pay more for? For the most part, just about everything is more costly now, than it was in the past.

It costs much more to live this year than it did last year. Guess what. It's going to cost more next year than it cost this year.

 

I have good news for you, and I have bad news for you. It's the truth. You may not want to hear it, but it's the truth.

The economy is not growing.

Inflation IS increasing. That's stagflation.

They are keeping this quiet. But You are going to be seeing the word inflation and stagflation, much more next year.

The windshield on your car is big. The rearview mirror is small. News is what already happened, like the rearview mirror. Drive off the road if you only look at a small rearview mirror and don't watch where you are going.

But you are smart. You can make smart moves now, that will put you in a good position.

Some people are oblivious to what is really happening!

Consumer prices rose at an annual pace of 5.4% last month, on track for their highest annual gain since 1990, a surge that analysts have pinned on everything from soaring commodity prices.

Meanwhile, third-quarter U.S. economic growth is expected to fall to 2.7%, from the prior quarter's 6.7% rate.

Many economists believe stagflation is inevitable.

The Federal Reserve has said companies who rise prices will prove temporary. Why?

Businesses over raise the cost of a product because the materials cost more, shipping costs are more because gas prices are higher. They have to raise the price of that product because it costs more to manufacture and get to the public. The price increase is only temporary comfort because now everyone else has to raise their prices, to compensate for all of the other things that are now costing more. It’s a dog chasing its tail. It keeps going. Companies that continue to pass on rising costs to consumers, including energy and industrial firms.

Pretend you own a second home. Pretend you bought it at $300,000. Pretend the price went up to $350,000 this year. You financed it and locked it in at a fixed monthly payment with a low-interest rate, for 30 years. Better yet, you rent it out and someone else is paying your mortgage and paying for your property. Because we have this inflation, the properties value continues to increase. Can you see where an average common person has been able to get ahead?

What about those who are not in a position to do the same?

What about those who know this information, but still choose to not move forward.

Inflation erodes any purchasing power… Unless you are the owner! Rents usually increase and keep pace with inflation.

In the late 1960s and 1970s. Spiking oil prices, rising unemployment, and loose monetary policy pushed the core consumer price index up to a high of 13.5% in 1980, prompting the Fed to raise interest rates to nearly 20% that year.

Stagflation in the 1970s was driven by factors of higher oil prices and constricted supply. Sounds kinda like today?

I’m going to tell you the truth. It may not be what you want to hear but it's the truth.

If next year, if we are still sitting with these inflation levels and growth, hasn't picked up, you could feel the pinch. Like you are playing musical chairs and someone else is sitting in your seat. Some people will be standing and others will be comfortably seated.

It's the late 1970’s and early 80’s Again! Back then I was a newspaper boy and saw the headlines every day. I have a true story for you.

I had an uncle, Farmer, who worked hard, trying to get ahead.

Bought hard assets during this time of inflation.

Farm equipment which he resold, because prices of new equipment cost more. he made a profit. He bought houses. Purchase at $50,000 sold at $60,000. Parlayed that into the next property and bought a house at $70,000 and sold at  $80,000 Then bought at $100,000 and sold at $120,000. Just think about what those houses are worth today!

The most common thing we hear every day is: I would have, could have, should have. Remember when that property was… Now its…. Did you see what your neighbor's house just sold for? 

Remember what you paid for your first house? It was expensive back then and was a struggle, but you were glad you bought it back then.

It's never easy. It's never cheap enough. Looking back, the good old days are today.

Posted by

Coastal Carolinas Top Real Estate Firm - Serving Myrtle Beach, North Myrtle Beach, Surfside, Garden City, Murrells Inlet, Loris, Longs, and Conway SC

 

Jerry Pinkas Real Estate

Jerry Pinkas Real Estate Experts

https://www.jprealestateexperts.com/

https://www.myrtlebeachcondoforsale.net/

 

 

843-839-9870 - 604 N. 27th Ave. Myrtle Beach, SC 29577 

 

Helping Sellers and Buyers Achieve their Dreams

Visit our website http://www.homeguidemyrtlebeach.com for more information.

 

 

 

 We Look Forward to Answering Your Questions and Helping YOU... Talk Soon!

 

 

Comments (5)

Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Jerry - it is nice to "see" you here.  As for the a return to the days of the 1970s and stuff that may not be so fondly remembered --- things can certainly make a return appearance but those things seem to come back in a different, yet kinda familiar, way.  

Oct 28, 2021 09:53 AM
Jerry Pinkas 843-839-9870 HOMEGUIDEMYRTLEBEACH.COM

So True! Thanks for commenting and glad to be back and see you again! 

Oct 28, 2021 12:13 PM
Michael Jacobs

😎

Oct 28, 2021 02:33 PM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Low interest rates cannot last forever. I remember when mortgage rates were 18% and people walked around with WIN buttons on their lapels (Whip Inflation Now). There are always economic cycles. Inflation is inevitable...it is the rate of inflation at any given time that can be troublesome. 

Oct 28, 2021 08:06 PM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

You left out the what factor, didn't you? What caused the spike in inflation? Was it a person, place, or thing? We're living in a WOKE culture, so, people with answers are afraid to speak up because of the consequences they would endure from the progressive media, or am I simply overstating an erroneous perception? 

Oct 28, 2021 09:19 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hi Jerry... I'm old enough to remember the 60's, 70's, 80's, etc. And I'm appalled at what we are living (reliving) through now.

Oct 29, 2021 06:13 AM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Jerry- Happy to see you here as well. I, like Nina Hollander, Broker remember those years and we lived through them. The biggest difference I see is what appears to be a move toward socialism. Being WOKE and politically is highly overrated and overused. 

Oct 29, 2021 11:09 AM