Buying Advice US/$ at its highest level in twenty years

[ultrarunner]

Will cash ever be King?

It was a phrase I heard all the time as a child and later I found friends and others I knew living quite a life on credit as in buying a new car and rolling in the balance on the current into new loan, stated income home purchases with really nothing down as in credit back after sale... travel, vacations, etc.

 

[MinnesotaEric]

The US has NEVER avoided a recession with employment and inflation at these levels.

Never.

It has always followed within 24 months. If you think this current administration, that still wants to pump more $$ into an overheated economy, will avoid the inevitable by way of genius monetary policy... I think you are high.

I will likely benefit from a recession... but most will not. Many of those, voted for this administration and its policies.

And we've never avoided a recession when short-term T-bill pays more than long term, something that happened back on April 3rd, this year. I cannot wait to see the financial engineering taking place as we march along. For the last 15-months our economy has been like a pop-fly ball, still flying higher, maybe floating, but at some point the undercurrent will make people suspicious of spending.

Anyway, as I shared on Fakebook on April 3rd, "The sky will fall within the next two years if history repeats itself. The two-year T-bill is paying more interest than the ten and thirty-year Treasury Bond. Oh and Russia is no longer accepting payment for energy in dollars."

 

[CloverKnollFarms]

Investors have no optimism... markets are a mess. Have been a mess. Money is being pulled from the markets, and left on the sidelines, because there is no good place to invest.

Mortgage rates are at their highest since 2008? Some expect to see 7-8%.

I’ve seen this movie before.

The market lost half its value. The well off made out well buying at a discount. The average Joe got hammered.

 

[MinnesotaEric]

Investors have no optimism... markets are a mess. Have been a mess. Money is being pulled from the markets, and left on the sidelines, because there is no good place to invest.

Mortgage rates are at their highest since 2008? Some expect to see 7-8%.

I’ve seen this movie before.

The market lost half its value. The well off made out well buying at a discount. The average Joe got hammered.

My first home was at 7 and 7/8% and I thought it was ideal. The kids have no idea how good they've had it!

 

[Bill Guenthner]

My first home was at 7 and 7/8% and I thought it was ideal. The kids have no idea how good they've had it!

13% 1981

 

[newbury]

My second house with my second wife was 12%, adjustable rate, with a 2% upward cap, that was in 1983. When we got it I asked the loan officers if there was a bottom cap and they just laughed. We kept it down to about 6% when we went to a fixed for peace of mind.

 

[MinnesotaEric]

13% 1981

The guy I learned about bonds from participated in that March 30-year T-bill auction from 1981 that paid 21% for 30 years. He told me anytime an auction is over 12% you buy with both hands because that high of interest rate isn't sustainable so either the dollar and the economy collapses and ammo, guns and henchmen are the new asset classes, or the economy rights itself through lower inflation and you giggle while collecting better than market returns on investment.

 

[rScotty]

The guy I learned about bonds from participated in that March 30-year T-bill auction from 1981 that paid 21% for 30 years. He told me anytime an auction is over 12% you buy with both hands because that high of interest rate isn't sustainable so either the dollar and the economy collapses and ammo, guns and henchmen are the new asset classes, or the economy rights itself through lower inflation and you giggle while collecting better than market returns on investment.

My second house with my second wife was 12%, adjustable rate, with a 2% upward cap, that was in 1983. When we got it I asked the loan officers if there was a bottom cap and they just laughed. We kept it down to about 6% when we went to a fixed for peace of mind.

Ah,Yes. Those were good days. The 1980s....the era of Reagonomics. We are headed there again. It was a time of incredible opportunity for people who were not in debt & a time of disaster for those who were. Personally, I didn't qualify for credit - so I simply paid cash for assets & property nobody else wanted. It turned out pretty good.

I tell kids to remember that finances are not simplistic and do not repeat exactly the same. For example, in the 80s there wasn't much cash on the sidelines. Today there is a huge amount of uninvested cash awaiting opportunity. So yes, a Reagonomic type downturn is probably in our future and opportunities will be there....but they will look and be different from what has already been done.

Financial history is cyclical, but don't count on the same downturn yieldng the same events with the same results so soon after the last one. People with money are smarter than that. A lot smarter than that.

As far as investments go, I've not seen ammo, guns, and henchmen pay anything like the profit that more education brings a person.
Sign up for some classes. In anything.

rScotty

 

[Cahaba Valley Farm]

The guy I learned about bonds from participated in that March 30-year T-bill auction from 1981 that paid 21% for 30 years. He told me anytime an auction is over 12% you buy with both hands because that high of interest rate isn't sustainable so either the dollar and the economy collapses and ammo, guns and henchmen are the new asset classes, or the economy rights itself through lower inflation and you giggle while collecting better than market returns on investment.

Yep, I'm patiently waiting for that to return

 

[jyoutz]

My first home was at 7 and 7/8% and I thought it was ideal. The kids have no idea how good they've had it!

My first home had a mortgage rate of 10% (1987), my second home mortgage rate was 7.5% in 1991. Every mortgage I’ve had since then was at progressively lower rates.