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TheCountOfNowhere

The rampant inflation preppers thread...

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6 minutes ago, TheCountOfNowhere said:

Massive inflation will cause rates to go up and prices to go down. 

No, massive inflation will cause rates to go up and (nominal) prices to go up.

 

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17 minutes ago, TheCountOfNowhere said:

Massive inflation will cause rates to go up and prices to go down. 

Tins of beans will fare better.

As AWW said; if you trash the currency then everything denominated in that currency goes up in its nominal value.

We have had 23 years of governments wanting to prop up house prices and devalue the currency by inflation so why do you think that we are going to go back to the financial rules of the 70s, 80s and early 90s when a rise in inflation automatically resulted in a rise of interest rates to reduce inflation?  We aren't.

The government wants inflation to sit above interest rates for a long long time in order to reduce the real value of government, corporate and personal debt.

The rules have changed.

Houses may not be a brilliant investment, to put it mildly, but they are far better than holding cash in such times.

 

10 minutes ago, AWW said:

No, massive inflation will cause rates to go up and (nominal) prices to go up.

 

 

6 minutes ago, TheCountOfNowhere said:

Have a look at Turkey, nominal prices have gone through the floor.

I don't think that a good comparison.

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6 minutes ago, Frank Hovis said:

As AWW said; if you trash the currency then everything denominated in that currency goes up in its nominal value.

Houses may not be a brilliant investment, to put it mildly, but they are far better than holding cash in such times.

 

 

I don't think that a good comparison.

Depends on the savings rates, use to see 12% on savings.  I'd hold that over a house that's going down in nominal terms.

The trouble with such low IRS is that prices are at extremes, any rise will see a big fall in nominal prices.  You might be able to offset that with rising wages but rising costs take away your spending power very quickly. 

 

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1 minute ago, TheCountOfNowhere said:

Depends on the savings rates, use to see 12% on savings.  I'd hold that over a house that's going down in nominal terms.

The trouble with such low IRS is that prices are at extremes, any rise will see a big fall in nominal prices.  You might be able to offset that with rising wages but rising costs take away your spending power very quickly. 

 

You assume that the government will behave in a responsible way to protect the currency.

I can't find a more up to date chart than this but here is CPI, not even RPI, against interest rates.  There was not a flicker from the BoE even when CPI breached 5% in 2011.

Up to June 2008 your reasoning would have been impeccable.  Now it's history.

 

inflation-interest-rates.png

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2 minutes ago, Agent ZigZag said:

Im slowly building up my garage workshop that extends from bike parts and tools, car to house 

Remember after 2008, decent quality rear cassettes and mechs going from reasonably priced to silly money overnight as the price more than doubled.

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19 minutes ago, Frank Hovis said:

You assume that the government will behave in a responsible way to protect the currency.

I can't find a more up to date chart than this but here is CPI, not even RPI, against interest rates.  There was not a flicker from the BoE even when CPI breached 5% in 2011.

Up to June 2008 your reasoning would have been impeccable.  Now it's history.

 

inflation-interest-rates.png

I assume the government will have no choice.

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2 minutes ago, TheCountOfNowhere said:

I assume the government will have no choice.

Maybe.

The UK and EU have however been trying to stoke inflation for ten years now without success; they certainly won't be rushing to choke it off as soon as it appears because they want those debts devalued.

There inevitably will be a time when interest rates have to again rise to decent levels which will, I agree, crash the housing market but there is going to be a huge amount of currency devaluation before we get to that point so you do not want to be holding cash as your home buying fund. You want something that won't be eroded by inflation.

Baked beans are certainly that but they have difficulties related to transportation, storage and resale.

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Posted (edited)

Other than precious metals and shares, I'm 'investing' in the following,  mostly bought second hand, to be as self-sufficient as possible:

- How to books (foraging etc)
- Tools
-  Garden equipment
- Good quality household items (kitchenware etc)
- Good quality practical clothing and footwear (mostly Grade One military surplus)
- Bicycle parts
- Seeds and edible plants (mostly perennials and hardy bi-annuals)
- Unarmed combat classes
 

Edited by Austin Allegro

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There is a thread growing here in its own right. Essential tools needed/required for the home workshop.

You dont see it much nowadays but an older generation had a back shed with every screw and nail carefully stored in its own appropriate coffee jar, with a small workbench and vice with hammers saws spanners carefully arranged on the wall

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1 hour ago, Austin Allegro said:

Other than precious metals and shares, I'm 'investing' in the following,  mostly bought second hand, to be as self-sufficient as possible:

- How to books (foraging etc)
- Tools
-  Garden equipment
- Good quality household items (kitchenware etc)
- Good quality practical clothing and footwear (mostly Grade One military surplus)
- Bicycle parts
- Seeds and edible plants (mostly perennials and hardy bi-annuals)
- Unarmed combat classes
 

Green house.

Beer/wine making kit.

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1 hour ago, Austin Allegro said:

Other than precious metals and shares, I'm 'investing' in the following,  mostly bought second hand, to be as self-sufficient as possible:

- How to books (foraging etc)
- Tools
-  Garden equipment
- Good quality household items (kitchenware etc)
- Good quality practical clothing and footwear (mostly Grade One military surplus)
- Bicycle parts
- Seeds and edible plants (mostly perennials and hardy bi-annuals)
- Unarmed combat classes
 

So far in the lockdown I have made:

Butter

Jam

Bread or various sorts ( bloomer, baguettes, focaccia, pizza, tin )

Meringues

Chrunchie bar style sweets.

Pizzas

Currently growing a range of veg that I may or may not get to taste.

All very easy, all very tasty, it's the way ahead I feel.

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2 hours ago, Frank Hovis said:

Maybe.

The UK and EU have however been trying to stoke inflation for ten years now without success; they certainly won't be rushing to choke it off as soon as it appears because they want those debts devalued.

There inevitably will be a time when interest rates have to again rise to decent levels which will, I agree, crash the housing market but there is going to be a huge amount of currency devaluation before we get to that point so you do not want to be holding cash as your home buying fund. You want something that won't be eroded by inflation.

Baked beans are certainly that but they have difficulties related to transportation, storage and resale.

Afraid i agree with Frank @TheCountOfNowhere

Rates are on the floor permanently. The only way rates will ever rise again is if there is a currency collapse. And by that i mean hyperinflation, and thats specific to the UK relative to the rest of the West. If the west hyperinflates (or just inflates) all together they'll cut rates more and print more trillions. 

Currency is worth shit, just hold your nose and buy a property. Or Bitcoin.

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1 hour ago, Green Devil said:

Afraid i agree with Frank @TheCountOfNowhere

Rates are on the floor permanently. The only way rates will ever rise again is if there is a currency collapse. And by that i mean hyperinflation, and thats specific to the UK relative to the rest of the West. If the west hyperinflates (or just inflates) all together they'll cut rates more and print more trillions. 

Currency is worth shit, just hold your nose and buy a property. Or Bitcoin.

That's what's coming. It always does. Mortgage rates will be up well before that id wager 

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6 hours ago, Frank Hovis said:

As AWW said; if you trash the currency then everything denominated in that currency goes up in its nominal value.

We have had 23 years of governments wanting to prop up house prices and devalue the currency by inflation so why do you think that we are going to go back to the financial rules of the 70s, 80s and early 90s when a rise in inflation automatically resulted in a rise of interest rates to reduce inflation?  We aren't.

The government wants inflation to sit above interest rates for a long long time in order to reduce the real value of government, corporate and personal debt.

The rules have changed.

Houses may not be a brilliant investment, to put it mildly, but they are far better than holding cash in such times.

 

 

I don't think that a good comparison.

I know where you are coming from, but I think you are slightly out.

Housing is a good wage hedge. It's not a great inflation hedge - theres too many houses around me that are the same price as 2006ish.

Housing has become a reflection on banks idiot lending. That is now over and prices are treading fresh air.

A medium priced house is a good hedge.

However it comes down to how much debt you or the other home owners if your street have.

A large / expensive house I.e 400k+ of mortgage  is prob a one way ticket to bankruptcy.

I'd expect wages to lag inflation only by  bit. Anyone with lots of mortgage debt will be swallowed by a tsunami of debt.

 

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17 hours ago, Frank Hovis said:

Another house.

Too noticeable and taxable.  Maybe just the materials in a field somewhere!

Also depends on the currency.  We've already had a HPC as far as most of the world is concerned.  Maybe more to come.

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