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When I moved to Japan in 1984 exchange rate was 245 yen to the USD. A big reason for staying in Japan was the money I was earning - and this was due to a very favorable exchange rate. For many years the USD was well under 120 yen to the USD. And some years well under 100 yen to the USD at which time I made a killing.
Today's exchange rate in Japan (158 yen to the USD) makes me very glad I was able to retire and returned to the US in 2019.
150 yen to the USD would have cut deep into the amount of dollars I could send to my US BOA account
Anyway, my father-in-law is ill and my wife will return to Japan in a few months to visit. I'll give year 11k USD to exchange into yen
She'll give 1M yen to her parents, then buy herself a new laptop, take a trip with her sister/mother and bring what’s left of the yen back the US with her.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by Igor Blevin
I meant to say the dollar has lost 25% of it's purchasing power, not value vs. other world currencies, which have also lost purchasing power post-Covid.
It now takes $5 for the carton of milk that cost $4 in 2019.
Still traveling 50%+ of the time. But drinking less milk
Still eating ice cream ($2.99 sale on Tillamook at Safeway this week)
I have owned 10 properties so have both made and lost money. When I got divorced 3 years ago we sold the house and I immediately bought a condo. So many people that don’t live here and know the market said to rent for a year because you shouldn’t make any big decisions after a big event like divorce. Had I followed that advice I would be living in a studio instead of a 2 bedroom. The market went up a lot in one year.
I invest in oil and sin stocks and index funds and dividend aristocrats/dividend kings to keep up with inflation. My family's oil investments have weathered inflation really well.
I don't invest in anything really (I have a fairly small amount, about equal to 6 years of usual expenses, in a growth fund, which is in Roth, so I don't intend to do anything with it for 20+ years or ever - but no other investments). My retirement is annuity-based, but I have layered my annuities with a view of somewhat substantial inflation (ie, an average of 4% per year for the next 25-30 years). I am 64, fully retired at 60, live in a condo which I own, and have not noticed effects of inflation on my budget so far. The only thing which seems to have increased in price monumentally is eating out, but I do that rarely anyway.
I am a traveler, and do not notice any increase in airfares (which came down after a brief spike around Covid) except for travel to China, and budget accommodations that I typically use have increased their prices minimally. Amtrak and intercity buses have doubled or more than doubled their prices. I live in a large city and don't own a car.
Anyway, I don't think I'll be tremendiusly affected by the rising prices, mostly because I am such a non-consumer. The only issue should be travel, but that has not been too badly influenced in my experience so far. Maybe luxury travel is much more expensive now (I wouldn't know), but budget travel isn't.
A 20-year interval with the largest cumulative inflation in my lifetime was 1967 to 1987. The cumulative inflation was 240% during these 20 years. If you put $340k under the mattress in 1967, it would have had purchasing power of $100k in 1987. But if you were 70 in 1967, maybe you'd be ok with having only $100k in extra purchasing power at the age of 90? I guess that would be the worst likely case scenario for stagflation?
It may be the worst inflation since the 1970s, but it is not worse than the 1970s. I lived it.
As for dealing with inflation, higher bond yields benefit people living on fixed income, provided you were not in long maturities when rates started going up - i.e. you were rate diversified in things like I-Bonds, TIPS, and short term T-Bills.
Just checked the expected auction rate for 1 month bills: 5.3%. This is higher than many money market funds.
No one can predict what will happen to rates going forward, but today real yields are positive.
Long term, the best way to stay ahead of inflation is to invest in stocks. If you cannot stomach the volatility, hold less in stocks. Most advisors recommend 20% minimum for inflation protection over the long term. This is not investment advice - just sharing common wisdom.
It may be the worst inflation since the 1970s, but it is not worse than the 1970s. I lived it.
As for dealing with inflation, higher bond yields benefit people living on fixed income, provided you were not in long maturities when rates started going up - i.e. you were rate diversified in things like I-Bonds, TIPS, and short term T-Bills.
Just checked the expected auction rate for 1 month bills: 5.3%. This is higher than many money market funds.
No one can predict what will happen to rates going forward, but today real yields are positive.
Long term, the best way to stay ahead of inflation is to invest in stocks. If you cannot stomach the volatility, hold less in stocks. Most advisors recommend 20% minimum for inflation protection over the long term. This is not investment advice - just sharing common wisdom.
not even close to the 1970s …we had 25% unemployment , a stock narket that went no where inflation adjusted for 20 years . gas lines , riots and vietnam
not even close to the 1970s …we had 25% unemployment , a stock narket that went no where inflation adjusted for 20 years . gas lines , riots and vietnam
Inflation is outpacing GDP, we're being lied to.
Wouldn't shifting more into commodities be of less risk; and more benefit at our age?
Inflation is outpacing GDP, we're being lied to.
Wouldn't shifting more into commodities be of less risk; and more benefit at our age?
So, you felt compelled to join City Data to make this baseless post?
The US economy grew at 1.6% (not great) in Q1 of 2024 on an inflation adjusted basis. The growth rate in Q3, 2023 was 3.6%. If you have any basis for asserting inflation outpacing GDP growth, share that.
There have definitely been increases in my grocery cost on many items. It doesn't seem to bother me much. I've always been a frugal shopper and have always had ceiling prices for things above which I refuse to pay. I'll just buy/eat something else if I don't like the price (what a concept, right?). I don't shop at the "fancy" grocery store for anything other than produce and fish, and that's for the quality. We buy a lot of our meats at Costco and divvy them up and freeze in 2-person size packages. I cook large meals and we'll eat leftovers for a day or two. Other than groceries, I can't see too much in my financial life that's pinching me just now. Gas prices are up, but not as high as they have been at several times in the past. Utilities are still the same price in our area as they have been for 11 years (when we moved here). We're not selling a home or buying a home, so home prices are irrelevant to us right now. Interest rates are high, but that's a good thing for our money market funds. Stocks are up and down, but we don't try to time things. We're buy and hold people and the strategy has worked fine for us. We rely on multiple streams of income from pensions, SS, and various diverse investments. When something's up, something else is down, and we draw on those accordingly, and only when needed for major purchases. We're frugal and we've lived debt-free, other than a mortgage, and always "a bit" below our means for many years, so most all our needs are covered by our fixed income streams. They're COLA adjusted, but the COLAs do have annual caps. Our retirement is basically unchanged by any kind of "-flation" right now.
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