# One way the Feds could help us fight inflation



## Brookswood (Apr 12, 2022)

I think we should start a nationwide movement to raise the purchase limit on I-bonds from $10,000 a year to at least $50,000 a year. 

Our 8%+ inflation rate is ravaging the savings of everybody, from young folks saving to buy their first home, to we older folks who are seeing the value of our retirement savings being savagely cut down by this inflation. 

One way to fight back is to purchase I-bonds from the Treasury, but we are limited to $10,000 a year, plus up to $5,000 extra as part of an income tax refund.   Raising that low limit to at least $50,000 would give us a way protecting at least some of our assets.


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## Liberty (Apr 12, 2022)

Waiting to get some decent CD interest.  That could come later this year after the feds ladder up the interest rates.  Gotta hope the market doesn't tank though,  as I smell a recession coming.


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## Pecos (Apr 12, 2022)

Brookswood said:


> I think we should start a nationwide movement to raise the purchase limit on I-bonds from $10,000 a year to at least $50,000 a year.
> 
> Our 8%+ inflation rate is ravaging the savings of everybody, from young folks saving to buy their first home, to we older folks who are seeing the value of our retirement savings being savagely cut down by this inflation.
> 
> One way to fight back is to purchase I-bonds from the Treasury, but we are limited to $10,000 a year, plus up to $5,000 extra as part of an income tax refund.   Raising that low limit to at least $50,000 would give us a way protecting at least some of our assets.


That is a wonderful idea and I am totally with you. The pathetic interest rates on savings accounts and money market account is almost criminal when compared to what they are charging on their loans.


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## Pecos (Apr 12, 2022)

Liberty said:


> Waiting to get some decent CD interest.  That could come later this year after the feds ladder up the interest rates.  Gotta hope the market doesn't tank though,  as I smell a recession coming.


You may well be right about the market. What we see these days is scary.


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## Don M. (Apr 12, 2022)

Brookswood said:


> I think we should start a nationwide movement to raise the purchase limit on I-bonds from $10,000 a year to at least $50,000 a year.


I agree, somewhat.  I bonds are currently paying a bit over 7%....far more than any bank accounts or CD's.  However, if people were allowed to purchase large quantities of these bonds, how would our already "deeply in debt" government pay such a huge rate of interest?

Our entire economy is in stress not seen in over 40 years.


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## oldman (Apr 12, 2022)

The WSJ and Barons are predicting that the Fed may be raising interest rates as many times as 11 times over the next few years. That will definitely drive housing prices down, so that buyers can afford the cost of a purchasing a better home than they have now.

I knew Powell was a bad choice to head the Fed. He’s been begging for that job for years.

https://www.barrons.com/articles/fed-rate-hikes-11-51647535197


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## Don M. (Apr 12, 2022)

If the economy continues it's present path, the Fed may have to raise its rates to levels not seen since the early 1980's..  

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart


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## Pecos (Apr 12, 2022)

Don M. said:


> If the economy continues it's present path, the Fed may have to raise its rates to levels not seen since the early 1980's..
> 
> https://www.macrotrends.net/2015/fed-funds-rate-historical-chart


Ouch. You may be right.


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## Liberty (Apr 13, 2022)

Don M. said:


> If the economy continues it's present path, the Fed may have to raise its rates to levels not seen since the early 1980's..
> 
> https://www.macrotrends.net/2015/fed-funds-rate-historical-chart


At least then the CD's paid good...lol


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## oldman (Apr 13, 2022)

Don M. said:


> If the economy continues it's present path, the Fed may have to raise its rates to levels not seen since the early 1980's..
> 
> https://www.macrotrends.net/2015/fed-funds-rate-historical-chart


Raising rates may slow the economy, but along with that comes the possibility of increasing the chances of a recession. We saw that happen during the Carter years. It’s a damned if you do and a damned if you don’t situation.

The prices of gas, food, etc. all started with the rise of wages. Had that not happened, needless to say, the economy would have continued to run on all 8 cylinders as it was prior to the rise in wages. Jobs that were paying $8-10 were not meant to support a person’s lifestyle, but only to add as a second income, or for those people like high school kids, looking for some spending money. 

We are a capitalistic society, so that allows companies to make as much money as they are capable of making. Most companies could have absorbed the rise in wages without raising prices, but became addicted to making (hypothetical) 40 cents on every dollar invested in their company, instead of (hypothetical) 25 cents they would have made had they absorbed the cost of the rise in wages. Shareholder values would have decreased, which is never good for a company that has been used to being listed on the top 100 index.

Bottom line is that we are a greedy society. The more a company makes, the more they want to make. Examples: Amazon, Facebook. Then, when people fight back and ask for more money, it’s like pulling teeth. You would think the money is coming from their pocket.


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## Timewise 60+ (Apr 13, 2022)

If the Federal Government would just let the free market work, all would be well!  When they jump in a start manipulating prices, stopping production, forcing exports on us, etc.  Nothing good comes from it!   That is the difference between Free Market Economics and Socialized Economics...the governments always screw up the economy...


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## SeniorBen (Apr 13, 2022)

We have inflation because there is a huge demand for goods, partially because of the stimulus checks sent out to everyone regardless of need, which provided people with surplus cash. Couple that with a shortage of goods because of supply chain disruptions resulting from a shortage of workers and other factors, mainly caused by the covid-19 pandemic. It's all just basic supply and demand economics. And greed. Many industries are raking in record profits, just because they can charge whatever they can get away with.


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## Timewise 60+ (Apr 13, 2022)

Senior Ben....in our country _businesses have always been able to charge whatever the market will bear_.... that is one side of the Free-Market System we live by.   You do recall what happened when an American President put price controls in?  I remember waiting in line to get gas in my car so I could work...!  

Now we have a 60-day halt on all new oil and gas leases on federal lands and the cancellation of the Keystone XL Pipeline.

These actions have had both direct and indirect impacts on oil and gas companies and increased the need for America to purchase foreign gas and oil at higher prices. This of course is driving up the cost of gas and oil nationwide. Couple that with the war Russia started, thus limiting worldwide available oil inventories. You can bet prices will continue to go up!

Couple that with the eliminating regulations that…


Now ensure oil and gas companies pay government penalties on any added production.
And requiring that current funding be stopped to maintain shipping lanes on rivers throughout America used to transport gas and oil in America.
Again, driving the transportation cost and government fees that will be added costs at the gas pump!
I agree that the Covid and pipeline have also added to this problem, as you say basic supply and demand.  But the areas above hit us all at the gas pump immediately.   We have yet to feel the full impact of the supply chain shortages....

Do your own research, this all is easy to check out...


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## Paco Dennis (Apr 13, 2022)

Timewise 60+ said:


> If the Federal Government would just let the free market work, all would be well!  When they jump in a start manipulating prices, stopping production, forcing exports on us, etc.  Nothing good comes from it!   That is the *difference between Free Market Economics and Socialized Economics*...the governments always screw up the economy...


Is this what you mean?

_"Socialism for the rich and capitalism for the poor_​
_ *Socialism for the rich and capitalism for the poor* is a classical political-economic argument  asserting that, in advanced capitalist societies, state policies assure that more resources flow to the rich than to the poor, for example in the form of transfer payments.[1]
The term corporate welfare is widely used to describe the bestowal of favorable treatment to big business (particular corporations) by the government. One of the most commonly raised forms of criticism are statements that the capitalist political economy toward large corporations allows them to "privatize profits and socialize losses."[2] The argument has been raised and cited on many occasions.
Variations of the concept, include privatize profits/gains and socialize risks/losses/debts; and markets, free enterprise, private enterprise and capitalism for the poor while state protection and socialism for the rich._
_Contents_​
_1 History and usage_
_2 See also_
_3 References_
_3.1 Sources"_

https://en.wikipedia.org/wiki/Socialism_for_the_rich_and_capitalism_for_the_poor


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## Brookswood (Apr 13, 2022)

Back in the late 70s and early 80s we had high, often double digit interest rates, but that also included high savings rates.   I remember buying a 10 year T-Bill at double digit rates. 

Today, a local independent bank is advertising it's * High-Rate CD* of ........ wait.... here it is.......    0.75%. WOW!  This on the same day I learned we had 8.5% inflation in the last 12 months.   Frankly, it's an insult to my intelligence to tell me that 0.75% is high.


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## SeniorBen (Apr 13, 2022)

... adding to the demand part of the inflation equation, we currently have extremely low unemployment (somewhere around 3.6%) from the strong economy, so people have money to spend but there's a shortage of goods, so prices go up. Since people are willing to pay the higher prices, there's no reason for them to fall. They're at the point of equilibrium where profits are maximized. A month from now, that point might be even higher.


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## HarryHawk (Apr 15, 2022)

We think we have problems now --

_The growth in interest costs presents a significant challenge in the long-term as well. According to CBO’s latest projections, interest payments would total around $60 trillion over the next 30 years and would take up nearly one-half of all federal revenues by 2050. Interest costs would also become the largest “program” over the next few decades — surpassing all discretionary spending in 2043, Medicare in 2043, and Social Security in 2045.

https://www.pgpf.org/analysis/2022/...ill-raise-interest-costs-on-the-national-debt_


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## Timewise 60+ (Apr 15, 2022)

Paco Dennis said:


> Is this what you mean?
> 
> _"Socialism for the rich and capitalism for the poor_​
> _ *Socialism for the rich and capitalism for the poor*_


Come on Paco...I think you are smarter than this.  You could not have got this 'anti-Capitalism' definition without 'QUALIFYING IT' e.g...."for the rich and capitalism for the poor"

So quit the bull, no one will buy your rhetoric.   Maybe an economics 101 class might help you understand why your qualified definition is something only a Socialist would comment on!  It is not a perfect system and in the USA we have a mix of Capitalistic and Government Controlled Economy...but using your source...Wikipedia...

*"Capitalism* is an economic system based on the private ownership of the means of production and their operation for profit.  Central characteristics of capitalism include capital accumulation, competitive markets, price system, private property, property rights recognition, voluntary exchange, and wage labor.   In a capitalist market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets."


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## Paco Dennis (Apr 15, 2022)

You call it bull, but it is the truth. Your a free democratic person making your own choices until you enter the place your employed, then your a slave to the financial interests of your superiors who are making gobs of money from your labor.  PROFITS over PEOPLE...it is the definition of capitalism....and yet money flows from the elite classes who make the laws that govern how money is distributed. Greed and power rule in a capitalist system, it happens every time. The dollar has run it's course, it is dying. So lets keep it alive by building more weapons to send to the world to fight the evil socialists. Stupid.


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## Jace (Apr 15, 2022)

Yes, but what about _the rest of us?_


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## Alligatorob (Apr 15, 2022)

From my non-expert point of view the only thing I can see that our government can do to slow or stop inflation is to stop printing and spending money we don't have.

I think the cause of inflation is an oversupply of money and an undersupply of goods.  The government can only control the first.

All else seems to me to just be rearranging deck chairs on the Titanic...


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## Paco Dennis (Apr 15, 2022)

Jace said:


> Yes, but what about _the rest of us?_


Decouple. Downsize...like many are trying to do now, eat for nutrition not pleasure alone, shop less, save as much filthy lucre to make ends meet and have a nest egg over at least $1000, enjoy simple inexpensive stuff ( nature, animals, pets, etc ), DYI fixes whenever possible, etc.... Inflation is coming on strong. Throwing more money at it will make it worse, and we have no REAL resources to build an economy anymore. I am preparing for some hard times in the near future.


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## SeniorBen (Apr 15, 2022)

Paco Dennis said:


> Decouple. Downsize...like many are trying to do now, eat for nutrition not pleasure alone, shop less, save as much filthy lucre to make ends meet and have a nest egg over at least $1000, enjoy simple inexpensive stuff ( nature, animals, pets, etc ), DYI fixes whenever possible, etc.... Inflation is coming on strong. Throwing more money at it will make it worse, and we have no REAL resources to build an economy anymore. I am preparing for some hard times in the near future.


The paradox of cutting down and spending less is it will slow the economy and people may lose their jobs, which will put a greater strain on entitlement programs, although considering there is a worker shortage, it will take a while to get to that point. Okay, let's cut down!


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## Timewise 60+ (Apr 15, 2022)

Paco Dennis said:


> You call it bull, but it is the truth. Your a free democratic person making your own choices until you enter the place your employed, then your a slave to the financial interests of your superiors who are making gobs of money from your labor.  PROFITS over PEOPLE...it is the definition of capitalism....and yet money flows from the elite classes who make the laws that govern how money is distributed. Greed and power rule in a capitalist system, it happens every time. The dollar has run it's course, it is dying. So lets keep it alive by building more weapons to send to the world to fight the evil socialists. Stupid.


Paco, not sure what you are drinking, but most companies in America are owned by people who by their stocks.  That includes employees who participate in purchasing company stock and the company frequently gives employees incentive money to purchase their companies stock.  So they are not only employees, but owners also.  You cannot be educated in America, you are preaching the teaching of communism...where did you get all this from?  I worked over 45 years in American businesses not one but many.  I started in the mail room with only a high school education, yet I purchased a little stock every month.  Now that I am retired, that is an important part of my retirement.  This has been and is still open in America to all who pursue it!  Time to wake up and smell the roses....seek and you will find!


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## StarSong (Apr 15, 2022)

Timewise 60+ said:


> Paco, not sure what you are drinking, but most companies in America are owned by people who by their stocks.  That includes employees who participate in purchasing company stock and the company frequently gives employees incentive money to purchase their companies stock.  So they are not only employees, but owners also.  You cannot be educated in America, you are preaching the teaching of communism...where did you get all this from?  I worked over 45 years in American businesses not one but many.  I started in the mail room with only a high school education, yet I purchased a little stock every month.  Now that I am retired, that is an important part of my retirement.  This has been and is still open in America to all who pursue it!  Time to wake up and smell the roses....seek and you will find!


It's difficult to take your words seriously because your arrogant, condescending tone comes screaming through your posts.  

Please be respectful of other people's opinions and points of view.


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## Timewise 60+ (Apr 16, 2022)

StarSong...providing information to people who do not have that information is important.  

I agree that my delivery on that last message should have been framed differently.  You of course can take what I offer about business and consider it or not.  That is up to you!  Have a nice Easter holiday...


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## Don M. (Apr 16, 2022)

SeniorBen said:


> We have inflation because there is a huge demand for goods, partially because of the stimulus checks sent out to everyone regardless of need, which provided people with surplus cash.


Yes, but you have to understand that the politicians think that the Only way to fix a problem is to "throw money at it".


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## Paco Dennis (Apr 16, 2022)

StarSong said:


> It's difficult to take your words seriously because your arrogant, condescending tone comes screaming through your posts.
> 
> Please be respectful of other people's opinions and points of view.


Sorry if it seems that way. I do have a definite soar spot when it comes to war and how big money/business/corporations benefit from misery. From personal experience they have had a major role in affecting my life, and not in a beneficial way. It is very hard for me to not be angry at them ( not any of you all )...it is very difficult to express how upset I am with their practices. I am working at being civil about it all...i will tone it down....thanks.


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## StarSong (Apr 16, 2022)

Paco Dennis said:


> Sorry if it seems that way. I do have a definite soar spot when it comes to war and how big money/business/corporations benefit from misery. From personal experience they have had a major role in affecting my life, and not in a beneficial way. It is very hard for me to not be angry at them ( not any of you all )...it is very difficult to express how upset I am with their practices. I am working at being civil about it all...i will tone it down....thanks.


My remarks weren't directed at you, @Paco Dennis.


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## Paco Dennis (Apr 16, 2022)

StarSong said:


> My remarks weren't directed at you, @Paco Dennis.


Yea, after I posted I saw. I put on the coat though and for good reason. My mood has been in the dumps the past few weeks and I have been frustrated. So your words kind of broke the dam for me. Maybe you killed two birds with one stone.


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## Timewise 60+ (Apr 17, 2022)

Paco..please don't feed the animals!  

Also, businesses and corporations are run by individual people.  For me it is easier to deal with them when I realize that I am not fighting a big monster, but a few men and women...


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## Paco Dennis (Apr 17, 2022)

Timewise 60+ said:


> Paco..please don't feed the animals!
> 
> Also, businesses and corporations are run by individual people.  For me it is easier to deal with them when I realize that I am not fighting a big monster, but a few men and women...


Ok ...who is the "animals"?

I understand. Misa's son is a general manger . Used to work for Kroger, but now runs  a co-op type store in Lawrence Kansas. We hear from him often, and love him deeply, so I get the whole thing. I have been on a toot the past few weeks and am trying to quit being so extreme. It is a tough line "being" what you are, and and being civil.


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## Timewise 60+ (Apr 18, 2022)

Paco....the only complaint I have received is on that one post!  I cannot please all the people, all of the time and be honest...


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## mathjak107 (Apr 23, 2022)

Cash instruments have had negative real returns regardless of rates for the last 40 years for about 75% of the years .

higher rates only mean we are fighting higher inflation .

zero interest in 2% inflation is better than 5% in 9% inflation


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