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Americans are bracing for inflation and a market crash: survey:
Inflation and a potential stock market crash. These are the two biggest threats to the US economy and to the financial wellbeing of Americans, so says a survey by personal finance software firm Quicken.
The Menlo Park, Calif.-based Quicken/SurveyMonkey online poll was taken earlier this month, which consisted of a sample of 1,200 US adults ages 18 to 74 from the Cint Consumer Network, according to Quicken's press release.
The survey revealed that nearly three-fourths who responded to the survey (71%) ranked inflation (currently at 7% and the highest since the early 1980s), as the top concern, followed by new COVID-19 variants, supply chain disruptions and a stock market crash. On that last point, the survey noted that 52% surveyed agree that there will be a stock market crash in the next five years. Of that group, 58% expect a looming stock market crash will impact their finances negatively, according to the press release.
Yet not everyone views a potential crash as such a bad prospect. Some Americans saw the financial gains that more aggressive investors had made from the day of the 2008 stock market crash, and are now looking to capitalize for the next one. According to the press release, 52% of self-described "aggressive" investors are likely to say the 2008 crash benefited them financially, compared to 18% of so-called "conservative" investors. What's more, 71% of aggressive investors, compared to 20% of conservative investors, believe a stock market crash in the future would benefit them financially. A notable percentage of respondents who believe there's going to be a crash in the next five years – 35% – agree that they're waiting for a crash in order to invest some extra cash.
A sizable percentage of younger adult generations surveyed – Millennial and Gen Z – also see the benefits to a future stock market crash. According to the survey, 41% of Gen Z and 36% of Millennials agree that they are waiting for a stock crash in order to invest their extra cash. Another 30% of Gen Z and 28% of Millennials say they're waiting for a crash so that they can start investing, according to the press release.
(Score: 2, Troll) by crafoo on Sunday January 23 2022, @10:03AM (6 children)
The fed cannot raise interest rates high enough to counter inflation. The maintenance on the debt is too high. The national government would immediately collapse as they would not be able to pay the interest, let alone have money to keep the lights on. Failure to pay the interest, I know I don't have to tell you, means the USD collapses and the entire 1st world's economy along with it.
On a side note: the way inflation is calculated has changed significantly since the 70s. They exclude things like FUEL and FOOD and a % of the top and bottom commodities from the calculation now. Our real inflation is ~15%; worse than the 70s. Since inflation is year-over-year calculation, 2022 will look better, but that's because it isn't accelerating as hard as 2021. It's a out of control rocket upward. Hahahah, and of course, they are changing the inflation calculation AGAIN... to make the numbers smaller :) Of course. Fix the problem? No. change the calculation and just lie
Finally, I'm sure you all know about the reverse repo market, which is now a permanent and continuous thing. The Fed can't raise interest above inflation, which would be required to counter inflation. What they can do is start divesting assets. Mortgage-backed assets in an attempt to pull money out of circulation and counter asset inflation. This is going to absolutely crater the real estate market this year, starting around March. It's the only thing they can do though.
In these times you want to own real assets. Not companies that produce assets, you want to own the actual assets. The worst thing to do is to hold cash.
Stagflationary depression OTW. Hope you are ready.
P.S. keep voting for "free" money you god damn commies. See what happens.
(Score: 2) by crafoo on Sunday January 23 2022, @10:17AM (4 children)
Real estate is still your best long-term bet. If you can afford it, and you can get a 30 year loan now, do it. It's free money.
If you're in REITs or a real estate ETF and you aren't already out... sorry.
(Score: 3, Insightful) by Common Joe on Sunday January 23 2022, @10:52AM (1 child)
Real estate is good as long as the population in the world keeps increasing. That will change soon. And with everything costing so much, the population change in the U.S. may also decline. That will upend real estate for sure.
(Score: 0) by Anonymous Coward on Monday January 24 2022, @08:25PM
Thank god for encroaching coastlines and reduced habitable area amiright? (i.e. less land for fewer people, so values continue to climb forever!)
(Score: 0) by Anonymous Coward on Sunday January 23 2022, @04:15PM (1 child)
Can you explain why real estate is good but REITs are bad?
Higher interest rates should cause the prices of both to fall. No?
(Score: 1) by khallow on Sunday January 23 2022, @05:45PM
I think the missing part (or maybe part of the missing part) is that you don't need debt to own real estate while a fair portion of REITs are really bond issuing entities and hence, on the opposite side from owning hard assets when it comes to the impact of inflation.
(Score: 1, Informative) by Anonymous Coward on Sunday January 23 2022, @06:08PM
The inflation rate is much higher than they say, but not for the reasons you say. There are good reasons to exclude fuel. Yes, it's a thing that real people buy and the price matters, but it's impossible to use it for inflation because the price fluctuates so much. You can't really even look at historical prices because it's a non-renewable resource. Food, at least, can be viewed historically, since you can always grow more crops and livestock.
The real reason is that they take credit for advancing technology. When things like computers or TVs get better, they fudge the price to make it look like inflation is less. Of course this has nothing to do with monetary policy at all, it's just a way of making the numbers look better. And in some cases (especially TVs) the advancing technology not only makes them better, but it actually makes them cheaper too. No more heavy, bulky CRTs to manufacture and transport. It is kind of like if everyone quit buying luxury cars and switched to economy cars, would that mean inflation was less? Of course not. But that's how they figure it with TVs. Things that they can't fudge this way - housing, college tuition, medical costs - show the real inflation rate.