Inflation

Of course Americans can tighten their belts. But unless wages are keeping up, inflation can be a burden, particularly for those who have many mouths to feed, clothe, transport, keep healthy, educate, and house. 

If they are going to charge me more, I wish they would pay me more on my checking account.

Too late for this season, but maybe next year see if they might want to join the school wrestling team. I remember we always had to loose 10-15% of our weight in one month to get into a low a weight class as possible.

Wages are exceptionally high as most employees are getting the wage they demand. As an example, my son cannot find help in the back offices of his medical practice and was forced to "farm" out his clerical stuff to the Philippines who charge $9.00 per hour.

Gabe

Headline today: the average new car now costs $47,000. Even used cars average $27,000 now.

Probably the average truck. Dealers should include escalators to climb the bed of those things.

A friend of my ex recently bought a new Rav4. She had to wait awhile for it and had to pay $4K over MSRP. She shopped several dealers and non of them would even consider bargaining. The dealers have no need to with the current supply/demand. A couple years ago when it came to price all you had to do was hesitate and the price would come down. THEN you could start serious negotiation and get another thousand or more off. There is a Honda dealer near me that used to always keep several hundred cars on their lot. The past year when I drive buy their lot only has about 50-100 cars on it. This must be tough on the dealers because much of their overhead is unchanged. 

It's a rough life if you don't weaken!

Gabe

I've long thought today's cars are needlessly appointed and over-complicated with technology & features I don't want. For my wife's use and for long distance travel I have a late model Acura SUV. But for local trips (or when I'm driving alone) I swear by my 2001 Honda CR-V.... and even that has ridiculous power windows.

When I bought our 2nd home in Florida I bought an Infiniti G37 convertible, but more and more I feel ridiculous driving to Walmart or some flea market in it. It's just the sort of overwrought beast my father would have driven -- except the Infiniti is worse with its preposterous computer screen.

With car prices so high, I may try to sell it and get something simpler if I can find a low mileage older car. I really like the old 1990 vintage Mercedes 190e 2.6 (the 6-cyl baby Benz). None around that I can see. Probably will settle for something Japanese.

FD1000, Thanks for the tip on email negotiations. I'll have to try that next time. The last new car I bought I dragged it out 3 hours until they were about to close and then I told them "Its time for dinner, I'll be back tomorrow". Next day it was another 2 hours to get my price. It was most enjoyable.

Richardsok, I agree with the cars being overly complicated, especially with all the electronics. I had a '73 Karmann Ghia that I restored and upgraded. Nothing could go wrong with it that I couldn't take care of myself, even a blown engine. Probably the simplest car ever made... next to a soap box cars. :-)

The tech in cars is rather cheap these days with the screens merely being an extension of one's smartphone. For instance one does not even need nav, it is already on their phone. The wife's new ride we bought in Feb 2021 in anticipation of the chip shortage. I found a local dealer that was willing to offer near invoice over the phone and I didn't even provide a deposit. They ordered it exactly as I specified, and we did not even meet until the day we picked it up. The upside was that my trade-in had gone way up in price between the time we ordered the new car and it arrived at the dealer. After showing them the online offers that I received that day, we arrived at a very equitable trade-in price. It was 5 years old, but low mileage and I got about 90% of what I paid for it originally. Timing is everything. And like all things, being well-informed is often key. 

The car that I drive myself (a 2010), I bought used in early 2011 for about what a new Camry costs today. Full size, fully loaded and AWD with around 400 HP. It had things that were cutting edge at that time, like adaptive cruise, heated/cooled seats, blind spot monitors, massaging seats (!), auto climate and collision warning/brake assist. Great ride and at 124,000 miles I still enjoy driving it. I still do my own work and it has never been in a shop, since warranty ran out. So, it has been a cost effective vehicle. 

The thing with automotive electronics today is that it only takes a few sensors and a few lines of code to add features that appear gee-whiz. Take anti-lock brakes, add a few sensors and lines of code and you have traction control and stability control. Add a drive-by-wire throttle body and a few more sensors and you have adaptive cruise and automatic braking. Add a few more sensors and a small processor and a few servos and you have auto climate control. It all seems daunting, but the parts are actually quite cheap. And versus purely mechanical solutions, you gain function, lose weight and even simplify. Things like CANBUS allow digital control signals and reduce wiring significantly.  

Most of this stuff actually requires little user input, most is set and forget. Soon it will all be transparent and mostly controlled via voice command. The switches that can be so confusing will be gone and, when required, everything will be done via the touch screen or speech recognition. We are in early stages. Even so, I find the driver assist features quite useful. Our newest vehicle will maintain speed and lane position, and brake if necessary, even if looking down to adjust a function. My wife is no tech geek, but she has figured out how to use most of it. 

Inflation, no emotions, minivans - my head hurts..

As usual, non-informational post.

Market is now pricing in 5 rate hikes. No surprise as far as I'm concerned and expect more based on level of money supply growth. Something could change to bring down inflation (other than Fed actions) I guess, but seems that would be an exception.

Edit - estimates from Siegel to control present rate of money supply growth to be consistent with Fed target inflation is a Fed funds rate of 2%. This is just a projected math equation, so take it as that - an estimate.  If it doesn't happen this year, the concept is inflation will be higher than target - nothing more. If money supply growth decelerates/accelerates more than the equation calls for, outcomes change.