Posted 9/16/2020 20:50 (#8499660) Subject: So when is inflation going to kick in?
Since I'm getting accused of being a perma bear(even though 2019 I was one of the first bulls) I'll share my thoughts on inflation. The bond market has been in a near 40 year bull market(making rates lower). I truly believe we have to be nearing a major bottom and I'll give you an example showing why.
2002 sold a house for 250,000 that same house just sold for 350,000. That value has increased rapidly just over the last few years. So does 350k sound expensive now? If you financed 100% in 2002 your payment would have been roughly 1900/mo. Today you could purchase that same home and finance 100% of it with a monthly payment of
1350/mo. Yes you read those numbers correctly, instead of 8.5% rates can be had in the low 2's.
I can't say if we are talking 2 years or 10 but using the example above this bull market has to be nearing an end and when things start heading the other way I don't see the fed stomping it out too quickly. I'm sure others with more history knowledge than myself could point out when the bear market in bonds began leading to what turned out to be a tremendous time in AG during the 70s.